Ireland’s clean energy transition is mired in “policy gridlock and incoherence”, lobby group Ibec has claimed.
In a new report, the employers’ group is highly critical of what it describes as the lack of a “clear and compelling vision” for what a net-zero economy “means and looks like in practice”.
The reduction in emissions is not happening fast enough because the State is struggling “to decouple economic growth from emissions growth”, particularly in the transport and enterprise sectors, it said.
The Environmental Protection Agency (EPA) projects that emissions cumulatively across all sectors are set to fall by 9 to 23 per cent this decade on 2018 levels, well below the national goal of 51 per cent.
The 2024 Draghi report on EU competitiveness stated that Ireland had the worst permit-granting process for onshore wind at nine years, 50 per cent slower than the EU average and three times longer than the process in Finland.
“There are several technology-specific strategies, policy frameworks, action plans, and initiatives, but no central co-ordinating office or instrument,” Ibec said in its report.
“Ownership of the transition is widely spread across government departments and agencies with no single authority able to resolve interdepartmental conflicts, solve problems, direct resources, and make decisions where trade-offs are necessary,” it said.
The main consequence of this policy gridlock is regulatory and investment uncertainty, it said.
Ibec said the State must play a more active and hands-on role funding the energy transition.
“In practice this means scaling up and developing new capital and operational supports for renewable technologies with more generous incentives,” it said.
Ibec also claimed energy costs could be reduced by replacing Ireland’s electricity public service obligation with a dedicated fund and reducing other energy fixed costs through direct state investment in energy networks and enabling infrastructure.
It claimed this level of intervention was going on in other EU countries while Ireland was uniquely placed to pursue a more active role given its access to significant capital through the Climate and Nature Fund (€3.1 billion), annual carbon tax funds (€900 million).
Ibec noted that the estimates suggest Ireland’s energy transition could cost up to €200 billion over the next 25 years with at least €17 billion needed each year by the year 2030.
“The State has a critical role in mobilising, derisking and crowding-in this private investment through targeted supports. It must also be prepared to step-in where there is market failure,” it said.
In its report, the business lobby said Ireland faces “an enormous challenge” to get its net zero process back on track while noting the task has not been made any easier by the current economic and geopolitical environment.
“A slowdown in the world economy and the closing of Chinese markets for US oil and gas could lead to lower gas prices further threatening the business case for costly climate solutions and investment in renewables,” it said.
