knowledge | 26 June 2019 |
“Does the Emperor have any Clothes?”: Ireland’s Climate Action Plan
The Climate Action Plan published on 17 June 2019 has many striking features. The targets for renewable energy and electric vehicles show world-leading ambition. The governance structures are well-designed to ensure transparent and climate-forward thinking: any shortfall in implementation will be clear for all to see. Whether the Plan is a sufficient response to the “climate breakdown” acknowledged in the title of the Plan is the burning question.
What is the Action Plan?
The “Climate Action Plan To Tackle Climate Breakdown” is a statement of Irish government policies relevant to decarbonisation, with 183 specific actions earmarked across “all-of Government”.
It will be updated annually, with progress on the actions reported quarterly. The current Minister for Communications, Climate Action and the Environment has used this action plan model to useful effect before, when he was the Minister responsible for jobs and then education.
The Action Plan will be central to the final National Energy and Climate Plan, which the Government is obliged to deliver to the European Commission by end of 2019. Also, with the first statutory National Mitigation Plan on climate under challenge in Court, the new Action Plan will provide a helpful solution should the Court agree with Friends of the Irish Environment, who brought that pending challenge.
Where can we expect action?
Actions have been earmarked across these sectors: electricity, enterprise, built environment, transport, agriculture (with forestry and land-use), waste (and the circular economy) and the public sector.
The most concrete actions are given for the electricity sector, where there is a commitment to deliver 70% of our electricity from renewable sources by 2030. In order to deliver the necessary 12GW in additional renewable energy projects, both onshore and offshore, the Action Plan commits:
- ESB Networks and EirGrid to deliver connections for renewable energy sources. By end 2019, the necessary proposals for network development will be published. The cost of the necessary investment will be passed through from 2021, as part of the fifth price review in electricity.
- Commission for the Regulation of Utilities (“CRU”) to finalise the second enduring connection policy by mid‑2020, to deliver access to the grid for renewable projects.
- Department of Housing, Planning and Local Government to publish the long awaited update to the Wind Energy Development planning guidelines before end September 2019. After consultation, these will be finalised before end 2019. The Action Plan contemplates more than 8GW of additional onshore wind by 2030.
- Government to facilitate offshore wind development, with a modernised consent framework next year and a ring-fenced Renewable Electricity Support Scheme, (“RESS”) Auction by mid‑2021. There will be a transitional protocol for mature legacy projects, with the CRU to publish a policy decision on offshore grid connection before the end of this year. The objective is to connect at least 3.5GW of offshore wind by 2030.
- Department of Communications, Climate Action and the Environment (“DCCAE”) to redesign the RESS, with volumes and frequencies of auctions increased to deliver the 70% renewable target by 2030. Applications will open before end 2019. There is renewed focus on equitable community benefit and strong citizen participation.
- Sustainable Energy Authority of Ireland to help unlock the potential for Corporate Power Purchase Agreements (“PPA”) to support renewable projects, with a report by end 2019. The objective is to ensure 15% of electricity demand is met by renewable sources underwritten by Corporate PPAs.
- EirGrid and CRU, over the coming three years, to ensure that large demand connections are regionally balanced to minimise grid reinforcements, enabling continued growth in data centre investment.
- DCCAE and CRU, over the coming three years, to unlock the potential for private networks or direct lines, which would allow entrepreneurial renewable developers to meet proximate demand without grid connection and reinforcement.
- DCCAE to deliver regulatory regime for carbon capture and storage, during 2020, provided research on the opportunity in Ireland is positive.
The Action Plan identifies substantial changes in governance that are well-designed to ensure transparent and climate-forward thinking. We will see:
- From 2019, a new Climate Action Delivery Board within the Department of An Taoiseach, to oversee implementation of the Action Plan, and the publication of a progress report every quarter.
- From 2021, multi-annual carbon budgets, with sectoral targets that will be given an annual trajectory target range.
Any shortfall in implementation of the Action Plan will be clear for all to see.
By 2030, we can expect the carbon tax on use of fossil fuels to increase from €20 to €80 per tonne.
Even more interesting is the commitment to reform the Public Spending Code shadow price of carbon, to guide decisions on expenditure. Investment decisions will assume a price of €32 per tonne by 2020, climbing to €100 by 2030 and €256 by 2050. Although not required to use this pricing method, the selection criteria for Project Ireland 2040 projects must now ensure that low carbon designs and investments are prioritised. Where the State spends its money will make a difference: the renewed focus on green procurement is overdue.
We may soon have pension providers disclosing what portion of any fund is made up of fossil fuel assets and a requirement to offer fossil-free funds. The Department of Employment Affairs and Social Protection will report on that prospect by end 2019.
Also, there are commitments to mobilise private sector investment and promote the development of the sustainable finance sector, both areas where Ireland has a strong track record.
What about other sectors?
Enterprise – there is implicit recognition that Project Ireland 2040 will make reductions difficult. The forecast 40% increase in cement production to 2030 casts a long shadow, which fuel switching is unlikely to offset. Much will depend on how the largest energy users respond to public attitudes about climate and decarbonisation.
Built environment – there is real prospect for bundled retrofit projects to deliver meaningful energy efficiency improvements to residential stock in public ownership and other social housing. Happily, this proven Dutch-model would support a just transition.
Transport – much of the attention is focused on the ambitious target to have almost one million electric vehicles on the road by 2030. The breadth of this ambition is best understood by reference to the global count of such cars at around 5 million. The devil is in the detail, where action on the car charging network is to cater for 75,000 of these cars by 2022 and 175,000 by 2025. Of course, the biggest benefits would be delivered by sustainable mobility (Avoid, Shift, Improve), i.e., fewer cars, so the renewed commitment to an improved bus network and service under BusConnects has to be welcomed.
Agriculture – perhaps the loudest criticism of the Action Plan has been reserved for agriculture. The sector represents more than 30% of relevant emissions, but imagination for action appears limited by reform of the Common Agriculture Policy. There is welcome recognition for indigenous biomethane injection, biomass-fueled heating and forest sequestration. The political challenge of balancing Food Harvest 2020 and Food Wise 2025 with a carbon budget remains. The State missed an opportunity to link its vision for the future of agriculture with a meaningful response to the separate and recently acknowledged biodiversity breakdown.
Waste – it will be interesting to see “end of waste” criterion that would dilute regulatory barriers in the bioeconomy. That has been a practical challenge in other sectors, where by-product and end of waste status would unlock circular economy opportunities. The question for the waste sector, where targets are being achieved, is whether the State is prepared to be more ambitious than required by Europe.
Will the State meet its international commitments?
It is encouraging to read about how the Action Plan has been designed for a trajectory to 2030 that would not require purchase of credits or lost revenue. Better still, the prospect that fully three‑quarters of the adjustments can be made without any cost, when measured over the lifetime of the investment.
However, it seems the Government is not confident. Chapter 2 of the Action Plan describes “where we stand” and carefully explains what targets will be missed (all those for 2020) and what targets are not binding (some for 2030). It is perhaps telling that the first action in the plan is to shift our focus to the next horizon (net zero by 2050). Might the Emperor not be fully clothed until 2050?
The Climate Action Plan along with its Annex can be accessed here.
This document has been prepared by McCann FitzGerald LLP for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.