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The EU Green Deal – what’s in it for Ireland?

Trillion-euro plan will have a huge impact on public and private investment

The European Green Deal (EGD), the EU’s ambitious plan to lead the world on climate change, will have enormous impact on both public and private sector investment. What’s needed now is enormous awareness to go with it.

"I don't think people realise this is akin to the industrial revolution. People are 'getting' it, but not quite getting the extent of the changes that will happen as a result of it," says Mike Hayes, global head of renewables at KPMG.

Not only do all roads now lead to pastures greener, but velocity has been significantly increased.

COP26, the UN’s Climate Change Conference, which takes place in Glasgow in November, “will drive this agenda into overdrive,” says Hayes.

“In terms of policies – from China to India, the US, UK and EU – there has never been such alignment. All things point to more action in this area, by both governments and corporations,” says Hayes.

Through its Green Deal, Europe is effectively laying down the law to member states and demanding significant action.

“So much of the EU’s capital spend from here on in will be focused on the green agenda,” says Hayes.

The Green Deal is pitched as both a growth strategy and a roadmap for making the EU’s economy sustainable and enabling it to achieve its commitments under the Paris Agreement.

It proposes increasing the EU’s emissions reduction targets for 2030 from 40 per cent to at least 50 per cent – and towards 55 per cent compared with 1990 levels.

Delivering that will require a transformation of the EU’s economy across a range of sectors including transport, construction, agriculture, industry and energy, all of which will have to become more environmentally sustainable.

The EGD requires the EU to restructure policies across a number of different areas, including clean energy supply, industry, production and consumption, large-scale infrastructure, transport, food and agriculture, construction, taxation and social benefits.

Net zero emissions

Here, the Government’s Climate Action and Low Carbon Development Bill, approved in March, commits Ireland to achieving net zero emissions by 2050, and to securing a 51 per cent reduction in emissions by 2030.

The action required to achieve this will see a range of investment opportunities open up, including for increasing the electrification of heat and transport, improving the energy efficiency of buildings, reducing emissions from agriculture and developing cleaner public transport.

Large-scale financial instruments are being established to help, including the €7.5 billion Just Transition Fund, of which an initial allocation of €30 million has been proposed for Ireland.

The Sustainable Europe Investment Plan is set to unleash more than €1 trillion of sustainable investments over the next decade, from a combination of funds.

Investment in research and innovation will soar, thanks to the new Horizon Europe, the EU’s research and innovation programme 2021-2027, which is backed by a biggest-ever budget of over €95 billion.

Much of this is earmarked for the funding of new climate solutions, so expect a raft of investment in areas such as transport, clean hydrogen, construction and the circular economy.

Investment in education and training will support the EGD, with the proposed European Social Fund+ helping workers to acquire the skills they need to transfer from declining sectors into growing ones.

Massive opportunity

It’s a massive opportunity for Ireland, which has already secured more than €1 billion from Horizon 2020, Horizon Europe’s predecessor, an exceptionally strong performance on a per capita basis.

"To build on our success in Horizon 2020, where over 2,700 Irish entities were involved in grant agreements, Enterprise Ireland encourages all Irish researchers, innovators and newcomers across all disciplines to look at the opportunities under the new programme," says Garrett Murray, Enterprise Ireland's national director for Horizon Europe.

He is urging anyone else keen to capitalise on the new opportunities emerging to get in touch for information, funding, guidance, expert support in evaluating opportunities, and making applications.

The new European Innovation Council (EIC), a €10 billion initiative that awards prizes under Horizon Europe to develop and expand breakthrough innovations, is currently kicking off.

It combines research into emerging technologies with an accelerator programme and dedicated €3 billion equity fund, to help scale up innovative start-ups and small and medium-sized businesses (SMEs).

The new EIC Pathfinder, a programme for multi-disciplinary research teams, is worth €300 million, including funding ringfenced for innovations related to green hydrogen.

All projects of the European Innovation Council have access to business acceleration services such as coaches, mentors and expertise, as well as partnering opportunities with corporates and investors. Funding will be there not just for hard sciences but for social sciences innovations too, Murray points out.

“A central plank is the citizen engagement and how you are bringing in communities,” he says. “As it evolves, there will be huge opportunities for actors from all walks of life to engage in it, not just the researcher in the lab.”

Offshore wind

There are clear opportunities for the renewables sector, including offshore wind, says KPMG’s Mike Hayes, who says investor interest in new schemes on both the east and west coast of Ireland is growing.

“Investors are seeing the scale and ambition of the EU on this,” he says. They also see that the government here has ambitions to make green electricity, and green hydrogen, a byproduct, not just for domestic demand but for export too. “Ten years ago I said that offshore wind is to Ireland what oil is to Saudi Arabia,” says Hayes.

There are challenges, cautions Garret Farrelly, a partner and head of the Energy, Natural Resources and Utilities Group at law firm Matheson.

He also chairs Matheson’s Environmental, Social and Governance (ESG) Advisory Group, a cross-sectoral legal services group which assists companies to navigate and respond to the rapidly evolving ESG landscape, with legal expertise in the areas of climate action, energy, natural resources and utilities, waste and the circular economy.

It works with clients across a range of topics enveloped by the EU’s Green Deal, including sustainable commercial real estate and construction, sustainable finance and investment funds, and environmental and planning.

The Government has shown huge ambition with the Climate Action and Low Carbon Development Bill, says Farrelly, pointing out that permitting and simply “getting projects built” remains a key challenge. Over the last four or five years the vast majority of projects have hit objections.

“Everybody wants to see more windfarms in Ireland, just not at their back door,” says Farrelly. Giving people the opportunity to invest in these as a community has worked very well overseas, he points out.

Hence the EGD’s clear emphasis on citizen engagement, and in particular community buy-in.

If the deal is to kick off a new industrial revolution, it needs to make sure everyone is on the same side. Says Enterprise Ireland’s Garrett Murray: “Unless we all move together we won’t reach these very ambitious targets.”

Sandra O'Connell

Sandra O'Connell

Sandra O'Connell is a contributor to The Irish Times

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