Ireland needs €35 billion to reach EU 2030 carbon emissions targets
14 March 2017
The EU Council agreed in October 2014 to a 2030 Climate and Energy Policy Framework with a binding target of 40% reduction in greenhouse gas emissions compared to 1990. This was subsequently recast as a 43% reduction in ETS (Emissions Trading Scheme) sector emissions and a 30% reduction in non-ETS emissions, both compared to 2005.
The latter target, referred to as an Effort Sharing Decision, was distributed amongst Member States in July 2016. Ireland’s commitment was set at 30%, but with special flexibility:
- To transfer ETS allowances, which would normally have been auctioned by Ireland, to the Non-ETS sector, by an amount equivalent to 4% of Ireland’s Non-ETS emissions in 2005; and
- To further offset emissions in the Non-ETS sector by credits arising from LULUCF (Land Use Land Use Change & Forestry) of up to 5.6% of Non-ETS emissions in 2005.
Thus, Ireland’s non-ETS 2030 target was set at 20.4% below the 2005 level, if all allowable offsets can be achieved. A new report by the Irish Academy of Engineering, entitled Ireland’s 2030 Greenhouse Gas Emissions Target: An Assessment of Feasibility and Costs, has been produced based on its assessment of the technical feasibility and costs of achieving these 2030 commitments.
The ETS sector
Electricity generation – this accounted for 11.2 million tonnes or around two thirds of Ireland’s ETS emissions of 16.8 million tonnes in 2015. The carbon intensity (g CO2/kWh) of the electricity sector in Ireland has halved between 1990 and 2015. The Academy believes that an 80% reduction in carbon intensity in the electricity sector from 1990 levels is achievable by 2030.
This would reduce electricity generation emissions to 6.7 million tonnes by 2030, allowing for a 2% per annum growth in electricity demand. The Academy has investigated three options – moving to very high levels of wind generation, substitution of peat and coal by biomass, or increased use of gas for generation but using carbon capture and storage to reduce emissions. All options require very high levels of capital investment.
Emissions elsewhere in the ETS sector – energy industries other than power generation and large manufacturing industries accounted for around 5.6 million tonnes of emissions in 2015. Significant energy efficiency gains have already been achieved in these industries. The Academy expects the downward trend in emissions from these industries to continue up to 2030, in line with trends in ETS industries elsewhere in Europe.
The non-ETS Sector
Agriculture – this is by far the largest sector outside of the ETS – accounting for around a third of Ireland’s total GHG emissions in 2015 and 46% of non-ETS emissions. Detailed assessments and research need to be carried out to identify the most cost-effective ways of reducing emissions in the agriculture sector. The costs and economic implications of reducing emissions in Ireland’s agriculture sector need to be fully quantified and then weighed against the costs and economic impact of abating emissions in other sectors of the economy.
Transport – transport emissions have increased in each of the last four years and are projected to increase further in the coming years. The Academy examined various measures to reduce transport emissions – upgrading transport infrastructure, incentivising greater efficiency in the transport fleet and modes of transport including electric vehicles and biofuels, as well as the elimination of fuel tourism. Even with these measures, the Academy estimates that transport emissions will increase from 11.8 million tonnes in 2015 to 13.4 million tonnes in 2030, based on its model which incorporates technological developments and economic growth.
Residential sector – emissions from this sector have declined by about 25% in the past five years, down to around 6.0 million tonnes, allowing for temperature correction. The Academy believes there is considerable scope for further reduction – down to as low as 3.0 million tonnes per annum by 2030. This reduction could be achieved by significantly increasing the pace of insulation upgrades on existing dwellings, conversion from oil to gas-fired central heating in urban areas, use of heat pumps in rural dwellings, applying the latest energy efficiency standards to all new builds and a range of other measures considered in this report.
Commercial and public-sector buildings – emissions can be reduced by up to 30% through improving energy efficiency, upgrading insulation, strengthening building standards and the adoption of renewable heat alternatives, such as biomass boilers.
1. Ireland’s ETS emissions can be reduced by almost 50% from 2005 levels by 2030 – ahead of the EU 43% target. The Academy believes that potential strategies exist to reduce carbon intensity in the electricity sector and reduce Ireland’s emissions by around four million tonnes CO2 eq from 2015 levels. Detailed feasibility studies need to be carried out on these potential strategies and the outcome of these studies should inform Government strategic infrastructure and investment planning. Very considerable investment is needed in all cases and this will clearly have an impact on electricity prices and Ireland’s price competitiveness.
2. Reducing non-ETS emissions will be hugely challenging and very costly. Ireland should use maximum flexibility allowed under EU rules to reduce the non-ETS target (nominally 30%) to 20.4% by using surplus allowances from the ETS and credits from land use and forestry. But even with these adjustments, it will be very difficult to achieve the non-ETS 2030 target.
3. Reducing transport emissions will be the greatest challenge. Ireland’s transport emissions have increased in each of the last four years and are projected to increase further in the coming years. Based on the Academy’s analysis, Ireland’s transport emissions will increase in line with real economic growth as indicated in the period to 2030 by 8%, from 2015 levels if the economy expands at 2% per annum (by 24% if the economy expands at 3% per annum).
Tackling emissions in the transport sector needs to be given the highest priority. Capital expenditure on new public transport infrastructure projects of €0.65 billion a year will be required for the next 15 years. Greater use of public transport needs to be promoted and incentives also put in place to encourage changes in mode of travel. Conversion of public transport and goods vehicles to CNG, and ultimately to biogas should also be prioritised.
4. Emissions in the residential sector can be reduced by conversion from oil- to gas-fired heating in urban areas, installation of heat pumps in rural homes, a major insulation retrofitting programme on around 1.6 million homes and building all new homes to the latest energy efficiency standards and Nearly Zero Energy Buildings (NZEB) standard from 2020 onwards. GHG reductions can also be achieved in the industrial and commercial sector through further energy efficiencies, substitution of gas for oil for heating requirements and applying NZEB standards to new buildings.
5. Achieving the 2030 targets will be enormously costly for Ireland – requiring a capital expenditure of around €35 billion up to 2030. There would be savings on fossil fuel imports, but these are modest in comparison. Issues such as affordability for Ireland, impact on cost competitiveness, funding and prioritisation will need to be addressed by Government. It must be emphasised that the overarching priority must be to prudently reduce national energy demand and promote energy conservation/efficiency measures while ensuring continued economic growth.
6. The Irish Academy of Engineering’s analysis concludes that the non-ETS targets cannot be achieved without a significant reduction in GHG emissions from the agriculture sector. The Academy estimates that a reduction of 1.4 million tonnes in agriculture emissions, from 2014 levels, will be needed to achieve the 2030 target. This is in addition to the credits which will be available to Ireland from carbon sequestration though changes in land use and more forestry.
Given the very substantial capital investment required to achieve the projected level of emissions reductions in other sectors, it is essential that a full cost benefit and socio-economic analysis is undertaken to determine whether additional emissions reductions in the agriculture sector would be nationally more cost-beneficial.
The Irish Academy of Engineering’s conclusion is that the 2030 targets are just about feasible but will require huge investment. The measures identified in this report would require an investment of approximately €35 billion by 2030. The cost of reducing emissions in certain sectors has not been estimated, due to a lack of data and therefore the total cost is likely to be significantly more than €35 billion.
The approach taken by the Academy is to maximise emission reduction in the ETS sector and minimise emission reduction requirements in the non-ETS sector, where GHG reduction opportunities are more difficult and generally more expensive to implement. A detailed analysis needs to be carried out of the costs and the socio-economic implications of reducing emissions in all sectors, including agriculture. Decisions can then be taken on the most effective strategies to achieve the 2030 targets.
The Academy hopes that this report will trigger more debate and detailed assessments of the best options to reduce Ireland’s GHG emissions within the various sectors. Then decisions can be taken on emissions reduction strategies which best serve the national interest.
Please click the following link to read the full report: Ireland’s 2030 Greenhouse Gas Emissions Target: An Assessment of Feasibility and Costs
SEMINAR ON REDUCING TRANSPORT EMISSIONS:
The Engineers Ireland Energy and Environment Division is hosting a seminar, ‘Reducing Transport Emissions: The Engineering Challenges and Opportunities’, on Wednesday, 29 March. With a major transition now required in how we meet our energy needs, this seminar will present the engineering challenges and opportunities associated with meeting our EU and COP obligations and delivering a sustainable, secure and affordable transport sector. Click here for more information.
Delegates will learn:
- Ireland’s Transport Aspirations and Ambitions
- The Government’s blueprint for a low carbon transport sector
- The role e-Roads, electric vehicles, biofuels and biomethane freight and public transport can play in delivering low carbon transport solutions
- Best international innovations in Tackling Urban Road Congestion