The Government may have to choose whether or not it overhauls farm systems and other sectors in a bid to meet its greenhouse gas emissions targets.

Under the Government’s national Climate Action Plan, the agri-food sector needs to cut its emissions by between 10% and 15%.

New Minister for Public Expenditure and Reform, Michael McGrath, has been told by his department's officials that “the Government will be faced with choices about overhauling the systems of production in a number of sectors, including agriculture”.

The Minister was told that Ireland will likely miss the 2020 target by a “considerable margin” and will therefore have to buy carbon credits to achieve compliance

“There are significant potential demands for exchequer funding on measures to achieve the reductions, or buying units to use for compliance.

“If Ireland does not reach its annual emissions target, the gap will roll on into the next period, making it more difficult to achieve future targets,” Minister McGrath has been told.

Buying carbon credits

The Minister was told that Ireland will likely miss the 2020 target by a “considerable margin” and will therefore have to buy carbon credits to achieve compliance.

“Since the EU as a whole will comfortably meet its target, there will be an excess supply of credits and compliance is likely to cost in the region of €2m to €14m,” they said.

On renewable energy, Ireland is likely to achieve 80% of the required progress towards the target (13% achieved, 16% target), but Department officials said progress on renewable energy has been slower in general across Europe and as a result, buying compliance will come at a higher cost.

In 2019, some 3,550ha of forestry was planted. This fell well short of the 6,900ha target

“This is likely to be in the range of €20m to €40m per percentage point shortfall, suggesting that a 3% under-achievement will give rise to a likely total compliance cost of €60m– €120m.

“Any statistical transfer transactions must be completed by April 2021. No funding has yet been provided for this purpose, but will have to be addressed in Budget 2021,” officials said.

Forestry

Department officials also told Minister McGrath that the State’s afforestation grant programme has “not achieved planting targets” over the last number of years.

Figures from the Department of Agriculture show that in 2019, some 3,550ha of forestry was planted. This fell well short of the 6,900ha target. The last Government aimed to plant 8,290ha in 2020.

Further changes will be necessary across the sector to reflect the nature of the new trading relationship

Brexit

On Brexit, the Minister was told that it continues to pose a significant threat to the agri-food sector.

“Further changes will be necessary across the sector to reflect the nature of the new trading relationship.

“In the longer term, potentially significant tariff and non-tariff barriers to trade, as well as interruptions to just-in-time supply chains, could have a considerable negative impact,” Department officials said.

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