Dáil Éireann debate -
Tuesday, 15 Oct 2024

This question relates to climate finance. COP29 is being termed in some quarters as the finance COP. We have big work to do in terms of setting the new collective quantified goal. I ask for a sense of the direction our climate finance will be taking domestically and how we propose to direct it to communities most in need as well as how we propose to influence the direction travel of climate finance not just here in Ireland but at COP.

Ireland’s all-of-government international climate finance roadmap, published in July 2022, sets out the strategy for achieving our international climate finance targets, which involve more than doubling our funding for developing countries to €225 million annually by 2025. This commitment was made in 2021 by my colleague the Tánaiste at COP26 in Glasgow. Since 2020, we have more than doubled our climate finance. Ireland’s 2023 climate finance expenditure is expected to be confirmed as totalling more than €156 million, in 2024 will likely exceed €181 million and next year we will meet the target of €225 million on schedule.

We recognises that vulnerable countries which have contributed least to the climate crisis are suffering the most from its impacts. The geographic focus of our funding is on less developed countries and small island states in particular. The thematic priorities of the roadmap centre on strengthening climate resilience and adaptation. About 80% of our climate finance goes to adaptation, which is what the developing countries want. It is 100% grant funded and is not tied, not commercial and not based on loans; it is real support. The principles outlined in the roadmap include a focus on leaving no one behind and on gender-sensitive and locally led climate action.

Our climate finance contributes to the meeting of the current $100 billion goal. The forthcoming COP29 in Baku, Azerbaijan, is expected to deliver an agreement on a new collective quantified goal to replace the previous goal. The negotiations are going to be difficult, and it is far from certain that we will get agreement. Any agreement must involve agreement on how we advance climate adaptation, how we get Article 6 provisions in place so that we can get funding for nature, as well as how we get transparency in accounting and reporting systems in the international energy and minerals system in order that we avoid a trade war on climate and, more important than anything else, how we bring climate and development together for climate justice, which is at the centre of the Government's approach and position.

I congratulate the Minister on his appointment to a very key role at COP29, namely a senior COP presidency role co-leading negotiations on climate adaptation. While that is somewhat tangential to what we are discussing here, it is also very closely related. One of my key concerns relates to how we treat climate finance, the €225 million that we are making available and the need to keep that separate from our overseas development aid. We should make it supplemental to overseas development aid and not be counting both things twice and together, because we do great work with that. The other issue is about direction. Ireland is very good in terms of focusing it climate finance on the principles of locally led adaptation. We can unlock all sorts of co-benefits by investing directly in communities and building capacity within communities. I would like to see that teased out more. I would also like to see us having an influence on the direction of travel of other countries in the context of how they direct their climate finance flows.

This is very rare, but I disagree with the Deputy. Climate finance is overseas development aid. It fits absolutely within international definitions as well as the rules and spirit of what overseas development aid is about. It is about protecting the most vulnerable. It is, as the Deputy said, bottom up. It is about building resilience. We are good at it in this country because we have a culture and tradition going right back to our missionaries in Africa and elsewhere. We have learned over decades how to actually work with, listen to, inspire and be inspired by local leadership. I appreciate the Deputy's kind words regarding my role in Baku as a ministerial pair. Just to explain, I will not be working for the EU in that context but for the UN process. I will be working with Costa Rica, which is a developing country. The job is to try to get agreement and understanding. The area we are working on is that of adaptation, which, for the developing poorest countries, is the most important aspect. Included in that is getting finance for adaptation and getting the characteristics that I just described stitched into the international agreement. That is what we will look to do, to improve on the lessons that we have learned as a country that is good on climate adaptation finance, and to spread the word.

I am sure we can amiably agree to disagree on this point. I want to chase that 0.7% goal that we have set out. I know we are chasing a moving target in that our GDP is increasing and we have substantially, in real numbers, very much increased the type of funding we are making available through overseas development aid and climate finance. That said, I would like to keep the accounting separate, even if they add up to reach somewhere close to that 0.7% target, which is the North star that we need to be heading towards.

The other issue we need to consider in this space is the mosaic of funding that is often spoken about. Public money needs to be used to lead and to do the heavy lifting to de-risk private and philanthropic sources that will hopefully come in later. The quantum of funding that is required to meaningfully engage in climate finance is beyond the reach of public money, even with those very ambitious goals and that new collective quantified goal that we are hoping to see increased ambition on. I would reiterate that the local focus that the Government is pursuing in conjunction with the US is well worth developing. We know the co-benefits that go along with it.

I agree with the Deputy's latter point. Public finance will be important, but it is going to be challenging because we in the developed world have to extend more and there should also be a broadening of contributors to that. We should be very careful here. Last Friday, I spoke to one of the leaders of one of the African states who is a real expert and a brilliant leader in the area. He said that he wants private finance. He said that private finance is key but that Africa cannot get private finance. I will give an example. Last Friday, the International Renewable Energy Agency published data on the new renewables revolution that is taking place, showing that 473 GW of new renewable power was built last year but only 2.7 GW of that went to Africa. I agree that we need public finance but we absolutely need private finance too for a whole variety of different issues. That mosaic or layering of finance does not absolve developed countries of the obligation to help in public ways but we actually need to focus on getting private finance too. If we do not get that, we will not get the $1.5 trillion per year that we need to spend in developing countries, other than China. Private finance is also key here.

The community energy grant scheme is part of the Government's national retrofit programme. It aims to upgrade groups of buildings to high energy efficiency and renewable energy standards across communities in an efficient and cost-effective way. Capital funding of €45 million is provided for the scheme this year. The primary objective of the scheme is to support and maximise the number of home energy upgrades delivered. This includes upgrades to energy-poor, private, rental and approved housing body homes. Last year, 601 home energy upgrades were supported under the scheme, including 44 energy-poor homes and 68 approved housing body homes.

Non-domestic projects are also supported to encourage broader community engagement and mobilisation, and 290 non-residential projects were also supported last year. Other objectives include: building capacity by working with project co-ordinators on large-scale and complex projects; supporting cross-sectoral partnership approaches targeting public, private, commercial and community buildings; encouraging the retrofitting of rental properties; helping to develop the retrofit supply chain; building relationships with communities and businesses; and developing community project management capacity.

A number of changes to the scheme guidelines were introduced this year, including: support for projects focused solely on residential upgrades; improved supports to address the particular challenge of retrofitting multi-unit developments such as flat complexes, such as scaffolding and communal areas; and a pilot focused on area-based home retrofit projects which will encourage CEG project co-ordinators, local authorities and local energy agencies to collaborate, with an ethos of leaving no home behind.

I thank the Minister for the reply. There are elements that I very much welcome, particularly the area-based approach. I know CEG was the pilot - I think it was in Cork. It may not be funded under that scheme in Fingal. I want to raise the change that was made in June relating to the guidelines from the CEG for real estate investment funds and commercial landlords to avail of the SEAI's retrofitting grant. I met representatives of the SEAI to discuss this and they confirmed that the purpose of this, as the Minister outlined, was to encourage real estate investment funds and commercial landlords to avail of the grants to retrofit rented properties. Approximately €81.6 million has already been drawn down. There is a risk that this will lead to renovictions and increasing rents for people. How will this be managed? We need to ensure that these funds are also available for individual properties with tenants in them and just not just hoovered up by real estate investment trust and funds.

I hear the Deputy's concerns. They are reflected in fact that with an AHB or some similar multi-apartment model, it is a 50% grant, whereas if it is dealing with a commercial rental organisation, REIT or others, it is a 30% grant. I am not so certain about the risks. The benefit is that it will mean lower cost for the tenant. We have a real difficulty in the rental sector. Tenants do not have agency or control and they end up paying higher bills unless the building is retrofitted. I said earlier that we should leave no home behind. We need to leave no category behind. The rental property sector deserves the same capability of living in a cosy home apartment and that simply needs to be done. We can look at a variety of different ways of doing it, but I think it is appropriate to provide them with something similar, if smaller, but still grant-supported so that they are not excluded. Those renters deserve our attention in what is increasingly really comprehensive. I referred to us being world leading earlier. What we are doing on retrofitting is increasing seen as world leading.

I do not disagree with the Minister. I and my party have been wrestling with how to deal with the private rented sector. The Minister has heard my concern over the risk that these well-organised, well-resourced real estate investment funds will take great advantage of this while small landlords do not. At the same time, there is potential for rent increases because we know renovation improvement works are one of the ways to increase the rent in a rent-pressure zone. I am flagging that this needs to be on the radar of Government and is something that we will certainly be tracking.

There is another thing that needs to be to be addressed. We asked for a breakdown of the private rented categories by real estate investment fund, AHBs and individual landlords. That data is not being collected. We were specifically told that they do not hold data providing for a breakdown by landlord type and that needs to be addressed.

I take both recommendations. It is a valid point. We need to monitor, measure and continually adapt. If there are signs that retrofitting is leading to big rent increases, increased evictions or any other such measure, obviously we would have to adjust and see what can be done. It is right to start going into the rental sector, however, and make sure it is not left behind. We need to monitor and adjust as we do so. It is an iterative process. It is important to give a signal in the medium term.

One of the benefits of the carbon tax, as we discussed earlier, is that every year we know that money will increase, with an additional €89 million this year outside the budget process. That gives a signal to the industry that we are serious. It is important to give the signal to the rental sector that we are also going into that sector now and it should start gearing up to get ready to improve the properties. That is in everyone's interest.

I am taking this question on behalf of Deputy Harkin. This question relates to the two previous priority questions on LNG facilities and the recent planning Act that just went through. What are the implications of the amendments made in the planning Act for the upcoming An Bord Pleanála decision on the LNG facility?

I will not read the prepared written response because it is similar to the answer I gave to the first question. All these questions relate to a similar issue.

I do not see any implications other than for a potential project. In Ireland's case a non-commercial temporary strategic storage facility would go through the strategic infrastructure process rather than to the local authority. That is a fairly standard process and procedure. The only reason for the amendment is to make sure that it is legally sound in any such development. There is nothing more to it than that. Particularly with a facility that is both offshore and onshore, we needed to regulate the broad planning Act system we have to reflect that and make sure there were no inconsistencies that would cause confusion or legal doubt.

I do not see any implications. I know that may have been read differently by others, but that is the absolute reality. It is reality because our strategy, as set out in the energy security paper, was published in November of last year. It was agreed, debated, discussed and I think voted on by the House. It sets out in real detail exactly what we are doing and nothing has changed in that. The amendment does not in any way change the strategic direction. The only thing that may change is, as I said, even in the past year the advance of this renewable, interconnection and battery-storage revolution has happened faster than people might have thought. The whole thing with a terminal is to cover gas insecurity for a short number of years before the arrival of renewables and other efficiency technologies, which really kill our use of gas. Gas use will dramatically fall; it has to dramatically fall. The only question is whether in the intervening period we need a gas storage facility or if, through the use of new interconnectors, better battery storage and anaerobic digestion giving us some gas supply as well as Corrib and power generation stations using backup strategic distillate facilities, which they can use, we could cover the gas. That is the question we need to answer.

I take what the Minister has said that that is the question that needs to be answered. In reality these amendments came forward on Report Stage in the Seanad and came back to the Dáil. We did not even get to debate them because the time ran out. If that clarity needed to be given in respect of planning applications or the planning Act, surely it was known about a year ago or six months ago. It could have been in the Bill that was put before the House here rather than being lumped in as a Government amendment in the Seanad, meaning that no debate took place on it in here.

That is the first question.

The Minister said in response to a previous question that he did not want to import fracked gas but he will now allow for an application to go through the process. That is what this is about. It is about making that process work but surely it is disingenuous to allow an application to go through the process, and to give somebody the indication that this is going to happen and is going to go ahead. They have to go through the whole planning process and through An Bord Pleanála when the Minister has no intention of allowing this happening at any stage. That seems to me to be a wee bit disingenuous and goes against the intention of what the Minister is saying.

On the amendments, this is a very extensive Bill. It was 900 pages in the end and there were 150-odd amendments on the last Stage in the Seanad. My sense from officials is that issue was about making sure the law was not contradictory in some sense. There were changes because we only established MARA last year and made the switch from the foreshore licensing system to this new marine planning system. That accounts for why an amendment may have come in late but I do not think we should read any more into it.

We have to be careful here. We have an independent legal system and people have a right to put in planning applications. It is important that An Bord Pleanála is independent, and any judicial decisions regarding that. We do not get into the legal arguments.

An Bord Pleanála also has to consider Government policy. We have to remember that the previous application, which was subject to that recent judgment, would have been made in September 2023 before the security paper, which is the key document in my mind setting out Government policy, was published. Obviously, An Bord Pleanála could not take it into account in any previous decision but in any revised one - and it has to be very careful as we have to be very careful not to interfere in the legal system in that way - it would obviously take into account what Government is saying. We maintain an independence but Government is clear in its position.

Just to get clarity from the Minister on it, these amendments he put forward make it easier for a developer to know and have clarity with regard to putting in an application to An Bord Pleanála, while knowing that it will not be passed at all. They would go to the expense of preparing the application, go through the whole process and go to An Bord Pleanála, knowing that it would not be passed. That is what the Minister is saying the purpose of these amendments is.

No. The amendment, from my perspective, is around us requiring a gas storage facility, which has both onshore and offshore components. With regard to those two systems, offshore planning is different from onshore planning, and by the very nature of such a storage facility, it might be both so we have to make sure that if there was a future application for such a facility, there would not be an incongruity. It was not in any way drafted with a view for any other planning application in mind. We are not going to draft legislation for the specifics of any other application. That is a matter for An Bord Pleanála and the courts to decide, not Government. The amendment was not related to that at all.

The USA, one of the largest producers but also consumers of liquefied natural gas, recently paused new LNG export approvals to review the significant public safety, climate and economic dangers of this technology. Will the Minister accept that Ireland should follow suit and undertake a review to consider some of those same harms?

I have not received a formal report from my Department on the actions undertaken by the Biden Administration as referenced in the question.

The Government approved and published the Energy Security in Ireland to 2030 report last November which concludes that Ireland’s future energy will be secure by moving from a fossil fuel-based energy system to an electricity-led system, maximising our renewable energy potential, flexibility and being integrated into Europe’s energy systems.

With regard to gas, the report determines that as a transitional measure, we will examine the introduction of a strategic gas emergency reserve to address security needs in the medium term, to be used only if a disruption to gas supplies occurs.

As a final part of the review of Ireland’s energy security, my Department, in consultation with Gas Networks Ireland, will complete a detailed examination to introduce a reserve in line with criteria and requirements determined by the Department which included a proposal that can be implemented quickly; one that does not inadvertently increase gas demand by increasing the supply available on the market; a cost-effective proposal at the appropriate scale which provides sufficient resilience if a disruption to gas supply occurs; and a proposal that is compatible with the Climate Action and Low Carbon Development Acts 2015 to 2021.

A State-led approach is based on the premise that the strategic reserve would only be used in an emergency. Additionally, the State-led approach is consistent with the climate Act and broader Government climate and energy policy avoiding the risk of fossil fuel lock-in or stranded fossil fuel assets. The work is continuing as a matter of priority.

As I said earlier, one of the issues on which further research and information is necessary relates to the timetable for introducing such a facility and the timelines within which gas demand may fall to reduce the risk. This has to be examined very closely. We know that, in this decade, we are at risk and are exposed. Given the likelihood that delivery of a strategic gas reserve facility may not happen until early in the next decade, analysis is required as to whether the planned dramatic reduction in gas use, particularly in the electricity generation sector, means that an alternative way to meet the energy security risk might be better. For example, future electricity interconnectors with the UK or France or what is fast-evolving long-term storage capability. This further research is something I have called for and that the Department is looking at before going back to Government and the Oireachtas with detailed analysis.

I thank the Minister. There is little mention there of the health and safety impacts of LNG, and as the Minister must be aware, it is a significant national security and public health risk for the nation. When LNG ignites, it creates a fire so hot that it can burn people, animals and vegetation up to a mile away. It is actually unlikely, having looked at the impacts of some of the previous explosions, that a whole region of Ireland would have enough emergency services to deal with an ignition. Has the Minister's Department considered encouraging the Commission for the Regulation of Utilities to review the health and safety impacts of LNG?

The Deputy is right. That is an issue for CRU and in the end, An Bord Pleanála is the relevant planning authority in any application for such a facility. CRU's role in gas regulation goes back, by my recollection, to the whole Corrib issue, where this was a central issue - whether we could guarantee the safety of local communities. CRU does that on an ongoing basis. I have not asked it, to be honest; I would have to go away and check what its most recent analysis is but I am not aware of it commissioning any specific analysis in that regard. The only Government position has been that we would not have a commercial facility. We were looking at a strategic facility. CRU's analysis of the safety implications of that would only come when there is greater clarity as to whether any such facility is being used.

I thank the Minister. We have done a huge amount of work on energy security reports and reviews, and there has been an incredible amount of research done by this Government into LNG, I suspect. It seems to be that there has been no research on the health and safety impacts for communities. Ireland has a very dispersed population, so when there is an incident with LNG, the evacuation zone is between two and three miles. For an area like Shannon, two or three miles is a lot of people to move from their homes and whose homes will be in grave danger.

In 2004, there was an explosion in Algeria that killed 27 people outright, and over 70 people were seriously injured. I wonder if the Minister could commit to undertaking a health and safety review of LNG?

By all means. Obviously, if any facility is built, that would be the first thing for consideration by both the regulator and the planning authority. You would have to make sure that you have all the processes and procedures in place. However, we are not at the position where we are deciding whether we would have any LNG facility. There is further analysis needed. The Deputy mentioned the international aspect to this in the US but there is also European analysis. I mentioned earlier on that I was at the European Energy Council today. One of the key discussions was around the sort of interconnection. There is key work we need to do with the UK Government in deciding future interconnection policy as well as with the French Government or, even potentially, extending further to Spain or to work with Belgium and other countries to deliver that interconnection.

The key first question, as I said repeatedly this evening, is around whether the advancement of such technology, along with storage and other capabilities, would mean that we would not require a facility.

Obviously, if there is a facility and we find that does not cover our needs, and we have a security risk, the first thing we would assess is the safety of any facility. That is something the CRU and the planning authorities will have to deliver.

I am taking these questions on behalf of Deputy Matt Carthy. I ask the Minister to outline the meetings he has had and the briefings he has received in respect of the North-South interconnector and whether he has had any meetings in this regard with local communities or landowners that are directly affected by the project.

I propose to take Questions Nos. 57 and 62 together.

The North-South interconnector is an essential transmission infrastructure project that will link the electricity transmission networks of Ireland and Northern Ireland, leading to a more secure, affordable and sustainable supply of electricity across the island. It will facilitate the connection of 900 MW of renewable generation, enough to power 600,000 homes through green energy. As a transmission project, it is being undertaken by EirGrid, which is independently regulated by the CRU, which in turn is accountable to a committee of the Oireachtas and not me as Minister. The Government does not have any role in the delivery of electricity infrastructure on the ground. This is consistent with the 2012 Government policy statement on the strategic importance of transmission and other energy infrastructure which states that the Government does not seek to direct EirGrid and ESB Networks or other energy infrastructure developers to particular sites, routes or technologies.

In March 2023, Government noted and published an independent report into the project which concluded that it would not be feasible to run the North-South interconnector underground, confirming that the findings of the 2018 report remained valid. As Minister, I have operated within the regulatory and policy framework regarding the delivery of electricity infrastructure and have not had meetings with community groups regarding the project. However, EirGrid had been and will continue to engage with the local communities and elected representatives affected by the development of the North-South interconnector.

Given the relevance of the project to the overall development of our electricity grid, when necessary I receive briefings from my officials on the current position, including for example in advance of my recent meeting with Conor Murphy, Minister for the Economy in the North, who has acknowledged the benefits which the interconnector will bring, including lower cost electricity, improved security of supply and greater investment in renewable electricity. In short, the most recent meetings I have had are with my officials and with Conor Murphy.

It is important that the Minister is across this as a project. With a united voice, those of us locally have said the project will not be delivered in the timeframe suggested or in the way EirGrid seems to have outlined. We have almost 20 years of evidence to that effect. From my end, and that of my colleagues, the frustration is that EirGrid does not seem to be listening. My concern is that the Minister is not engaging with EirGrid to advise it on this. The latest correspondence we are aware of concerns an extended period regarding letters of offer. I would like an update from the Minister on whether the CRU will allow special powers for ESB Networks.

We have to maintain a certain independence. Sometimes as Minister it can be frustrating because I always seem to say in the first line of a response that I do not have responsibility for something or have to retain a certain distance, but that is true because of our legal systems and the need to allow regulatory agencies like the CRU and the ESB to operate.

I have been across this project for 20 years. I will be honest. My view is that the project is badly needed. I hope EirGrid will be able to deliver it while supporting and causing minimum disruption to local communities. We have to heed local community interests. Having an all-island electricity system is of huge benefit to the North and the South. The North is particularly disadvantaged at the moment. It is estimated that by the end of this decade, not having an interconnector will cost Irish consumer €87 million a year. Not proceeding with this will stymie the economy in the North and northern counties would be badly disadvantaged. The project is slightly further advanced in the North. It is a project that has to go ahead on both sides of the Border. I expect the CRU, the ESB and EirGrid, if they cannot get consent through voluntary mechanisms, to use the provisions of section 47 of the Electricity Regulation Act 1999. The Act gives the CRU the power to grant special orders in that regard. I expect that will happen if we cannot get a voluntary agreement. I do not think the northern authorities want to go back to the drawing board.

While I thank the Minister, it seems that we are almost speaking different languages. The Minister made the case in terms of the merits and all-island strategic importance of the interconnector. I do not disagree with that, nor do Conor Murphy and my party. We disagree with the detail of the delivery of the project. To be fair, we have been proven correct for 20 years regarding this. Does the Minister have an update on the process? My understanding was that EirGrid sought a licence from the CRU for ESB Networks, under section 47 of the Act to which the Minister referred. Has that happened? If it has not happened, that may be indicative of something. What is it indicative of? Is the North taking a different approach? Has it had success in engaging with landowners? My understanding and expectation is that it has not. Ultimately, whether it is the Minister, another Minister or somebody else, we have to go back to the drawing board on this project or we will not deliver it in any way or form.

I do not think the northern authorities want to go back to the drawing board. I agree with them. As I said, we attended a meeting of the European Energy Council today and Mario Draghi's report was discussed. It is all about the grid and the future economy. Economic development in the North is not easy at the moment, given budget constraints and so on. If we do not develop the economy around this sort of infrastructure, it will be in deep trouble. I expect the North would like to see the project proceed and not go back to the drawing board. In fact, the North is further advanced and has, I understand, more widespread consent among the relevant landowners. There will be different views among landowners in the South, but I expect that the approach set out under the provisions of section 47 of the relevant Act are being considered. That is something the regulator has to deal with as an independent body.

I expect the project will advance. While maintaining my independence, my message is that we need to build the interconnector. It is good for the North and the South. In fact, if we do not have it, it would be a disaster for this country to go back to a divided energy system. That would be the worst outcome for this country and all of our people.

I want to ask the Minister if he is aware of the findings of the 2023 report from the Comptroller and Auditor General which states that 39% of carbon taxes collected are not accounted for. Can the Minister account for how his Department spent its carbon tax, the amount underspent or unaccounted for in 2023 and make a statement on the matter?

The programme for Government committed to allocate revenues raised from the increase in carbon tax rates out to 2030 to ensure that the increases in the carbon tax are progressive by spending €3 billion on targeted social welfare and other initiatives to prevent fuel poverty and ensure a just transition, to provide €5 billion to part-fund a socially progressive national retrofitting programme and to allocate €1.5 billion of funding to encourage and incentivise farmers to farm in a greener and more sustainable way.

Between 2020 and 2023, my Department was allocated €660.5 million in carbon tax funding, of which €482.1 million or 73% was spent. The underspend was largely due to the significant challenges faced by the residential and community energy retrofitting programmes due to the impact of Covid-19 and supply chain constraints. In 2023 specifically, €299 million in carbon tax was allocated to my Department, of which more than €262 million or 88% was spent.

Over the period, carbon tax has been invested in the SEAI’s residential and community energy efficiency schemes which have delivered nearly 108,000 home energy upgrades, of which more than 33,860 were to a B2 building energy rating and more than 14,200 of which were free to homeowners at risk of energy poverty. In the same period nearly 9,500 heat pump installations have been supported.

Carbon tax has contributed to Ireland’s overall contribution to the Green Climate Fund. The fund supports the efforts of developing countries to respond to the challenge of climate change. It was also allocated to the national just transition fund, which has supported 56 locally led projects in the most affected areas, generating sustainable business and employment opportunities and reskilling workers to engage with the green economy.

In 2020, carbon tax funding was allocated to my Department to fund the continuation of electric vehicle grants and investment in charging infrastructure. In 2021, responsibility for these two programmes transferred to the Department of Transport.

I thank the Minister for the reply. I am sure he has seen the Comptroller and Auditor General's report which indicated that 39% of the carbon tax increases are not accounted for. The Minister outlined a 73% spend by his Department between 2020 and 2023 and that, in 2023 alone, there was an underspend in the region of €37 million.

On the Comptroller and Auditor General's report, let us park positions on carbon tax and the difference between the Green Party and Sinn Féin. Surely we can agree that the issues highlighted by the Comptroller and Auditor General are concerning, that this funding has not been spent, has been returned to the Department of Public Expenditure, NDP Delivery and Reform and the Department of Social Protection and has not been properly accounted for. We do not have carbon tax headings in our accounting systems in various Departments and we cannot track whether money is being spent where it is supposed to be.

The Covid-19 pandemic was the main reason. It is not rocket science that during that period we were not allowed to build anything. We were not allowed to go into another house. Nothing could be retrofitted because people could not go outside a 2 km or 5 km radius. It took some time to ramp up from that but we have really ramped up. We will spend all the money this year and next year. There is a reasonable, clear and understandable explanation for why there was a significant underspend.

Regarding reporting, the money does not disappear. It goes back to the Department of Public Expenditure, NDP Delivery and Reform which has its procedures. The Comptroller and Auditor General will have to raise this with the Secretary General in the Department of Public Expenditure, NDP Delivery and Reform.

Perhaps we should look at this. In manifestos or elsewhere, people might consider how we learn, iterate and evolve. Do we want to look at ways in which to legislate so that money is specifically directed? We can look at that. Looking back at the past four years, however, Covid-19 hit us. It killed a lot of building activity for the guts of two years. Money was not misappropriated nor was it not known where it ended up. It followed absolutely proper procedures. If it was not spent, it was returned to the Department of Public Expenditure, NDP Delivery and Reform and followed its accounting and reporting rules.

It sounds like the Minister has not read the Comptroller and Auditor General's report because it specifically said it was not properly accounted for. It states that the payments were not recorded in specific carbon tax funding subheads and it was not possible to confirm independently if they were spent correctly. This is really important because, regardless of your position on carbon tax, and I accept the Covid-19 argument, the Minister has made a lot of the fact that carbon tax is being collected to spend on climate action projects and it is clear from the Comptroller and Auditor General's report that it has not all been spent and, equally important, and it should be a concern for the Minister, it is not being accounted for appropriately by using carbon tax specific subheads. Surely that needs to happen in every Department.

I am not using Covid-19 as an excuse. I am just pointing out the reality, as the report also does. I am not evading or avoiding that the Comptroller and Auditor General said we should be looking to audit an account and track it in a different way. I do not rule that out. I accept the point being made. We may need to look in the future at whether we want to hypothecate in a way that is much more specific and traceable and different from the rest of Government expenditure, where if there was an underspend, it would not be returned in the way it is in a standard ordered way. That is how the money was returned. One can disagree with that approach and say we should perhaps have a different accounting system for carbon tax. I accept that. It is a matter for future programme for Government negotiations. We cannot retrospectively change it.

There are two key points. First, Covid-19 was the main reason for the underspend. Second, you can be critical, as the report is, of the accounting and reporting systems, but they are not outside the norm. It was within the context recommended by the Department of Public Expenditure, NDP Delivery and Reform spending rules.

Will the Minister provide an update on the funding streams available for geothermal heating systems, including the amount drawn down to date in 2024? It will not come as a shock that I am still looking for a solution for Carlinn Hall, which has a communal heating system. I have been told there is a need to look at the support scheme for renewable heat for district heating across the board and that it is not fit for purpose at this point.

The Sustainable Energy Authority of Ireland, SEAI, manages a number of residential and community energy upgrade grant support schemes on behalf of my Department. Grant support of up to €6,500 is available to install heat pumps under the better energy homes scheme, and up to €10,500 under the national home energy upgrade scheme or the community energy grant scheme. The SEAI has advised that, to the end of September 2024, grant support was provided for 2,584 heat pump installations.

The SEAI only records the specific heat pump technology installed under the better energy homes programme. Of the heat pump installations supported under better energy homes to date this year, €286,000 in grant support was provided to homeowners in respect of 40 ground-source-to-water heat pump systems and four water-to-water systems. An installation grant of up to 40% for investment in renewable heating systems using ground source heat pumps is also available through the SEAI’s support scheme for renewable heat, which provides financial support to help businesses move to renewable heating.

While the SEAI does not provide dedicated funding for geothermal heating schemes, it does fund related research, including an assessment of the viability of retrofitting an existing communal heating system at Carlinn Hall, Dundalk, County Louth with a shallow geothermal heat pump system. The report on the research, which was published in November 2023, contains recommendations in relation to heat network efficiency and options for low-carbon heat alternatives, including costs of installation and operation. The scheme in question is privately owned and managed, and the implementation of any of the recommendations is a matter for the relevant parties to decide upon.

I get the idea of front-line energy and managing the system. At the moment, gas is being bought from Energia which deals with a management company which is made up of the residents. It creates a whole pile of issues.

I have spoken to some third party companies about this matter. They are considering anything that could be a geothermal solution, for example, a column-type system allied with a hybrid system with a number of heat pumps, even if they are not specific to each residence. We need to make changes to the support scheme for renewable heat so that it might suit this type of system, enabling a long-term contract to be drawn up between the management company, the third party provider and the likes of Frontline Energy in order to provide something that is better in terms of the environment and cost.

I accept the Deputy's point. The option is there, and it is a matter for the developer and the residents as to whether they want to go down the route of being able to avail of a 40% grant and whichever is the most suitable technology.

To be more innovative and consider other measures, my Department is drafting a new heat Bill to establish a regulatory model for district heating, including communal heating systems, ensure consumer protection and deliver a vibrant district heating industry. Within the Bill, we could consider whether other measures are possible, but a 40% grant is not insignificant.

It is difficult in the case in question, given that there was such a spike and high prices hit home hard. Gas prices have come down, but they are still high by historic standards. It is a matter for the developer and the residents to work out which approach they might take, but the heat Bill will be coming soon and I hope it will provide further options for the residents. The grant system is not a bad one. It is a significant grant support.

I am not saying it is not. Rather, we need to examine whether the operation of the grant system suits this. Others who have been involved in the wider idea of district heating systems have said that the support scheme for renewable heat would have to be altered to facilitate real moves. Regardless of whoever is in government when the Bill is enacted, it will be necessary. We all accept that these gas-fed communal systems are not perfect and just fell into operation. We need a regulatory model to ensure that we have something better. We do not know what the future holds for gas hikes, but we know that this system is not perfect.

It is not the developer but the residents and this is a major imposition on them, so we have to facilitate them. There will need to be some element of State involvement. The SEAI is open to having conversations, but we need to consider the question of how we provide grants to ensure this approach works.

Gas only kicked in due to supply difficulties. Another avenue for us to consider this matter would be through revisions of the support scheme for renewable heat, SSRH, but that would have to fit into whatever we do with the heat Bill.

I accept the Deputy’s point. We will have to consider this matter further and see how we can deliver district heating in so many guises. It is taking longer than I would like. We have seen it working in other countries. We need to make it work here and we need to learn. There are relatively few examples. Carlinn Hall is only one of two or three at most.

Regarding non-domestic gas works regulation, what engagement has there been between the Department, the CRU and all the other stakeholders? This area has not been regulated fully and there are particular issues. Will the Minister ensure that they are addressed and we have a system that is fit for purpose?

As the Deputy may be aware, under section 9F of the revised Electricity Regulation Act 1999, the Commission for Regulation of Utilities is responsible for the regulation of gas installers in terms of safety. The CRU will shortly seek to introduce a statutory instrument to regulate non-domestic gas works by expanding the scope of the registered gas installers, RGI, scheme. My Department has delegated to the CRU responsibility for carrying out the proportionality assessment for this proposed regulation, as required under SI 413 of 2022. My Department has been kept informed of the progress of the new regulation, but the CRU is statutorily independent in the performance of its functions and is accountable to a committee of the Oireachtas.

The CRU has advised the following in respect of its engagements on this matter. The CRU previously carried out a number of public consultations during the years 2014 to 2022 regarding non-domestic gas works. These consultations and decision papers are available on the CRU’s website, www.cru.ie. The CRU also engaged with key stakeholders through committees and bilateral meetings during those years. This engagement is ongoing, with the CRU due to commence a further public consultation on aspects of the expanded RGI scheme shortly, informed by recent feedback from industry. A decision paper on scheme rules and obligations and an updated criteria document will be published as part of the consultation.

The Deputy may wish to note that the CRU provides a dedicated email address for Oireachtas Members, which enables them to raise questions on regulatory matters with the CRU, at oireachtas@cru.ie for timely direct reply.

Deputy O’Rourke and I have had an engagement with the installers’ representative panel. The panel is reasonably happy that there has been some movement in the correct direction. Has the CRU sought specific legal advice to clarify that what has been introduced is legally binding and is there evidence of the CRU verifying the legal position should any accidents occur and the insurance implications of same?

As with Deputy O’Rourke, I welcome the sort of feedback Deputy Ó Murchú is providing. We can be confident in some ways. In a sense, we regulated the domestic first and the lessons learned from that will help to ensure that any legal or other training issues are ironed out quickly, giving confidence to the commercial enterprises that are getting work done and to the industry that is carrying out that work.