The recent Climate Action and Low Carbon Development (Amendment) Bill 2021 (Climate Bill), newly published carbon budgets and Climate Action Plan 2021 (CAP 21) place Ireland as one of the most ambitious nations in the world on tackling climate change.  Their publication was timely, as the world closely followed events at the COP26 conference in Glasgow in November, climate action is very much at the forefront of every business, city and country, with more and more stringent targets and mechanisms being announced every day in the hope of staying within a 1.5C global warming scenario. Russell Smyth and Shane O'Reilly of our Sustainable Futures team explain.

Worth €125 billion, CAP 21, released in early November, details the measures Ireland needs to implement and action to reach our economy-wide emissions reduction target of 51% by 2030 (compared to 2018 levels) and ensure that we stay within the first two legislated carbon budgets. These carbon budgets essentially put a cap on the total emissions Ireland can emit within a set period - the first two 5-year budgets require an average annual cut in emissions of 4.8% for the first budget (2021-2025) with this increasing to an 8.3% annual cut from 2026 to 2030.

Where will this €125 billion go? This is what’s set out in the CAP 21 – each sector of the economy has a series of mitigation measures or actions to implement within this decade to reach their own reduction targets and wider national targets. There is an acknowledgment that some sectors will need to do more and may be more heavily impacted than others. To ensure a just, fair and equitable transition, a Just Transition Commission is to be set up, as well as a target for additional carbon tax receipts up to 2030 to support social protection measures, retrofitting for social and low-income homes as well as the agriculture sector.

The CAP 21 is clear in its goals – it sets out a total of 475 ambitious actions each sector of the economy needs to adopt to reach our national goals and ensure a climate resilient society and economy. Some of the key themes and highest emitting sectors of the economy and their actions and reduction targets are set out below.

Electricity

Onshore wind has been one of Ireland’s true success stories, and renewable electricity continues to play a starring role in the CAP 21, with electricity being asked to achieve a reduction in emissions of between 62% and 81% by 2030, supported by a large deployment of offshore wind and solar (up to 80% renewable electricity by 2030). The CAP 21 also includes the completion of the phasing out of coal and peat-fired electricity generation as well as an increased emphasis on the use of biomethane and green hydrogen. A drive for renewable electricity is vital to all sectors of Ireland’s economy, particularly heat and transport, which will rely heavily on electrification to reduce their own emissions. Data centres and their huge energy consumption and growing energy demand is highlighted in the CAP 21, stating that a review of strategy and policy will be undertaken to ensure alignment with sectoral renewable energy targets and budgets.

Housing & built environment

A 44-56% reduction in emissions is required of the housing and built environment sector by 2030. The government has already committed to the retrofit of 500,000 homes by 2030 and installation of 680,000 renewable energy heat sources in both new and existing residential buildings, expected to be delivered through new finance and funding schemes. Of note is the introduction of a loan scheme which intends to offer loans at a reduced interest rate to allow for home energy efficiency upgrades at an affordable cost. Clearly, retrofitting is set to be an integral part of achieving the required emissions reductions in this sector. It is critical, therefore, that this is delivered in a just and equitable manner and adequate levels of support is provided to low income households to be able to retrofit their homes, alongside those on higher incomes. If not, low income households could be subject to higher energy costs as part of this transition.

Given the current media scrutiny of the challenges within the housing sector in Ireland and the high number of vacant and derelict buildings here, an emphasis on the re-use of existing buildings would have been welcomed in the CAP 21. Typically, the re-use of an existing building would have a lower carbon footprint than the construction of a new building. The CAP 21 shows progress in committing to delivering whole life carbon assessments of buildings, as well as strengthening the position on inclusion of green procurement criteria in public procurement, but perhaps could have gone further.

Transport

As one of the highest emitting sectors of the economy (approximately 18% of Ireland’s 2020 carbon emissions), the CAP 21 requires the transport sector to decarbonise by between 42% and 50% by 2030. Increased uptake of electric vehicles (EVs) remains a key part of the government’s plan, with a goal of 1 million EVs on the road by 2030. Given the low number of EVs on Irish roads today, combined with current global supply chain challenges and increasing Li-ion battery prices, this target will be particularly challenging to meet by 2030.

A welcome part of the CAP 21 is the emphasis on  shifting away from looking at just technology and fuel switches – a key part of the plan is the promotion of ‘daily sustainable journeys’ through improvements in public transport, including BusConnects, and active travel infrastructure. Also of note is the emphasis around electrification of freight vehicles, as well as the increased uptake of more sustainable fuels and biofuels for Heavy Goods Vehicles where wide-scale electrification of these vehicles is not yet possible.

Agriculture

Often the most controversial sector given its role in the rural economy, as well as its significant contribution to national carbon emissions (approx. 37% in 2020), the agriculture sector is required to decarbonise by between 22% and 30% by 2030. This target can be considered low given its contribution to national emissions as well as in comparison to other high emitting sectors.

The CAP 21 references efficiency measures as the core route to emission reductions, including an increase in organic farming, reduced nitrogen use and chemical fertilizers, which will get us to approximately 18%.  It isn’t clear how the sector will move beyond this 18% reduction to reach the target of between 22% and 30%. A possible bridge for this gap is the introduction of diversification opportunities for farmers, including production of bioenergy crops, planting of trees and installation of renewable energy. A recent KPMG report, commissioned by the Irish Farmers Journal, concluded that going beyond an 18% emissions reduction requires a reduction in herd numbers, based on currently available technologies and efficiency measures in Ireland, resulting in significant implications on rural economies and farmer income and livelihoods. With the Minister for Agriculture, Food and the Marine, Charlie McConalogue TD, recently stating that herd reductions are not on the cards, new agricultural innovations are needed fast.

During COP26, the Global Methane Pledge was adopted by many nations, requiring a 30% methane reduction globally by 2030 compared to 2020 levels. Ireland has signed up to this pledge but will contribute to the global target, rather than adopting it at a national level, which, given the scale of Ireland’s agriculture sector, isn’t surprising. The domestic target is more likely to be in the region of a 10% reduction in methane emissions, as noted in Ireland’s Food Vision 2030 strategy.

Circular Economy

The Circular Economy is a key part of the CAP 21, with an emphasis on a shift away from the traditional linear model of ‘take-make-waste’ to a circular model. This shift will be supported by various strategies, plans and legislation including the Circular Economy Bill 2021. A welcome goal cited in the plan is the halving of food waste by 2030, contributing to a national reduction in methane emissions. In addition, a move away from single-use products, which have seen a surge in use during COVID-19 given the public health and safety concerns, is mentioned. The increased capabilities of recycling plants and circularity of product-based businesses will play an important role in shifting to a circular economy. 

Key takeaways

Recently released data highlights the huge challenges that lie ahead – the Environmental Protection Agency (EPA) reported a decrease in Ireland’s 2020 carbon emissions of only 3.6% since 2019. This decrease reflects the impacts of COVID-19 which meant a lockdown of society, with unprecedented impacts on the economy, resulted in less of an emissions reduction than the average annual reduction required in the first carbon budget (approximately 4.8% reduction per annum).

Over the next few weeks and months, the exact emissions reduction targets will be clarified, alongside a plan to implement and achieve the identified actions to meet these reduction targets. Huge drive and ambition as well as societal change is undoubtedly required to achieve these targets. Each sector will encounter different challenges and opportunities in implementing the required actions to deliver on Ireland’s commitments. It is imperative that the plans and pathways set for each sector are robust and tangible with clearly set out resources, responsibilities, metrics for measuring progress as well as the required financial support and incentivisation to deliver the action required. It is vital that these plans involve and mobilise all sections of society, including public bodies, private sector businesses and communities as key players in the decarbonisation of Ireland’s economy. Take the agriculture sector - we have seen that going beyond 18% emissions reductions requires new efficiency and innovation measures in place to achieve increased savings. A realistic pathway of actions to support farmers to adapt to climate considerations, backed by the required fiscal incentives, is vital to achieve the chosen reduction target.

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