I thank the Chairman and the members for their invitation to address the committee this afternoon. I welcome this chance to give an update on climate change issues that relate to Ireland's agricultural sector. In making this presentation, and to help address any queries the committee may have, I am joined by officials from my Department.
From the outset, Ireland has fully supported the strong leadership shown by the European Union in terms of policies and actions to mitigate and adapt to the impacts of climate change. Under the Kyoto Protocol, Ireland agreed to limit greenhouse gas emissions at a level 13% above 1990 levels. Under the EU climate change and energy package, Ireland has the highest level of target set under the EU burden sharing arrangements, to reduce by 2020 our national emissions by 20% compared with 2005 levels. Ireland has also agreed that by 2020, 16% of our overall energy consumption will come from renewable sources and 10% of transport fuels from bio-fuels.
In the event of an international agreement where other developed countries commit themselves to comparable emissions reductions and developing countries commit to contributing adequately according to their responsibilities and respective capabilities, the EU has committed to reduce the Union's collective emissions further by up to 30% compared with 1990 levels. Although the Copenhagen accord does not constitute such an international agreement, it does recognise the need to limit global temperature increases to no more than 2° centigrade above pre-industrial levels. Scientists tell us that to keep increases below this threshold will require developed countries, including Ireland, to set themselves on a glide path to reducing greenhouse gas emissions by 80% to 95% by 2050. As we proceed to determine how Ireland should meet its 2020 targets, a cautious and pragmatic approach is needed that fully recognises the need to achieve the reductions in a cost-effective manner.
To date, Ireland's agriculture sector has played a very significant role in reducing national emissions. In the Kyoto commitment period, from 2008 to 2012, emissions from the sector are projected to be 8.5% — 1.7 million tonnes of CO2 equivalent — less per annum compared with 1990 levels. The sector will continue to play its part in managing the response to climate change and, where possible, the sector will continue to contribute to emissions reductions through improvements in production efficiency.
I assure the committee that Ireland's agriculture sector will continue to contribute its fair share to the national response but, as members will be aware, compared with other sectors, there are very few cost-effective emissions reductions options available to us. With current technologies, future emissions reductions are not expected be as great as in the past. In its recent report projecting emissions from 2010 to 2020, the Environmental Protection Agency, EPA, forecast that emissions from the sector will have fallen by 2.5 million tonnes of CO2 equivalent, or 12.5%, by 2020 compared with 1990 levels.
An in-depth analysis of the cost-effective emissions reductions options available to the sector was conducted by my Department in association with Teagasc. It concluded that, with the current product mix, current technologies could deliver a reduction of no more than 4% in emissions. This conclusion is borne out, more or less, by separate and independent analyses conducted by McKinsey consultants and by the Institute of International and European Affairs. It is also broadly in line with the latest projections from the EPA.
I stress to the committee that, to date, Irish farmers have clearly demonstrated their willingness to embrace new farming methods that are friendly to our environment. Farmers will continue to adapt further as new cost-effective methods to reduce emissions come on stream. It is worth remembering that the mitigation measures that can be introduced at farm level are also the measures that will help improve profitability for farmers, for example, better recycling of the nutrients contained in slurry and better grassland management. This is a win-win situation for Irish farmers. Not alone will it benefit the environment and contribute to addressing climate change, it will also reduce costs and improve efficiency at farm level.
I remain hopeful that concentrated research at national level and collaborative research at international level, including research into increasing the carbon sink potential of the sector, especially of soils, will yield dividends and deliver effective mechanisms to offset our greenhouse gas emissions. On the subject of research and collaboration, Ireland is a founder member of the Global Research Alliance into the mitigation of greenhouse gases in the agriculture sector. This alliance will help us gain access to the best worldwide technologies in the area of reducing the carbon emissions in agriculture, and it is an alliance in which we play a leading role.
Farmers and the food industry fully acknowledge that they have extensive environmental responsibilities that include climate related obligations. However, their contribution extends far beyond those limits. The supply of quality, sustainably produced wholesome food and feed to meet the ever-increasing demand remains our core function. Reducing livestock numbers as a solution to achieving emission reductions makes neither economic sense nor environmental sense in global terms because any shortfall on European or world markets brought about by a reduction in Irish output will be filled by produce from far less sustainable farming systems and with a far greater carbon footprint than the Irish produce it displaces. It would also have damaging knock-on effects for rural communities.
Global demand for food will increase by 70% over the next 40 years to meet the demands of a world population that is projected to increase by 2.3 billion to more than 9 billion in the same period. This increase in population is equal to the entire global population in 1950. Those statistics demonstrate clearly the challenges for the global community. Against that backdrop, world hunger has reached staggering proportions, with more than 1 billion people, or one person in six, going hungry every day. Ireland is ideally placed to contribute towards meeting this ever-increasing demand and its pasture-based farming system is better suited than many others to doing so in a sustainable way. The milk quota system will be abolished by 2015 and Ireland's dairy industry is well placed to prosper, even though it will have to compete in competitive international markets. All indicators are also pointing to increased demand for beef.
There are many positive actions we can take to make some cuts in emissions from the sector and the Department is committed to exploring and promoting the uptake of these activities. For example, reduced emissions per unit of production has followed improvements in efficiencies in animal breeding, and in recent years fertiliser has been used more efficiently on Irish farms and less is being applied. This has helped to reduce nitrous oxide emissions. The agriculture sector is making its contribution to the smart economy by way of the significant advances that we are now witnessing in the areas of animal genetics and genomics. The work being done by the Irish Cattle Breeding Federation in this area will make a significant contribution to the reduction of the carbon intensity of the dairy and beef sectors, and, similarly, the suckler cow welfare scheme will make a significant contribution.
Ireland's food processing sector uses significant supplies of energy and I am conscious of the need to ensure that energy is available to this industry at internationally competitive prices. To do this, we must help industry to explore the options to benefit fully from a wide range of alternatives, including the possibilities surrounding anaerobic digestion and energy sources such as combined heat and power units and energy generated partly or exclusively from renewable sources originating where possible in Ireland's agriculture sector, such as biomass, organic waste or agricultural by-products such as tallow and meat and bonemeal.
Under the various schemes operated by my Department we promote afforestation, hedgerow and tree planting, the introduction of clover swards, the adoption of minimum tillage and the planting of energy crops. We provide support for organic farming. The programme for Government includes a target of 5% of land area for organic cultivation by 2012. All these measures contribute to addressing climate change. Emission reduction activities, such as minimum tillage and low emissions slurry application technologies, will continue to be supported under the new agri-environment options scheme.
The development of the bioenergy industry depends on a number of factors, including evolving bioenergy policies and supports and continued investment in research, development and innovation. To address these and other issues, the Department is working closely with the Department of Communications, Energy and Natural Resources. The Department has been providing support to farmers through a bioenergy scheme since 2007. A pilot bioenergy scheme was launched in 2007 to support the planting of miscanthus and willow by giving farmers a grant up to a maximum of €1,450 per hectare to cover 50% of establishment costs. Grants were paid in two instalments: 75% following establishment of the crop and 25% in the year after establishment. The pilot scheme supported 364 farmers in the planting of 2,500 hectares, broken down into 2,100 hectares of miscanthus and 360 hectares of willow, to the end of 2009 at a cost of almost €3 million.
A new bioenergy scheme, co-funded by the EU under the rural development programme, was launched in February of this year to build on the progress made during the pilot phase. Under this scheme, farmers receive a grant up to a maximum of €1,300 per hectare to cover 50% of establishment costs. It is expected that in the region of a further 850 hectares will be planted in 2010 under the scheme.
The bioenergy market is an important segment of the renewable energy sector. Important and challenging EU and national targets now exist to develop renewable energy in response to concerns about climate change and energy security. Two key policy documents have been published in Ireland to increase renewable energy output. The White Paper on energy, Delivering a Sustainable Energy Future for Ireland, sets out the framework for energy policy to 2020 to ensure security of supply, environmental sustainability and economic competitiveness in the energy sector. A national bioenergy action plan is also in place to increase deployment of Ireland's bioenergy resources in the transport, heat and electricity markets.
Non-food crops can make a contribution to emissions reductions in the agriculture sector through the provision of low or carbon neutral indigenous fuels. Both willow and miscanthus are carbon neutral fuels as the CO2 released on combustion is equal to that taken from the atmosphere during photosynthesis. Forestry has a key role to play in the bioenergy area, particularly as a source of biomass for heat and energy generation. There has been significant expansion in the use of wood biomass in recent years. In 2008, for example, the use of wood chip for heating grew by almost 40%. I will elaborate on this matter when I come to deal with forestry.
A number of support mechanisms are currently in place to develop a market for solid bio-fuels. The ReHeat and greener homes schemes have generated interest in the use of biomass heating fuels. New opportunities and market outlets are emerging for miscanthus and willow crops as more businesses and households switch to biomass boilers to displace the use of high-cost fossil fuels. The potential end-use markets for bioenergy crops that are grant-aided by my Department under the bioenergy scheme include those relating to pellets, chip, briquettes, whole-bale boilers and, in the case of miscanthus, power stations. As regards willow, potential end-use markets include power stations, commercial heating projects and district heating projects. Interest is also beginning to emerge in respect of using miscanthus and willow crops in larger biomass boilers. The initial target market in this regard would be buildings, such as hotels, swimming pools and hospitals, with a large and continuous heat demand.
Ireland's climatic and soil conditions are very suitable for willow and miscanthus production and offer a new rural economic activity and entry for agriculture to a large, expanding energy market. These crops can deliver positive outcomes in terms of reduced CO2 emissions and could potentially deliver additional sources of income for rural communities. A vibrant non-food crop industry would certainly provide farmers with added income streams. Given a favourable environment for development, Irish farmers can make a substantial contribution towards meeting Government targets and policies in the bioenergy and non-food crop sector.
While the forestry sector has a key role to play in Ireland's response to the challenge of climate change mitigation, it also has an important role to play in the country's economic future. Over 16,000 people are employed in the forestry and wood product sectors. In 2008, Irish sawmills and panel board manufacturers utilised 2.27 million cu. m of timber, mostly sourced from Irish forests, and exported goods to the value of €250 million. It is important, therefore, that we protect and manage this important natural resource.
Greenhouse gas emissions from deforestation and forest degradation in developing countries account for 15% to 20% of global emissions. Finding a way to reduce such emissions is a key component of the international negotiations being held under the UN Framework Convention on Climate Change. The main benefits of forestry to climate change mitigation are that afforestation converts agricultural land from being a net emitter of CO2 to a net sequester and store of CO2 for as long as forest cover and productivity are maintained; Ireland’s forests have the potential to sequester a total additional 110 million tonnes of CO2 by 2035; continued afforestation will provide the potential to supply 2 million tonnes of wood biomass annually for renewable energy by 2020; and there is significant potential for product substitution by utilising wood to replace more energy intensive products such as steel and plastics.
In 2008, the net contribution of Ireland's Kyoto eligible forests — that is, new forests planted from 1990 onwards — amounted to 2.75 million tonnes CO2. Assuming that carbon cost €17 per tonne, this represents a potential saving in the region of €46 million to the Exchequer. Sustaining the climate change mitigation benefit from afforestation and the goods and services that flow from forests will require, as with wood energy production, a sustained afforestation programme over the next 20 years. It should be noted, however, that forestry credits are not currently allowed under the EU ETS and there is no provision for them to be used in the latter post-2012. The discussions and consultations being undertaken by the EU Commission in respect of a proposed increase from 20% to 30% may lead to such a proposal being brought forward. It is likely, however, that such a move would require the agreement of the Environment Council and European Parliament.
I am fully aware of the key role that the agriculture and forestry sectors have to play in the complex interlinkage between climate change, energy and food security. I am keen to stress that the farming and food industry sectors will not be found wanting when called upon to deliver in each of these areas. However, there is no room for error. The stakes could not be higher. I am sure everyone agrees that the consequences of failing to deliver an adequate response that will protect our climate and provide sufficient food for the world's population cannot be contemplated.
