Joint Committee on Environment and Climate Action díospóireacht -
Wednesday, 22 Feb 2023

Climate Action Plan 2023: Minister for Enterprise, Trade and Employment

Chairman

The purpose of today's meeting is to discuss Climate Action Plan 2023, which was published just before Christmas. I welcome to the committee the Minister for Enterprise, Trade and Employment, Deputy Coveney, and his officials.

As usual, I will read out the note on privilege, which is to remind the witnesses of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity. If a witness's statements are potentially defamatory in relation to an identifiable person or entity, I will direct the witness to discontinue and it is imperative that any such direction is complied with.

Members of the committee are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable. I remind members joining us online that they are only allowed to participate in the meeting if they are physically located in the Leinster House complex. In that regard, I ask that prior to making their contributions they confirm they are indeed on the grounds of Leinster House.

I invite the Minister to make his opening statement.

Minister for Enterprise, Trade and Employment (Deputy Simon Coveney)

I thank the Chair and committee members for inviting me here to speak. With me today are David Hegarty, assistant secretary at my Department, along with Nick Barwise, Stephen Walsh and Alan Dempsey, who are assistant principals in my Department’s climate action team.

The Government is acutely aware of the challenges presented by climate change and the urgent need to decarbonise our economy. I am convinced that tackling climate change will be the defining global challenge of the next decade. This transition to a low carbon economy will require the concerted efforts of Government, businesses and broader society, working together. The link between fossil fuel use and economic progress must be completely broken. It is important to acknowledge that progress is being made on this. For example, a new analysis published by the Central Statistics Office last week shows that greenhouse gas air emissions were 236 g per euro of modified gross national income in 2021, a volume decrease of 31% from 2012. It is clear, however, that a lot more remains to be done to decarbonise our economy.

Sustainability and the decarbonisation of businesses will be a fundamental driver of Ireland’s future competitiveness and the long-term health of the overall economy. The need to decarbonise the economy will change the way we design, produce and consume goods and services. The recently published White Paper on Enterprise 2022-30 aligns enterprise policy with the imperative to decarbonise our economy and society. It recognises the industrial development and export opportunities of offshore wind in particular. I am sure the Chair is following that closely in the context of the potential for the Shannon Estuary region. Securing our offshore wind capacity to meet our Climate Action Plan 2023 targets and the transition of our energy system to renewable energy will be crucial. The exploitation of this opportunity will help to ensure that we remain competitive and provide the security of supply that is necessary to underpin our future economic development. This will support Ireland’s business environment and attractiveness as a place to invest in.

Climate Action Plan 2023, which is the latest iteration of the climate action plan, and its associated actions, once agreed by Cabinet, will be the key driver of decarbonisation across industry and the commercial built environment. My Department has been closely involved in the development of Climate Action Plan 2023, reflecting the Department’s responsibility for sectoral emissions ceilings for industry and commercial built environment emissions, as well as the significant implications for businesses across a wide range of sectoral measures, such as transport and energy. Under the sectoral emissions ceiling for industry, the sector is required to reduce emissions by 35% by 2030. For the non-residential built environment, emissions have to be reduced by 45%. Achieving these targets will require a concerted effort by all businesses in the State.

Focusing on some specifics, the cement sector is responsible for approximately 40% of industrial emissions in Ireland and approximately 5% of total national greenhouse gas emissions. My Department is leading work in respect of the decarbonisation of the cement and construction sectors. Through a working group comprising relevant Departments, agencies and industry representatives, we are finalising terms of reference for a technical consultancy study aimed at developing appropriate public procurement criteria to ensure the reduction of embodied carbon in cement and concrete used by public bodies more generally. As the State is a significant buyer of construction sector output, we want to use procurement as a driver of change in this area.

As mentioned, my Department and I are now also responsible for a sectoral emissions ceiling related to the commercial buildings - non-residential, non-public sector - cohort of built environment emissions. We are working closely with the Department of the Environment, Climate and Communications, DECC, and the Sustainable Energy Authority of Ireland, SEAI, to operationalise this target.

The climate action plan commits my Department and the DECC to jointly develop a roadmap for upgrading our commercial building stock. The roadmap will set out both the grants and financial assistance required through SEAI to allow businesses and landlords make these investments, as well as the regulatory levers that will drive higher standards and ensure compliance in both our new and existing building stock over time.

I reiterate how important I see the decarbonisation agenda to enterprise policy and the work of my Department. I thank the committee again for the opportunity to discuss these issues.

We launched a new enterprise strategy in December. It contains two key transitions: decarbonisation; and digitalisation of our enterprise sector. The two are very much interlinked. In reality, we will have to spend a significant amount of public money and work in partnership with the sector to bring about that transformation between now and 2030 that is necessary to meet those targets, but it is doable. It will involve a lot of change but that can be good for business, good for employment and, most importantly, good for the environment and the emissions challenge that we have to face up to. It will not happen by itself. That is for sure. I have had a number of meetings already today in relation to different sectors focusing on data centres and other economic sectors in terms of how we can partner with them to bring about the necessary changes that are needed to effectively remove, where possible, significant sources of emissions and to move away from bulk fossil-based fuels as a power and a heating source towards electrification that ultimately will be generated through renewable means. That is ultimately where we need to get to. It is an exciting challenge that, I believe, Ireland has a lot of competitive advantages versus other countries in delivering on but, as I say, it will require a change in mindset right across the economy and across society to make it happen. Obviously, Government needs to lead on that but we need to be realistic too. We need to bring people with us because the politics of this is not straightforward. If we simply tell people what to do, we will not bring them on the journey with us. That is the reality. This has to be a combination of grant aid, policy support, taxation measures, and linking efficiency and profitability with sustainability solutions in terms of the change that we need across our enterprise sector.

I look forward to any questions or comments the members might have.

Chairman

I thank the Minister for his statement. First, because I have not seen Deputy Coveney since he took up the new role, I congratulate him on taking on the portfolio in the Department of Enterprise, Trade and Employment. Perhaps it is the most exciting one, from a climate point of view, because of the opportunity there will be for this country in the years and decades ahead as Ireland seeks to become a net energy exporter, certainly, we would hope, beyond 2030. Everything that entails, the supply-chain development, the enterprise, the vast opportunity that is there for Irish people and Irish companies - new companies will be founded on the back of this - is exciting. I wish the Minister well during his tenure in the Department.

I welcome the Minister's comments on offshore renewable wind. It is a subject that the Minister is passionate about and I fully expect that he will bring something fresh to the Department in that regard. I also welcome his comments on the challenge around decarbonisation of cement, which is a huge challenge, and of course the non-public sector commercial buildings as well.

I have a few questions. I will begin with the offshore wind piece and maybe talk about the all-of-government challenge that is there, perhaps more than the specific one with the Department. The Minister will be aware that there are private interests out there - developers - who tell us they are chomping at the bit to get going. I attended a briefing earlier where the Department of the Environment, Climate and Communications officials told us that there will be a package of policy statements delivered by early next year. Some of those will be released this year. Some, such as the hydrogen policy and the inter-connector policy, are imminent. They are very much with that Department but it speaks to the all-of-government piece because the opportunity is so big and there is not one Department that can own it. As a senior member of Government, the Minister will have something to say about that.

Moving away from the offshore wind piece, I want to talk about an area, arguably with the remit of the Department of Housing, Local Government and Heritage, on which the Minister might have something to say. It is the locating of our business parks in this country and how that can impact on emissions, particularly in relation to transport. There is an opportunity as we go forward to locate some of these IDA Ireland and Enterprise Ireland facilities in locations such that people can go to and from them in a low-carbon way. The old thinking, I suppose, would be we would build an industrial estate at the crossroads of the motorway network but now it might make more sense to bring some of those closer to our urban centres so that workers can live in the urban centre and get easily to them by public transport, walking or cycling. That is a big, important piece as we go forward.

I want to mention a significant industry in my constituency that the Minister will be familiar with. Analog Devices is a huge success story for Limerick. The company really got off the fence in the last few weeks and months vis-à-vis a critical infrastructural project in the city, which was a cycle lane connecting the Raheen industrial estate into the city centre. It was refreshing that a large industry recognised the importance of that kind of infrastructure for the work that it does. In an increasingly competitive world, such companies are looking beyond the scope 1 and scope 2 emissions, and the scope 3 as well, and that is where transport to and from their premises comes into play. Anyway, there was a question there about spatial policy within the Department and where we locate these facilities going forward. I have other questions but I might come back in later.

Deputy Simon Coveney

First, can I say a little about offshore wind? Many people, when they hear the debate about offshore wind, see this in the context of a climate change challenge and the need to produce clean energy to reduce emissions. That is only half the story, because we need to do that. However. what many people do not realise is that we are about to see what is effectively an energy revolution in Ireland over the next decade or so take shape. What that opens up in terms of economic development and enterprise is potentially significant in terms of Ireland's position globally as a place for international business location. The Shannon Estuary, for example, has the best grid connection in the country through two 400 kV lines out of Moneypoint. If we can bring 3 GW, 4 GW, 8 GW or 10 GW of power from the Atlantic Ocean into the Shannon Estuary then that location is likely to be a location for a significant cluster of industry that is potentially high-energy usage in terms of manufacturing, whether manufacturing chips or other forms of technology.

It is likely to be a location for high-end data centres that are driven by clean power. The demand for clean and green electricity in the future is going to be a determining factor in where global businesses locate. In truth, the companies themselves, both because of board decisions and demands through regulation, will be requiring high energy use industries to source clean energy in the future. In many ways, the race is on in terms of Ireland being one of the first movers in Europe to actually produce excess energy from clean sources like wind and offshore energy. Today there is about 28 GW worth of offshore fixed and floating projects that are at some stage of planning or proposal. That is about €80 billion in capital investment, just to put a context around this, entirely funded by the private sector. That is thousands of jobs around the Irish coastline, on the north-west coast, the west coast, in the south west, south and south east. Ports like Cork and Foynes and potentially places like Rosslare, Killybegs, Galway and Arklow could be part of servicing and building this offshore infrastructure.

People think of this as a climate change measure. It is that, and that is very important, but what my Department is now thinking about is how we play our part in facilitating that necessary change in how we generate electricity but also the industrial strategy, how we attract investment from abroad and build Irish businesses out of Ireland on the back of abundant amounts of clean power coming onshore. We have to think about how we export the power, whether that is through hydrogen, ammonia or interconnection and how we build industries around that in terms of hydrogen production and so on. Many of these offshore firms will effectively be harvesting hydrogen, using the wind to do that. This is a really exciting space. It is of course about reducing emissions and decarbonising our economy but it is also an economy in itself with regard to growth, expansion and job creation. That will require significant skills, planning, permitting systems, environmental assessment procedures and marine spatial planning.

The management of this from a State perspective is a huge challenge. The State is the only obstacle to the growth of the sector because the private sector is lining up to deliver this. The proof of that is elsewhere. Scotland and Portugal are both well ahead of us with these technologies and opportunities. Ireland needs to catch up and overtake them. I know the Minister for the Environment, Climate and Communications is really focused on delivering this as an energy Minister but I as an enterprise Minister have to back that up and make sure we are working in the same space so we can create momentum for investment and certainty for investors around timelines. We have to do that to ensure we do not lose that opportunity for investment to countries like Portugal, Scotland or, increasingly, France and others in the space.

The Irish economy of 2030 will very much be driven by the success we have in this space with offshore, and to a certain extent onshore, wind and solar but driven in particular by offshore wind. That is why it is important that we get to the 5 GW, or potentially 7 GW including hydrogen, by 2030 and that we ensure fixed and floating is part of those plans so we can release this potential. At the same time, we must ensure there is a regulatory environment and environmental assessment procedure that reassures the public that this is being done properly. We as a State have not developed this industry at the pace over the last ten years that we should have been able to do. We are trying to catch up now and I think we are very lucky to have the Minister, Deputy Ryan, at the helm of that. I and my Department want to work with him to make that potential happen as quickly as we can.

I hear what the Chairman is saying about location and business parks. Analog is an amazing company. I have met with its representatives and had a pretty in-depth discussion. It is a really dynamic company that wants to do a lot more in Ireland and we want to help it do that. What we are seeing outside Limerick is the clustering of big industry, a bit like what we have seen in Cork with the pharmaceutical industry and the tech sector. That is positive because we are creating real counterbalances to Dublin in terms of scale of investment, which is exactly what we need if we are going to fulfil the potential of our national spatial strategy, which is not about continuing a Dublin-dominated economy. It is about spreading that investment and growth, urbanisation and population growth outside of the environs and commuter belt of Dublin.

I take the point about low-carbon travel, public transport networks, rail systems, walking and cycling. A good example of that can be seen in Cork at the moment. Looking at the focus on development in east Cork along the Cork to Midleton and Cork to Cobh train line, that is busier than it has ever been. It is now seen effectively as a sort of Cork version of the DART, although I do not think we should call it the CART. It is busier than it has ever been and we are planning to electrify that line and add a whole series of new stations to turn it into a busy, successful commuter rail system. That can then feed into the kind of vision the Chairman has for low-carbon travel to business parks that employ very large numbers of people. It will not always be possible to do that in certain parts of the country that also need the benefit of business parks but where we can, we should be trying to encourage a link to public transport, in particular rail, and cycling and walking. We are seeing some good examples of that at the moment.

Chairman

I thank the Minister for his answers. I call Deputy Cronin, who is joining us from her office.

Deputy Réada Cronin

I also congratulate the Minister on his new Department. It is a huge Department and a very important one. I also thank him for his presentation. I too am convinced that tackling climate change is going to be the global challenge of this decade. Just transition and human rights have to be a huge part of that, in Ireland and across the globe. The Minister also said how important he sees the decarbonisation agenda as being to enterprise policy and the work of his Department. The climate Bill matters in the context of Bills across all the different Departments. That is why we are having all the Departments come before us. It also matters across the EU with regard to the member states and the EU's own legislative response to climate change.

I have a very specific question for the Minister. There is a major piece of legislation that sits within his Department that could make a huge difference in this area. That is in the area of business and human rights, which my comrade, an Teachta Louise O'Reilly, has raised with the Department in the past year or so. As the Minister will know, the corporate sustainability directive is being debated in the European Parliament at the moment. This directive can transform the global picture for our carbon emissions, biodiversity, human rights and, indeed, environmental defenders by cleaning up the global supply chains. The idea is that the EU should take the lead on this globally. The EU came from the Council of Europe, which was a human rights group. That has to be at the core of this.

The Minister will probably know that the European People's Party, EPP, of which his party is a part, has largely voted to water down this legislation. Will the Minister use his Department and his ministry to make sure that Ireland leads on this law within the EU? Far from watering down the legislation, Ireland should be strengthening it particularly in regard to its climate targets. Many businesses that I have spoken to across north Kildare are anxious to do this. They are taking corporate accountability on emissions quite seriously. Does the Minister have anything to say on this? Oxfam and the Irish Coalition for Business and Human Rights, which I have been dealing with, will also be interested in his response.

Deputy Simon Coveney

I hear the Deputy in terms of the just transition and human rights as part of the climate challenge we face. We are trying to focus on the just transition. She has seen us trying to do that in the context of peat in the midlands. We have put a just transition fund in place to make sure we can invest in and support communities that are impacted by the changes brought about by no longer using peat as a source of power generation. That has a huge impact on communities across the midlands and the Government has a responsibility to respond to that, support communities and put alternative employment opportunities in place.

If we are talking about human rights, let us talk about the human rights of the next generation. If we do not respond to the climate challenge and we will leave behind the loss of wildlife, species and echo systems, as well as much more intensive and extreme weather events. They are also human rights linked to the challenges we face from a climate perspective. There are parts of the world that are already facing these challenges head on. A just transition is really important for today's society, which has to bring about a change in how we live our lives, how we use and generate energy, how we reduce emissions and how we protect biodiversity, in addition to all the things we are trying to respond to and cope with at the moment. The alternative to us not doing that is pretty shocking in terms of what this generation of decision makers will leave behind. There could be a dramatic biodiversity loss, an undermining of our soils and, effectively, generational theft. That is what the absence of policies that take the climate challenge seriously actually means.

I understand the point the Deputy is making and it is a fair point. There are some sectors of the economy and, therefore, some people in society who are more vulnerable than others to the change we have to bring about. We have to be careful we address that and regularly address it in the Dáil and Seanad.

I was in Paris speaking at a OECD conference on business and human rights last week. I shared a session on responsible digitalisation in the context of business and human rights. We are part of the discussion on the EU directive on corporate sustainability reporting directive. We are broadly in favour of that directive, but we need to be cognisant of the administrative burdens we put upon small businesses, in particular. We must make sure that what we are proposing is actually implementable, otherwise we will end up with an enforcement headache.

We are supportive of this directive. Our Department leads on it from an Irish perspective and we are actively involved in this discussion. We would like to see it finalised and come about, but we also must ensure that what we are asking of businesses is implementable on the ground. One can sometimes design directives for the big multinationals that have a HR team and an accounting team, which can put plans in place for reporting systems that we are asking of them. It is very different when we are talking about smaller businesses. We are taking this seriously. We want to see it conclude successfully, but we must also ensure that the administrative burden we are asking of businesses is reasonable.

Deputy Réada Cronin

I would like to stress to the Minister that small businesses cannot do any more than small to medium damage, but what about these large corporations? Climate justice and the just transition has to be central to this. I would like if EPP party members would strengthen this. We are a very small country but, as part of the EU, we can make a bigger impact. I would like to see Ireland taking a stronger position on this. I would appreciate if the Minister could bring that message to MEPs. What happens affects Ireland but it also has a global effect. We are in the middle of an emigration crisis. We have to think big-picture stuff when we are looking at this climate Act. I will leave it at that.

Chairman

The Minister may respond if he wishes.

Deputy Simon Coveney

I hear what the Deputy is saying on that. I do not subscribe to the view that every large multinational is a negative influence in this space. Some of them are the most progressive companies on the planet in regard to climate transition. I understand what the Deputy is saying in making sure there is a benchmark with which everybody has to comply, from standards of reporting and transparency to sourcing and energy use and carbon footprint. I hear what the Deputy is saying on that.

Chairman

We are here to discuss the climate action plan, although I know Deputy Cronin is passionate about the broader picture. To be fair to the Minister, we will keep the topic of the debate to the climate action plan as best we can.

Deputy Alan Farrell

I thank the Minister for attending and for his opening remarks. I apologise for being a little late as I was chairing the Dáil, but I did read the Minister's submission in advance. One of the biggest drivers of conversation in the committee over the past year has probably been offshore energy. Committee members had the benefit of travelling to Scotland where the vast majority of us saw the wind farm there. I did not, even thought I was there, but I am told it was lovely. I want to touch on that in the context of the work the Department is doing to identify issues in areas of industrial policy or even in identifying skill sets in which the Department would have a role in trying to support the sector. I refer to the identification of the deficiencies within the Irish market in supplying the offshore wind sector, insofar as identifying routes and vehicles and the sort of deliveries that we would expect to try to support this sector. What work has the Department done on that? I have three other questions, but I will pivot to the Minister.

Chairman

The Deputy can go back and forth.

Deputy Simon Coveney

I know the Deputy is interested in this issues, as are other committee members. We sit on the offshore wind development task force. What happens on that task force is that different Departments are asked to take forward different work streams. Our Department is responsible for supply chain issues and for coming back and inputting into the task force reports in relation to that.

I think we need to do more than that and we are discussing how to do that within my Department. For me, there is a need and a justification for my Department to put in place a new industrial strategy around the potential of offshore wind and what that means in terms of knock-on consequences for the economy.

Deputy Alan Farrell

The Minister knows as well as I do that we are in a global race to acquire not just the skill-set and expertise to deliver on our climate action targets well beyond 2030 but to secure the raw materials necessary to deliver same. For instance, the Minister will be aware that on the island of Ireland, there is only one port capable at the moment of supporting offshore wind development and that is Belfast. I fully understand, having worked on these issues for the past couple of years, that the Department of the Environment, Climate and Communications plays the primary role but there are other Departments. Is there a roadmap? Should you, as Minister for Enterprise, Trade and Employment assume or take on the role of sketching out what needs to be done by this State to facilitate this sector and then allow various Departments to play their part?

Deputy Simon Coveney

To be fair, the task force is trying to do that and all of the key Departments are involved. Obviously that is the Department of Housing, Local Government and Heritage, which has responsibility for housing and planning, the Department of the Environment, Climate and Communications, which has responsibility for climate and energy, my Department and other Departments in terms of funding and so on.

I hope that we will see in the next couple of months a report by the Shannon Estuary task force, for example. The task force is not only dealing with offshore wind but I suspect that offshore wind will dominate much of its report. That is probably going to involve spending close to half a billion euro of capital investment in Shannon Foynes Port. The task force will look at the potential for wet storage in the estuary, which has depth and space, as well as the capacity to assemble turbines in the existing port facilities. It is hard for people to envisage how big turbines are unless they have seen them. Likewise, there is ambition in Cork to do something similar.

Deputy Alan Farrell

Yes.

Deputy Simon Coveney

These is probably not as much space in Cork but very large cranes has been assembled in Cork docklands in the last number of years, which is not that dissimilar to the scale of some of the things that need to be done with offshore wind. Again, that would involve a huge amount of primary investment to create the platforms in the deepwater ports to do that.

To outline what I think is necessary from an industrial strategy perspective, it is not just what the task force is attempting to do and needs to do, which is to decide who is doing what, what is it going to cost, where is it going to happen and how do we facilitate these huge pieces of infrastructure being assembled in a port facility, and then towed out to a place where they have a licence and a permit to produce energy from wind. This issue is also about giving consideration to how does that reshape the Irish economy, where do we get the skills to facilitate that and what does that mean for our universities, and what does that mean for local authorities in terms of changing their county development plans to create brownfield and greenfield sites that can take advantage of the power that comes onshore from this infrastructure in places like the Shannon Estuary, Cork harbour, Killybegs perhaps, Rosslare, Waterford and Arklow. Other issues include the question of how are we investing in planning for that, whether we are looking at new funding and financing models and whether the State wants to be part of that.

Deputy Alan Farrell

Are there opportunities?

Deputy Simon Coveney

These are broader questions that I think are partly being answered by the task force. Although the primary focus of the task force is to get these projects up and running in terms of actually putting the infrastructure offshore, there are bigger and broader questions in terms of what does the Irish economy look like in 2030 and 2035, and how are we planning for that now on which I think my Department needs to do more.

Deputy Alan Farrell

Is there a mechanism to allow for this task force to report? What is the reporting format of the task force? Is it for consumption by ourselves and the Oireachtas or is it purely something that is being managed at a departmental level or Cabinet level?

Deputy Simon Coveney

My understanding is that there is a task force report due at some stage in the next month but let me check.

Deputy Alan Farrell

Is that something for us?

Deputy Simon Coveney

There will be something next month. The report will then go to Cabinet and I presume that it will be brought by the Minister for the Environment, Climate and Communications, Deputy Eamon Ryan. I hope and expect that the report will create an opportunity for the Dáil and Seanad to debate the issue, at that point. I think that it would be good to have an initial report by the task force as a basis for our discussion in order that we can be as informed as we can be about piecing this puzzle together, because it is not a straightforward thing to do-----

Deputy Alan Farrell

I agree.

Deputy Simon Coveney

-----to facilitate 5 GW or 7 GW of power being produced offshore by 2030. This is enormous infrastructure that we are having to put together.

Deputy Alan Farrell

The Minister mentioned in his opening remarks the decarbonisation of the industrial base in terms of warehousing and their own buildings, and setting out, to my mind, a mechanism for how we would achieve or incentivise that. Also, when you look to retrofitting the residential sector, you look to the SEAI. Obviously the SEAI has a role to play. What departmental work does the Minister envisage being set up in order to facilitate that sort of national approach to the industrial buildings that are located up and down the country in order for them to play their part in this process?

Deputy Simon Coveney

The Deputy has asked a very good question. A lot of this is through SEAI-funded schemes, grants and supports at the moment. Some of it is through Enterprise Ireland working with its client companies, particularly in terms of the high-energy use manufacturing companies with which it works.

Let us consider the SEAI schemes. There is a community energy grant scheme, which is €68 million. There is grant support for cross-sectoral projects, including homes, businesses and non-domestic applicants. Typically, around 60% of funding is for non-domestic. For companies, there is a support scheme for energy audits. The starting point for a company is to get a proper energy audit done-----

Deputy Alan Farrell

Yes.

Deputy Simon Coveney

-----as opposed to making the assumption that energy usage can be solved by erecting a solar panel on a roof. A solar panel may be the solution but not the most efficient spend of money. There is an SME voucher worth €2,000 available to companies to carry out a professional energy audit.

The SEAI has a fund of about three quarters of a million euro for the large industry energy network or LIEN. Under the scheme, the SEAI assists large companies with energy improvements, best practice guidance, sharing among members and ways to manage energy performance.

The SEAI has an excellence in energy efficiency design programme. It is a certified programme for a systematic energy-efficient approach to design construction, and commissioning new investments and upgrades. The funding available is €7.5 million.

There is a support scheme for renewable heat, which is a grant of up to 30% of the potential cost for systems like heat pumps and so on. The funding amounts to just under €4 million.

There is a non-domestic micro-generation scheme and the funding available is more than €2 million. The scheme provides financial assistance to help businesses and other sectors to install solar photovoltaic, PV, panels to generate electricity on site. Grants are available for systems up to a maximum of just under €2,500 for installation.

Deputy Alan Farrell

Has there been much uptake of those schemes? Uptake is a key indicator of whether a plan is successful and enticing for a sector.

Deputy Simon Coveney

I want to give the Deputy a flavour of the schemes available.

Deputy Alan Farrell

I understand.

Deputy Simon Coveney

There are three or four more schemes.

My Department will develop a roadmap with the Department of the Environment, Climate and Communications for the decarbonisation of commercial buildings. We are committed to doing that before the end of the year. We are in the process of working with that Department to do that. The challenge is identifying where to focus our efforts and money because you could spend many billions of euro in this space.

We must ensure that if we are spending public money in this space, we are getting the maximum return we can. I believe the overall green energy fund is €55 million. I think only approximately €5 million has been drawn down so far, but it is early days. These schemes have only been rolled out in the past year or so in some cases. It is-----

Deputy Alan Farrell

I apologise. I am afraid my time is almost out and I want to focus on a final issue that is important to me. It relates to trying to get as much concrete as possible out of the construction sector across the board, as quickly as possible. I understand the Minister's Department has an interdepartmental group that is looking at modern methods of construction. I touched on this previously with the Department of Housing, Local Government and Heritage and I will speak to Coillte about it shortly. It is an area that is a no-brainer. I understand that we are at 45% on the residential side according to the Department. A huge amount of work needs to be done-----

Deputy Simon Coveney

Is that timber-frame?

Deputy Alan Farrell

Yes, it is.

A huge amount of work needs to be done on the regulations and terms and conditions of use of timber-frame technology in Ireland. For instance, we are behind other jurisdictions, as far as I am concerned. I am wondering what that body will do; when we will hear about it in a report to Cabinet or to the Oireachtas; and what steps we expect to take as a result of the changes I envisage will happen in the coming year.

Deputy Simon Coveney

A whole range of things are happening in this space. I was in Trinity College Dublin, TCD, this morning launching a consultation on modern methods of construction. Some 48 people attended from various different elements of the construction sector, from design, to construction, to academia. One of the guest speakers was the advisor to the British Government on modern methods of construction or MMC as it is called. We are seeing a lot of that technology being rolled out in the UK at the moment. The UK has economies of scale that are hard for us to match in off-site construction of houses, building houses in massive warehouses and then craning them on site and bolting them together. However, it is true that we have made quite a lot of progress in the area of the shift to timber frame. Almost half of the houses being built are now some form of timber-frame housing. Does that mean we are as innovative as we should be in the construction sector? It does not. We can get much better at it, which, by the way, we hope will not only reduce the carbon footprint of the buildings, but also allow us to build much faster. Some estimates suggest the cost of building a house can be reduced by between 20% and 40% through innovative new methods of constructions if it is set up correctly and if the economies of scale I mentioned earlier can be achieved.

A new project called ConstructInnovate is being led by the University of Galway and TCD, UCD, UCC and one other university are also contributing to. We are investing in this space but ultimately we need to get the sector to adopt the methods. We were focusing on housing this morning. As the State procures so much concrete from the construction sector for roads, bridges, public sector buildings and so much more besides, we should try to change our procurement strategy to try to move away from concrete where possible and where it makes sense to do so in terms of construction. We should also be encouraging low-carbon concrete where possible. There are different ways to create concrete powder. The carbon content can be reduced by creating it in a way that does not require the same temperatures. I will not go into the technical side as I do not profess to be an expert, but the briefing I have received suggests it is doable. However, it is hugely expensive for the construction sector to switch over to that new method of producing concrete and it will take quite a long time. What we are talking about from a concrete perspective, is a gradual change to reduce carbon intensity in how concrete is produced and using the State's significant procurement to try to ensure we are using other building materials that are less carbon intensive. There are many examples of those, including different types of bricks, timber-frame construction and using other viable alternatives to concrete where possible. All those things are being progressed at the moment.

Deputy Alan Farrell

When does the Minister expect a report to come before the committee, the Oireachtas or the Cabinet?

Deputy Simon Coveney

We have to report every year in producing what is effectively a carbon budget to ensure we are meeting the targets we have set for 2023. That will be quite visible and there will be an opportunity for the committee to bring me back to check whether we are meeting the targets we say we are trying to achieve.

Chairman

I thank the Minister and Deputy Farrell. I welcome Deputy O'Sullivan's guest, Max O'Mahony, from Castletownshend in County Cork. There are at least three Corkmen in the room now so the rest of us are outnumbered. Max is very welcome. I thank him for joining us and I hope the session is of interest.

(Interruptions).

Chairman

No, it is not possible for you to ask a question, Max, perhaps you can do so through Deputy O'Sullivan.

Deputy Christopher O'Sullivan

You would have to get elected first.

Deputy Simon Coveney

Perhaps you can win Deputy O'Sullivan's seat

Deputy Christopher O'Sullivan

Fair play Max. Max is a trier. His parents run Mary Ann's Bar and Restaurant in Castletownshend which I am happy to give a plug to. He is a journalism student and is interested in politics so I am delighted that the Chair has given him a shout-out and I am sure he will be as well.

(Interruptions).

Deputy Christopher O'Sullivan

I join in the congratulations to the Minister on his new role. As I know him and have met him at various events around Cork city, metropolitan area and county, I know that his knowledge of businesses from micro-businesses to the larger ones will definitely suit the role. There is a lot of excitement in the Cork area because of that.

I will pick up a point Deputy Farrell touched on. The Minister might have covered it in his answer. I might have missed it. It was the case a few months ago that small businesses had to have expenditure of €10,000 to avail of the small retrofitting energy grant for items such as insulation, windows, heating systems and so on. It may have been amended or changed since. Perhaps the Minister could clarify that. My understanding is that micro-businesses who did not have expenditure of €10,000 could not avail of the grants. The perfect example would be a small craft shop in a small town that might be in an old terraced building with single glazed windows, attic space and so on. Has that requirement been amended or could it be looked at to include smaller businesses that have expenditure of less than €10,000?

Deputy Simon Coveney

I thank the Deputy. I welcome our guest as well. It is good to see you. Your family's restaurant is one of my favourites from childhood and still today.

This is a slightly awkward question for me because the Sustainable Energy Authority of Ireland, SEAI, that effectively manages these grants does not report to my Department. It is linked to another Department but it is a conversation we have had in my Department. Grants are available at the moment for Enterprise Ireland companies, especially manufacturing companies that are typically high-energy users. There are also grants for larger companies through the Large Industry Energy Network, LIEN.

There are smaller grants, but they are predominantly around energy audits. I am not aware of there being grants for the kind of small upgrading work the Deputy is talking about, as there are for residential housing through the SEAI, for example. If you are rolling out insulation in the attic, replacing windows, doing in-wall insulation and so on, that kind of relatively low expenditure has strong grant-aid support. We need to start looking at businesses that are not Enterprise Ireland businesses to assess how we can be financially supportive of those kinds of energy upgrades. I think there are some supports there, but they are limited enough. There are essentially vouchers to do an audit. If you spend over a certain threshold then there is some funding there for you. I hope my officials will correct me if I am wrong but that is my understanding.

We were talking about the work on the road map earlier. We are progressing a road map in this space with the Department of the Environment, Climate and Communications. The work on the road map will include wide consultation with industry and others and will detail the current financial, technical and advisory supports available to assist businesses in decarbonising their buildings through the SEAI, the enterprise development agencies and others and will detail any gaps in support and possible solutions available to assist the commercial building environment. We must get to a point where we meet the target of reducing emissions by 45% in this space by 2030. That is effectively all non-residential buildings in the country aside from public buildings. That requires the kind of upgrade we are expecting in our homes being done in businesses as well. Accordingly, we are putting a road map together. The two Departments are working on it and it will be done before the end of the year. We are going to need to have an answer for the kind of gap the Deputy has outlined.

Deputy Christopher O'Sullivan

As the Minister says to get that 45% it is going to be commutative, so every little will help. I appreciate the commitment and would love it if the matter was looked at.

The Minister mentioned the SEAI grants and renewable and low-emissions heating systems, including wood pellets and so on. They have been quite successful for industry, especially in manufacturing and food production. We are seeing quite a good uptake on those, from what I can gather. That also includes anaerobic digestion in some instances but I again think of the phrase "death by a thousand cuts", which I used last week as well. To achieve the targets we are talking about is going to require even these small wins. There is an opportunity here, especially in hospitality, including hotels, cafés and restaurants like Mary Ann's, where we could look at grant-aiding and supporting the roll-out of small anaerobic digestion units. The Minister is probably familiar with MyGug. It is a Cork-based company that sells dinosaur egg-shaped anaerobic digesters. Any food waste goes into them and they produce enough gas to cook with. It is especially topical at the moment as the Government has had quite a good deal of success with the restructuring of the TBESS, which I hope will be fit for purpose. When it comes to liquefied petroleum gas, LPG, and standard gas, the Minister will be aware that many hotels and businesses in west Cork in particular do not have a mains gas supply. Anaerobic digesters could therefore help in that situation as well. I am asking for a renewable and low-emission heating scheme for hotels, cafés and restaurants that is similar to what we see for industry and would allow such businesses to use their waste food to create their own gas for cooking. It makes sense, fits with the circular economy and it is renewable gas.

Deputy Simon Coveney

There is some support in this space already. There is a support scheme for renewable heat with a grant of up to 30% to support investment in renewable heating systems using heat pumps and an operational support tariff over 15 years for new installations or installations that currently use a fossil fuel heating system and convert to using biomass or an anaerobic digestion heating system.

Deputy Christopher O'Sullivan

That all pertains to heating. What about gas cooking? I admit it is a smaller part of the whole emissions profile.

Deputy Simon Coveney

Heating is a big expense, especially for hotels. There is also a non-domestic microgeneration scheme, which is another €2 million or so under the SEAI. It provides financial assistance to help businesses and other sectors to install solar PV panels to generate electricity onsite. Grants are available for systems up to a maximum of €2,400 for installation of up to 6 kW hours. There is also a non-domestic retrofit grant and putting new supports in place for that is being looked at.

On the TBESS, although we had about €40 million drawn down from the initial scheme and about 40,000 companies applied, we had expected the latter figure to be closer to 200,000. Accordingly, we have changed the qualification criteria quite significantly. Up to now a company only qualified for supports under the scheme if its energy bill increased by 50% or more. Now a company will quality if its energy bill increased by 30% or more, and this will be retrospective back to last September. I met a number of businesses that, because they had fixed-price contracts for a portion of last year, saw increases in their bills of 35% to 45%. They will now qualify and be able to claim retrospectively from last September onwards. We have made other changes. Up to now, the grant received under the TBESS through Revenue was 40% of the increased cost. That will now increase to 50%. That is not retrospective but prospective from 1 March. The reasoning is if it was retrospective, all of the 40,000 would have had to go back and look for a top-up from last September and Revenue saw that as unmanageable.

We have also increased the thresholds. From last September until the end of February no company could claim more than €10,000 per month, or if they had three premises separate to each other that could be €30,000 per month. We are now increasing that maximum by 50% to €15,000 per month and €45,000 per month for three premises combined. Again, that is prospective from 1 March. It is thus substantially more attractive for businesses to apply. We are talking about quite significant sums of money for companies potentially to be able to draw down, if they are hotels and so on.

The really tricky area has been hotels and restaurants that are not on the gas grid and have heating systems running off stored gas or kerosene. They have not been eligible for TBESS supports because it is quite difficult to calculate if you do not have a monthly billing system as you would with Bord Gáis or an electricity provider. We are looking at whether it is possible to provide the equivalent of TBESS for companies that have heating systems driven by stored gas or oil. It is certainly a big issue for places like west Cork and the many other parts of rural Ireland that are not on the gas network.

Deputy Christopher O'Sullivan

I appreciate that.

Deputy Simon Coveney

It is not an easy thing to resolve, by the way, because the billing systems and so on are much less structured and formalised for an oil tank. We are looking to see what is possible there.

Deputy Christopher O'Sullivan

I am conscious of time and would like to get in one more question. I would be grateful if the Minister could look at those mini anaerobic digesters for cooking purposes. It is small use but every little helps, as I said.

My last question is on storage. This is as much a question on reduction of energy demand as one on emissions reduction, the climate action plan etc.

This winter, a lot of heavy energy-use industry was asked to reduce operations significantly during peak hours, between 4 p.m. and 7 p.m., and that clearly worked and had an impact on reducing demand, although it is not sustainable. A big part of the solution, which fits into the electrification of our energy, is that issue of storage. We are again veering into the issue of energy but it all overlaps. A large section of industry will have to rely on storage, and if those heavy energy-use businesses move to battery storage in those peak hours, that will significantly reduce the risk of outages or blackouts in certain areas. Is the Department on top of that? Is there a strategy on it?

Deputy Simon Coveney

The relationship between high energy users and grid managers has worked well. We have not had alerts this winter and we are already planning for next winter by bringing new energy generation capacity onto the grid. I believe that in a few years, this will not be a significant issue because considerably more renewable power will both come onshore and be produced on land through solar and wind, so I expect the demand will be resolved. Nevertheless, there will be a few years when the grid management is tight.

Many of the high energy users have their own backup generators, that is, large diesel generators they do not use or want to use unless they have to, and a conversation needs to be had regarding whether the State could rely on some of that power in an emergency through producing energy that would otherwise have to be taken from the grid. As for whether we are going to ask industry to invest in large-scale battery storage, whatever form of technology is most commercially viable is going to be the one it pursues, whether that is generators or its own turbines. Quite a few of the large pharmaceutical energy users, for example, in Cork Harbour now produce up to 40% of their own power needs by having built their own turbines, which are effectively their own power generation capacity on site. We will probably see more of that. In fact, another large turbine is being planned on one of the new sites.

Battery storage has a role to play, but I do not think it will be the silver bullet. Ultimately, I think we will store power in hydrogen in the not-too-distant future. Many of our wind farms offshore will be hydrogen-farming from the energy they generate, and power can also be stored in ammonia. If we are to be an energy exporter in time, we are not going to be able to export all our excess energy through interconnection. We will be able to export some of it to the UK and France through interconnection, but most of our energy exports will probably be in the form of hydrogen or ammonia, which are energy storage systems that do not rely on carbon-based fuels. That is probably going to be a more efficient way of doing it than having a large battery bank attached to business.

I think the market will decide this through whichever form of technology makes the most sense, but the Deputy is correct in saying we will have to have a method of storing energy for a grid that is reliant on wind to the extent ours is going to be because of wind's intermittency. For me, hydrogen is the most likely way of doing that, but we will have to wait and see.

Deputy Darren O'Rourke

I apologise for missing some of the earlier contributions. There were reports in the Business Post at the end of last year regarding some pilot assessments in the Department. A challenging feature of the Climate Action Plan 2023 concerns individual Departments coming to terms with the climate implications and their responsibilities in that regard, with new models for assessing the climate implications of individual proposals. Specifically in respect of the Minister's Department, it will involve Enterprise Ireland, IDA Ireland, the prospect of supporting individual businesses and the potential environmental or climate impact of their endeavours. Will he update us on that pilot? Will it become ingrained within the activity of those agencies or within the Department? What will be the practical implications of those new models of assessment?

Deputy Simon Coveney

I will give the Deputy the benefit of the note I have on this. My Department is committed, under action 151 of the climate action plan, to take the steps required to incorporate measures of climate-related impacts into capital grant decisions by the enterprise agencies, predominantly the IDA and Enterprise Ireland. The Department has commenced a pilot project to determine how this might be done using the long-established economic appraisal model used by the IDA and Enterprise Ireland as a basis. A steering group was established for the further exploration of the feasibility and challenges of integrating missions into the appraisal process, including representatives of the Department of Public Expenditure, National Development Plan Delivery and Reform, Enterprise Ireland, IDA Ireland and the Economic and Social Research Institute, ESRI. The pilot concluded in September last year.

The Department is considering its results and plans to introduce a revised version of the model for assessing projects for capital grant funding during 2023. During the pilot project, four emissions categories were introduced to the economic appraisal model, namely, energy, travel, resource use and water. These categories relate mostly to scope 1 and scope 2 emissions-related data the Department collected. Some limited data on scope 3 emissions were included, such as those from business travel.

We are committed to introducing a new model of assessment. When the IDA talks to businesses, encourages them to come to Ireland and puts together a support package relating to research and development, R&D, tax credits and other grants within the state aid rules and so on, it tries to focus on the best fit for the economy. We are trying to put a model in place that will factor the climate-related issues regarding sustainability into that model for future appraisals.

Deputy Darren O'Rourke

Is the Minister hopeful that model will be live and in effect this year?

Deputy Simon Coveney

Yes, I am hopeful it will be, and I think it makes sense. We are trying to build a clean, modern economy. In any event, many of the sectors where the IDA has been successful in recent years are in this space, whether that is technology, medical technology or pharmaceuticals. All these sectors are also trying to change their own systems to decarbonise how they manufacture.

Deputy Darren O'Rourke

Has an impact assessment been carried out? Are there concerns within the sector, either here or elsewhere, and has there been feedback on it from the IDA in particular? Have concerns been raised by candidate companies or is it in line with what they are seeing or experiencing elsewhere?

Deputy Simon Coveney

I am not aware of concerns being raised. In fact, the opposite is the case in my experience. I was on the west coast recently and met representatives of 14 tech companies. They were quite positive about what Ireland is trying to do from a climate perspective in terms of offshore renewables and the climate Bill. They want to be placed in countries that are seen as credible and progressive in this space because that is what their boards are demanding.

Deputy Darren O'Rourke

What about planned data centres?

Deputy Simon Coveney

I am glad the Deputy has asked that question. Data centres are, in my view, an essential part of any modern economy. We are a part of the European Union, which is going to build a new digital Single Market for digital services, which is a big part of decarbonisation. If you do not have to move around as much to do business, if you do not have to travel and can build more efficient businesses on the back of digital services and better use of data, it is a good thing. The truth is that data are processed and managed in data centres and if those data are managed in much older systems around the country, it will have a much bigger impact from an emissions perspective.

There is a lot of talk about data centres in Ireland. We have a new policy statement on data centres now. Anybody who thinks we can develop a modern tech-based economy, particularly around digital services and products, without including data centres is not being realistic. The real challenge is how we power those data centres. All of the companies I have spoken to that want to build new data centres in Ireland want them to be powered by renewable power only. That is where we need to go in terms of facilitating that kind of ambition.

Deputy Darren O'Rourke

Will those potential projects be assessed by the new environmental impact standards?

Deputy Simon Coveney

That assessment is in respect of grant aid. Data centres do not get grant aid. It is not relevant. The two issues are separate. We offer grant aid to companies to allow them expand or to come to Ireland in the first place. Last year, we had 240 new IDA projects. Some received grant aid and others did not. We do not offer grant aid to data centres. We can facilitate them but to do so requires grid connection. We now have clarity in terms of policy on data centres. We are one of the few countries in the world that has that clarity. There are six principles that need a response in the context of the development of new data centres. That is the way it should be. Hard questions should be asked.

Deputy Darren O'Rourke

Take, for example, the case of a new social media company that is entering the Irish market. As part of that, a data centre might be provided. I can think of some that are in the Irish market. Can I take it that is not something that would happen ordinarily or would be subject to this assessment?

Deputy Simon Coveney

Other elements of projects can, of course, have support in terms of research and development grants and so on, but a data centre project itself does not get grant aid.

Deputy Darren O'Rourke

I will pick up on a couple of points. This is a fair conversation about data centres. I do not think all data centres are equal. The business models of individual companies are different. Not all of them are working in the space of remote working and cloud technology. It is important to recognise that we have an increasing number of islanded data centres that are seeking connection to our gas grid, which is of concern. Data centres are also being built without a tenant, so to speak, which needs to be considered to ensure they are doing what we want them to do. I make those points.

Deputy Simon Coveney

There is a reason we put in place a clear statement on data centres last year. Concern was raised to which we needed to respond. We now have the principles for sustainable data centre development under six different headings, which are: economic impact; grid capacity and efficiency; renewables additionality; colocation or proximity with future-proof energy supply; decarbonised data centres by design; and SME access and community benefits. We are one of the few countries in the world that has thought out a policy on facilitating data centres because they are essential pieces of infrastructure for any modern economy. It is as simple as that.

Deputy Darren O'Rourke

That is fine. This committee has spent an age engaging with the Commission for Regulation of Utilities, CRU, in respect of the number of data centres that are on the grid, and that are expected to be on the grid, but are not covered by that policy statement. That is significant, even before we consider the policy framework that will impact future connections. It is a challenge for the State to deal with.

Deputy Simon Coveney

I accept that. It is why a constant conversation is taking place between high energy use data centres, the companies that own them and the CRU about how they manage energy and how they can ensure there is demand flexibility when the State needs it.

Deputy Darren O'Rourke

I have a couple of quick follow-up questions in respect of a number of areas of responsibility within the Minister's Department. I have not heard mention of alumina, which is an enormous source of emissions within the industrial and commercial sectors. Is there a plan in the Department for emissions reductions in that respect? Fluorinated gases, F-gases, are also significant in the industrial and commercial sectors, particularly in fire protection. Is there an individual strategy for that area?

Deputy Simon Coveney

What was the second area the Deputy mentioned?

Deputy Darren O'Rourke

It was F-gases.

Deputy Simon Coveney

F-gases are the responsibility of the Environmental Protection Agency, EPA. They are not our responsibility. That is an easy and short answer for the Deputy.

There was, and is, a plan in respect of alumina but it has stalled. This is all about one company, effectively. There are a whole series of other pressures in relation to Aughinish Alumina at the moment, which we are trying to work through. Most people will understand that. If we can get stability and certainty for the future around Aughinish Alumina, we can work with it on a plan over time to try to decarbonise as much as possible the processes it operates. As the Deputy knows, the bauxite refining process is very energy intensive and involves high carbon emissions. We need to work with the company and it is happy to work with us in that regard. There are other issues linked to the war in Ukraine that have stalled progress on that plan to date. That does not mean the plan is not there but other issues need to be addressed before we have the certainty to look at the kinds of investments that are needed to reduce the carbon footprint of Aughinish Alumina.

Deputy Darren O'Rourke

The Minister might look again at the issue of F-gases because while the EPA might be responsible for the accounting, the bodies generating it are industry and, as I understand it, semiconductor manufacturers.

The Minister might revisit this matter.

Deputy Simon Coveney

I am told F-gases are not under the industry or commercial buildings sectoral ceilings. That does not mean they are not an issue. I am just saying I do not have a note on this today, but I can try to get one for the Deputy.

Deputy Darren O'Rourke

That is no problem.

My final question is on advertising standards and the Competition and Consumer Protection Commission, CCPC. My colleague, Senator Boylan, has raised successfully the issue of greenwashing. We must be increasingly aware of this in the time ahead. There have been incidents. Members, particularly Senator Boylan, have raised issues through complaints. The Advertising Standards Authority for Ireland does not have powers of enforcement. The CCPC does but does not use them. Has the Minister's Department been in contact with the CCPC regarding its responsibility to respond to greenwashing and its awareness of its climate responsibility?

Deputy Simon Coveney

I have an answer as to why I cannot really give the Deputy an answer, but if he has cases that he feels need to be raised, he should send them on to me for examination. I am not over the Advertising Standards Authority for Ireland. It is the self-regulatory body for the advertising industry. If there is misleading advertising-----

Deputy Darren O'Rourke

What about the CCPC?

Deputy Simon Coveney

If the Deputy can give me some examples, I can test whether they concern a CCPC issue or one for the Advertising Standards Authority for Ireland. I will happily consider the examples if the Deputy sends them on to me.

Chairman

Deputy O'Rourke has just raised something that the committee has examined in the past few months. We will have another session on it, I believe.

Deputy Simon Coveney

What does it relate to?

Chairman

Greenwashing and advertisers or companies-----

Deputy Simon Coveney

Making claims about doing things that they are not doing.

Chairman

Yes. We had a very good session with representatives of the Advertising Standards Authority for Ireland, and we will have another. Increasingly, we will come back to this because consumers want to make the right choices when purchasing. It is difficult for them to do so when there is a lot of misinformation.

Deputy Simon Coveney

It might be helpful to the committee members to note a directive is currently being worked on by the commission, apparently empowering consumers regarding greenwashing. Our Department and the CCPC are involved in this space. I had not realised that until now. Maybe I can give the committee a note on it when we get a bit more detail from the commission. It is an important area if we are to have a level playing field. If companies are pretending to do things they are not doing and others are investing appropriately to make the changes they need to make, it is important that we provide for fair competition in terms of how products and services are advertised. When we get a note from the commission on this, it might be helpful to send it to the Chair.

Chairman

We would appreciate that. Increasingly, consumers really do want to make the right choices. In an environment where there is a lot of vague or misleading information, that is difficult.

Deputy Ruairí Ó Murchú

I generally ask for leeway because I am not always great at staying within the parameters, but I will make sure I do not actually ask the Minister a question about the Irish protocol at this stage.

The Minister spoke earlier about Sustainable Energy Authority of Ireland schemes and the necessity of energy audits for companies. In making my point, I will give an example that is domestic but that relates to a company. I am referring to Carlinn Hall in Dundalk. It has what you could call a district heating system but I am told the correct term is "communal heating system". Formerly, there was a woodchip system but it was replaced with gas. There are inefficiencies and major issues. Gas was cheap but then it became incredibly dear.

Chairman

I am going to interrupt the Deputy because, to be fair to the Minister, this is very much unrelated.

Deputy Ruairí Ó Murchú

I am going to bring it back very quickly. We are talking about enterprises. If the system were replaced with a woodchip system, a third-party company could be got in that could avail of the support scheme for renewable heat. There are issues in relation to woodchip and planning law. In fairness to the Sustainable Energy Authority of Ireland, it is involved in a feasibility study on geothermal energy. What are the possibilities for a grant scheme or otherwise that would work for a company providing a solution? There will be a need for that because otherwise there will be considerable capital expenditure on the backs of the approximately 200 residents of Carlinn Hall, which would not work. I am not looking for specifics on this but just explaining where my question is coming from. That is why I was requesting leeway.

Deputy Simon Coveney

I am not sure what the question is.

Deputy Ruairí Ó Murchú

Have there been any discussions on geothermal energy and grant schemes? What is the possibility of something that would do the equivalent of what the support scheme for renewable heat would do for a company engaging in capital expenditure and putting in a woodchip boiler and all the rest of it?

Deputy Simon Coveney

I am not aware of a conversation on district heating in my Department. To be fair, it would pertain to the Department of the Environment, Climate and Communications rather than the Department of Enterprise, Trade and Employment. I have certainly heard the Minister for the Environment, Climate and Communications, Deputy Eamon Ryan, talk about the energy efficiency of district heating, if done well, in urban centres. District heating is done well in other parts of Europe.

Deputy Ruairí Ó Murchú

That is using waste energy. We have an anomaly. I am thinking about the means of addressing it.

Deputy Simon Coveney

That is true, but while a significant amount of physical infrastructure required for district heating systems can be installed on day one, it is pretty expensive to retrofit. I am effectively talking off the top of my head on this. The straight answer to the Deputy's question is that we have not had a discussion on the issue. Ultimately, we are working with the Department of the Environment, Climate and Communications on putting a plan in place regarding how we give grant aid and support through agencies and so on to decarbonise our building stock. The process is under way and will be concluded before the end of the year. The Deputy's question would probably be better put to the Sustainable Energy Authority of Ireland.

Deputy Ruairí Ó Murchú

Fair enough.

Deputy Simon Coveney

I am not trying to be evasive.

Deputy Ruairí Ó Murchú

No. My question is probably unfair, like many that I ask. All I am saying is that we will need some sort of grant scheme that will facilitate geothermal energy and that the two Departments must consider it.

Remote working has been spoken about. There has been a huge increase in it across Europe and across international borders. Some tech-sector jobs are advertised as entailing remote working alone, but there is a cross-border issue in that there are straightforward advertisements that state applicants should not apply unless they live here. A job in the South may not be available to someone in the North, or vice versa.

The issue is that if you are remote working for a considerable period, the company would have to put you on a separate payroll system. It would have to operate, say, the northern jurisdiction’s taxation rules and all the rest of it.

I said I would not mention the protocol. Long term, people across Europe and the world are looking at solutions, but it will take a great deal of time. The only solution I can see, unless someone tells me different, is a bilateral deal, probably with the British Government. That may become more possible if we get beyond the hiccup that has been ongoing for some time regarding the protocol. There, I mentioned it.

Deputy Simon Coveney

Remote working is now a major consideration for most companies. I have been speaking to tech companies in the US, and it is a huge part of their business models. A number of companies had a management team for their headquarters in, say, San Francisco, management teams for other parts of the world and a management team for remote working across the US and in other parts of the world. In Ireland, more and more companies are facilitating remote working post Covid. That is because they want the skills they can get. Many people look for a job on the basis of flexible working, partly at home and partly in the office. This is part of the economy in the context of many jobs. It is a good thing for climate and family, as long as we maintain and protect productivity and so on.

Remote working from outside the jurisdiction involves a series of complications. Whether we like it or not, Northern Ireland is a different jurisdiction with a different tax regime and residency rules.

Deputy Ruairí Ó Murchú

If only there was a solution to that.

Deputy Simon Coveney

I thought the Deputy might say that. There are things we do successfully on a cross-Border basis to facilitate an all-island economy, but tax and residency rules around tax are a matter for the Department of Finance and would require both states to agree some form of facilitation. This would not be straightforward because it would be residency outside of the EU, even though technically in the Single Market for goods. We have seen many young people working remotely from Portugal, Spain and parts of the UK. Many businesses are trying to get their heads around what flexibility can be facilitated in that regard and when it becomes an issue in the context of residency rules and taxation. We have to work through these issues, now that remote working is becoming a bigger and bigger issue. It is a huge issue on the mainland EU, where people can simply drive across the border. In Ireland it is in some ways less complicated because of geographic location and the fact we live on an island. It is an issue we will see considerable work on in the years ahead.

Chairman

I will bring it back to the climate piece with respect to remote working and the savings that might be there. I do not see anything in the enterprise, trade and employment section of the climate action plan. It is arguably more for the Department of the Environment, Climate and Communications to figure out the climate benefit of enabling further remote working. It would be interesting to see an analysis that might support further policy measures.

Deputy Simon Coveney

Apparently, we have done a research paper on that issue of environmental benefits of remote working. I might take a look at it first, but we will happily share it with the committee. We passed legislation in this area regarding the obligation on employers to take seriously the request for remote working. It is not passed yet but we are progressing legislation in that area. I am happy to share some of that work with the committee.

Deputy Alan Farrell

I have a related question on the idea of the digital nomad, the person sitting in a pleasant environment in Spain but working in the Irish market. It is fine within the EU in terms of tax treatment and arrangements. However, it becomes a problem outside the jurisdiction. Unfortunately, Northern Ireland is an example. The UK is too. Is there a simplified process to be managed by employers or that the State can offer for the individuals in question? Does that fall to the Department or to somebody else?

Deputy Simon Coveney

I am afraid it is not as easy as that. Even within the EU, you cannot work out of Lisbon without a residency and tax issue after a certain period. That is my understanding.

Deputy Alan Farrell

That is our challenge for the future.

Deputy Simon Coveney

You can travel to any part of the Single Market to work but if you are working as an Irish resident paying Irish taxes but not living in Ireland, there is an issue. It is primarily an issue for the Department of Finance but it is-----

Deputy Ruairí Ó Murchú

And the Department of Social Protection. There are insurance questions and everything else.

Deputy Simon Coveney

Yes, there is a range of issues around working outside of the jurisdiction: workers’ rights issues, workplace relations issues, employment law. It is not as simple as just working out of an apartment in the south of Spain. That can work for short periods but the residency, tax and employment rights implications are not straightforward.

Chairman

Are you saying that the committee cannot decamp to the south of Spain?

Deputy Alan Farrell

I was going to say that exact thing. I am aware of members of parliament from another jurisdiction who participated in parliament from a remote location - outside the jurisdiction, shall we say?

Deputy Ruairí Ó Murchú

I think we are constitutionally restricted from doing that.

Deputy Alan Farrell

Not this jurisdiction, I should point out. It was a different parliament.

Deputy Alan Farrell

On the four-day week, interesting results arose from trials in the UK that took place between June and December 2022. I understand that a similar trial took place here and that the reporting back on it is overwhelmingly positive. The UK trial showed a drop in emissions of 10%, mostly due to employees reducing their weekly commute. A trial in the United States in 2022 resulted in a 27% drop in business emissions. Both studies showed employees engaged in low-carbon activities on their days off, such as, for example, hiking and other hobbies. The UK trial showed a significant drop in emissions relating to data sharing and storage, primarily due to the drop in internal communications. Have we looked at this, specifically relating to the carbon emissions benefit? I am not just talking about remote working; this is four-day week stuff. If we reduce carbon emissions because the individual is not commuting every day, added to the potential for the person not to be working in an office full time, but to be remote as well, and the productivity increases shown by these trials, is it something we need to look at seriously?

Deputy Simon Coveney

We are looking at it. We have not drawn conclusions yet from the process, as far as I know. First of all, many people work a four-day week but they are just not paid for a five-day week.

Deputy Alan Farrell

For full-time employees, the productivity question has been answered, which is remarkable.

Deputy Simon Coveney

I did not mean to give a flippant answer. This is something we are taking seriously, both in terms of remote working and the four-day week.

This will be very difficult for some sectors but it may well be possible for other sectors. I am conscious we have done a lot over recent years to improve working conditions, including employment rights for employees and so on, in respect of a range of things. We also have to make sure we are listening to employers regarding the affordability of some of these measures. We have built an extraordinary economy in Ireland, which is very competitive internationally and continues to attract a lot of investment and growth from abroad, and we need to make sure we do not do anything to undermine that competitiveness. We also have to be open-minded about new ways of working and doing things. That was enforced on us, in some ways, as a result of the Covid pandemic when it comes to remote working, which is now here to stay. The four-day week sounds very attractive but my job and that of my Department is to assess robustly whether it is viable in the context of productivity, competitiveness and a functioning economy. We are trying to work through that at present. There will be a very interesting discussion and debate when that process concludes.

Deputy Ruairí Ó Murchú

That was a very specific response to the question. The Minister spoke about modern technologies in house building. Deputy Farrell spoke about moving away from concrete. Since the Minister has entered this particular discussion space, has there been any major look at 3-D concrete printing, not only from the perspective of using less concrete but the science behind using alternatives forms of concrete that are less harmful from an environmental point of view?

Deputy Simon Coveney

One of the things we are facilitating research on is, effectively, off-site building and assembly of product-----

Deputy Ruairí Ó Murchú

Modular.

Deputy Simon Coveney

-----before it comes onto site. It is modular but it also impacts on how things are designed and the methods with which that is done and the materials used. Ultimately, this is about building more sustainable homes that are much more efficient in terms of energy and heat, and building them faster and at lower cost in a way that perhaps does not need as many people on site as the construction sector struggles to get the labour force it needs to build at the pace we need. There are multiple benefits to this from a sustainability, delivery time, cost and skills point of view. If that involves 3-D printing for elements of it, I am open to that as long as we use materials that make sense from a carbon footprint perspective. I understand there is quite a big difference between low-carbon concrete and the more conventional concrete we are used to, but the processes for making it are also very different. We cannot simply flip a switch and ask the concrete industry to change overnight without tens if not hundreds of millions of euro of investment to do that. That is why we now have four universities looking at the area of more innovative ways of construction that it is hoped will also be much more sustainable.

Chairman

If there are no other questions we will finish. I thank the Minister and his officials for coming in. It was a very interesting discussion. We will have him back next year to go through it all again. The process is that there will be a yearly engagement with the relevant Ministers. The Minister's Department has a very important role to play. I look forward to seeing progress in the months and years ahead.

Deputy Alan Farrell

If there is information, on top of what the Minister has already outlined, that the committee would find relevant and pertinent to its responsibilities, it would be very helpful if he would send that to us. He has already committed to communicating in respect of any matters members have raised, but if anything else arises-----

Deputy Simon Coveney

On that, if the Department agrees to progress a new industrial enterprise strategy around offshore wind, for example, it would be very good to get a written submission from the committee to make sure we are not missing elements. That would be very useful from our perspective. I am sure there is now quite a lot of experience on the committee, given the number of people who have appeared before it on this topic. That is one example of an area where it would be useful to get an input from the committee.

Chairman

That includes the experience we got from the trip to Aberdeen. Deputy Farrell was on that trip but, unfortunately, did not see the wind turbines. That is a story for another day.

Deputy Alan Farrell

No. That is indeed a story for when the microphone is switched off. I was present.

Chairman

I thank the Minister and his officials.

The joint committee adjourned at 7.26 p.m. until 9.30 p.m. on Thursday, 2 March 2023.