Alan Farrell (Dublin Fingal, Fine Gael)
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This is a meeting held in conjunction with the Joint Committee on Environment and Climate Action. Its purpose is to discuss the relevant European Court of Auditors report relating to the remit of both committees. On behalf of members, I welcome the president of the European Court of Auditors, Mr. Tony Murphy, secretary in the cabinet of the president, Ms Emily Davis, and attaché in the cabinet, Mr. Peter Borsos.

I will now go through some housekeeping matters. On privilege, witnesses are reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity. Therefore, if their statements are potentially defamatory in respect of an identifiable person or entity, they will be directed to discontinue those remarks. It is imperative that they comply with any such direction.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable. I remind members of the constitutional requirement that they must be physically present within the confines of the Leinster House complex to participate in public meetings. I will not permit a member to participate where he or she is not adhering to this constitutional requirement. Therefore, any member who attempts to participate from outside the precincts will be asked to leave the meeting. In this regard, I ask any members partaking via Microsoft Teams to confirm that they are on the grounds of the Leinster House campus prior to making their contributions.

I am pleased to chair this joint meeting of the joint committees, which I hope will be an interesting couple of hours. I invite Mr. Murphy to make his opening statement.

Mr. Tony Murphy:

I thank the Chair and members for the invitation. It is a good opportunity for us to showcase some of the work we do in areas that are of interest to them. Sometimes people think the European Court of Auditors looks at just the accounts of the EU, which we do to some extent, but we also do a lot of work in various policy areas. I might introduce the court, given not everyone is aware of it. We will then get to matters at hand, namely, issues relating to climate and transport.

We are based in Luxembourg, as some members will know. The Chair and Senator Horkan have visited us there, with the Senator having visited the court as part of a delegation a few years ago. Ours is one of the seven EU institutions, which is important. While we were founded in 1975, we became an institution after the Maastricht treaty, which put us on the same footing as the other institutions. We are there to strengthen EU accountability and transparency. To put it in simple terms, we are basically the equivalent of the Comptroller and Auditor General for the EU budget. We deal with the budgetary control committee in the European Parliament, which is the equivalent of the Committee of Public Accounts here. We also liaise with the various national audit offices, such as the Comptroller and Auditor General here, in all the member states. We are not really fraud investigators - two other bodies in the EU look after that, namely, OLAF and EPPO. Nonetheless, we have reported cases where we have come across fraud in our work. In 2023, for instance, we reported 19 cases to OLAF and 17 to EPPO. Members will see that our circulated statement outlines what we do. We provide an assurance that money is being spent in line with the rules and assess the impact on different policy areas. We try to ensure there is transparency in the use of the EU budget vis-à-vis the European taxpayer.

As for the structure of our organisation, we have between 900 and 1,000 members of staff. There are 27 members, much like how the Commission comprises one Commissioner from each member state, and we are split into five chambers covering the policy areas. Chamber I relates to the natural environment and natural resources, that is, the environment and climate area; chamber II, to cohesion; chamber III, to external relations such as migration, cybersecurity and Ukraine; chamber IV, to research and development, competition, economic surveillance and so on; while chamber V is a horizontal category looking at the EU budget as a whole.

We do a lot of work across all these different policy areas and we are following the EU funding but all these policies are subsequently implemented at member state level so there are implications for the different member states.

Currently there are 25 Irish staff in the European Court of Auditors and three Irish trainees are starting. We proactively try to get in trainees - it is a five-month stint - and have been quite successful in that regard in the past couple of years. As we must produce everything in all the official languages, of which there are now 24, including Gaeilge, we have translators who ensure all our reports and correspondence with the member states are available in the official languages.

We have two main pillars of work. One is the more traditional of financial and compliance audits. That takes up 50% of our time and results in our annual report, which will be published this year on 10 October, which is quite soon. In addition, the five chambers, which I outlined, produce around 30 to 32 special reports. These are reports that focus on particular topics which we think are of interest to policymakers, decision-makers and perhaps the public at large in some cases.

In our work programme for 2024, climate change and the environment accounts for 30% of our work. It really is an area on which we concentrate and produce outputs which are of use to different legislators and policymakers. That is followed by fiscal policies and public finances. All the chambers produce various tasks, with 36 new tasks commencing in 2024. For instance, under climate change, we are conducting 11 audits. We will be looking at combating hunger, sea water quality and managing forest wildfires among others.

Getting more to the bones of the matter, I will turn to climate action funding in the EU. There was a commitment by the Commission to spend 20% of the EU budget for the 2014-20 programming period. That amounts to €216 billion on climate-related actions. We did an audit that said this figure was overstated by €72 billion. We are saying that while the Commission said that €1 in €5 was the headline figure to be spent, it was much less than this in reality. For 2021-27 there is a €610 billion envelope for climate-related actions. That is roughly €87 billion per year. On top of the MFF, which is the normal budgetary process, there is an exceptional instrument, the recovery and resilience facility. Again, a large chunk of that facility was allocated to funding climate-related actions. It was €275 billion. Again, we have issues on this. We issued a report last week where we found that the Commission tended to be a little optimistic when it categorises expenditure as green in terms of the coefficient it gives to it. There are different coefficients depending on whether they think it is very substantial and these can vary from 100% to zero. We found cases where we disagreed with the Commission. For instance, it had qualified certain items as 100% but in our view it was zero. These are challenges in making sure that green expenditure is really green.

The other important issue is that while it is an awful lot of money, meeting zero emissions by 2050 would mean having €1 trillion per year in the period 2021 to 2050. There is a big difference between the €87 billion - as I say, the RRF is once-off – and the €1 trillion per year. These are some of the kind of issues that were raised in the recent Draghi report which I am sure the members have all heard about.

On our role, chamber I is the one primarily, though not solely because in chamber II we have done a lot in the past, responsible. The focus has shifted more to climate. In the past we did a lot of work on inter-modal freight transport and all sorts of other transport issues. These things come in cycles. In essence, we follow the work programme of the Commission. We have independent audits where we look at how policy is being implemented. We take a sample of member states and try to identify challenges or risks they are facing so that other member states can take note of them and if there are good practices that they can also take those on board.

Some very ambitious targets have been set by the EU. This includes the reduction of greenhouse gas emissions by 55% compared with 1990 levels, and zero by 2050. The target is to reduce ETS emissions by 62% and non-ETS by 40% under the effort-sharing regulation. We have binding national targets in that regard. There is a target of at least 42% of renewable energy share by 2030 and to reduce the net land use, land use change, forestry, LULUCF, emissions by 310 Mt CO2 eq by 2030. These are all very ambitious targets. We are looking to see how the Commission is trying to address these in co-ordination with member states because, ultimately, many of the areas are in the competence of the member states.

In preparation for this meeting we looked at a couple of the reports that we wanted to highlight today, without going into too much detail. Ireland has not been selected as one of the member states of the four or five we go to, as I said. Nonetheless, we looked at Ireland’s climate action plan, CAP. At €165 billion over the period 2021 to 2030 it is significantly above the EU average. The CAP’s ambitious goals, including support for electrification and biomass adoption, are the kinds of things that are reflected in the reports we have done.

Turning to national targets, Ireland proposes to achieve a 51% reduction in GHG emissions by 2030 compared with 2018 levels. In this context Ireland’s target is 42% by 2030 compared with 2005 levels. This comes from the effort-sharing regulation. In the carbon budget there is an allowance of 295 Mt CO2 eq for 2021 to 2025. That has been reduced to 200 Mt CO2 eq for 2026 to 2030. The aim is to have 80% renewable electricity share by 2030. Ireland has a binding target of reducing the LULUCF emissions by 0.626 million tonnes by 2030.

We looked at Ireland’s policies under the climate action plan. In it, we see things that link very nicely into the reports that we want to present. There is the hydrogen strategy for Ireland, EV action plan and infrastructure strategy, renewable transport, energy security and the electricity storage policy framework. These are elements of the climate action plan here. Some of the key reports we have issued in recent years on these areas include the sustainable biofuels in transport and on electrical recharging infrastructure. We issued a report on industrial policy on batteries, which is very interesting. They are all interlinked. The policy on batteries is linked in a way to the transition to electrical vehicles in terms of having the batteries to power them. We have reports on the circular economy, EU climate and energy targets and industrial policy on renewable hydrogen. The latter report was issued recently. From a transport perspective, we issued a report on road safety. This shows the broad nature of the audits we carry out. We are following issues that are of relevance to EU citizens. That is part of our role.

I will briefly look in detail at a couple of the reports. On infrastructure for electric-charging vehicles, DG MOVE in the Commission was our main auditee and we looked at projects in Germany, Italy, the Netherlands, Portugal, Slovakia and Spain. We concluded there were obstacles, including uneven charging station distribution, which is a problem across the EU as a whole. There is no EU-wide minimum infrastructure requirements. The lack of a strategic roadmap on this is something that is highlighted regularly.

Many of the initiatives are well intentioned but there does not seem to be a strategic roadmap which knits all these together.

Regarding funding, we say that the Connecting Europe Facility is not effectively targeting those areas with the greatest infrastructure needs. Then there are implementation delays by site selection and incomplete project outputs. We have made a number of recommendations in respect of updating the infrastructure to harmonise the whole thing to make sure people have access or know what they are doing. We need a harmonised approach to billing, for instance, for charging points and real-time information. It is basically about trying to create an environment, which will facilitate people to move more easily to electric cars. As the committee knows, the transport target was to be reduced by 90% by 2050 compared to 1990 and 25% of all greenhouse gases are coming from the transport sector. Of that, 72% is linked to road transport.

We looked to at the climate action plan as regards infrastructure and it already identifies a lot of these issues. It identifies the infrastructure that is needed and stated the fleet electrification will continue. It comes from the biofuels audit we did. There has been a heavy bet on the electric vehicles as the way forward. Biofuels will probably not have such a big role in road transport. We looked at the climate action plan and then the particular electric vehicle plan within that.

We were also trying to see how our findings in this report linked to what the Government is trying to do in its action plan. We can see a clear link between the findings we have, the challenges that are arising in other member states and what the Government has in its action plan which needs to be implemented. As I said, we have not looked at the implementation of the Irish climate action plan but it is already a positive that there is a plan there which addresses most of the findings we have made.

The next thing is biofuels and here again we say the Irish policy lacks stability. We went to four countries where the position of biofuel is more advanced, namely, Germany, France, Romania and Finland. Again, we are talking about the same kind of thing. Some €430 million was spent over the 2014 to 2020 period in research and promotion of biofuels but as there is a lack of certainty for investors, there is a delay in people wanting to invest in the sector. The policy and the legislation keep changing and the feedback we got is that there is no clear roadmap. There is also a question of capacity in terms of availability of biomass to make the biofuels. We have seen, for instance, in aviation, that the target for 2030 was 6% and yet the production at the moment is only roughly one tenth of that. As I say, there are challenges for biofuels particularly in making sure they are sustainable and not competing with food if we are using crops. There is a thing between food and fuel there. We have the biomass availability issue and an import dependence, which again is creating a situation which the whole idea was to try to avoid, that is, not to depending on imports from a third party. There are also issues of fraud regarding used cooking oil and things like that. Then we have the cost because generally it is quite an expensive way of doing things.

To sum up, for 2020, targets were set for 10% in road and rail and 14% in transport overall and the majority of member states missed these targets. Only seven actually matched them. One area in which there is a long way to go is advanced biofuels if we are going away from the crops. They are more sustainable but the 2030 target is to have 5% sourced from this country but at the moment it is only 0.8%. As the committee can see, the intentions are all very good but there an awful lot of challenges in reaching the different targets and this is covered in our conclusions and recommendations.

There is not much point spending much time on this next slide because what we have done is linked and it is the same outcome. We see that the same issues arising in all our audits are relevant for the Irish climate action plan too. We will move on.

Then we come to industrial policy on renewable hydrogen. This got a lot of attention when it was issued a few weeks ago across Europe because it is a very topical issue. We note conclusions and recommendations here but I will give a simple overview of our findings. For 2021 and 2027, the amount of money which will be invested here will be approximately €19 billion and 72% will come from the recovery and resilience facility. Very ambitious targets were set of 10 million tonnes of production and 10 million tonnes by imports. Regarding production, they now think they will be lucky to make 2.7 million tonnes by 2030 and there is no import strategy yet. There are problems here in respect of advancing hydrogen. Something we talked about earlier informally outside is this whole issue of making sure that on the one hand we want to make renewable hydrogen but we need renewable electricity to provide that. There is a challenge there in meeting the consumption demand of normal consumers and also, for instance, allowing people be on the grid 24-7. Another issue here is that hydrogen is very concentrated so far in the member states with a high share of hard-to-decarbonise industry. That is why they are in the sample. I refer to Germany, Spain, France and the Netherlands. What we said in the end is that there are three main issues that need to be addressed. These will be relevant for all member states and are: how to calibrate market incentives for renewable hydrogen production and use; how to prioritise scarce EU funding; and which parts of the value chain to focus on. This is very important. It relates to which industries the EU wants to keep and at what price. This is what we were talking about earlier about this constant challenge between industrial and green policy. Hydrogen so far accounted for less than 2% in 2022. It really has a long way to go.

We will move on. If we look at the intentions to collect national funding data, evaluate funding structures, establish an early innovation fund, develop a roadmap and review the hydrogen value chain - to which I just referred - all the elements are in the different plans. Now the proof will be in the pudding in how they are actually implemented.

The next thing is road safety, which is a slightly different area. We presented this report at a conference on road safety in Dublin Castle some time ago. Obviously, there is a huge issue in terms of the value of life. We have an objective to reduce road deaths to zero by 2050 and to halve them by 2030. Ireland has been quite successful in reducing deaths. Success is relative. There is still too many. This year, the indicative figures are that the numbers are on the way back up again so this is an issue on which an eye will have to be kept. There is some money that goes into this area. We looked at, not surprisingly, countries which have had high death rates. The death rate goes from the lowest in Sweden to the highest in Romania, where it is very high. We looked at Spain, Lithuania, Romania and Slovakia. As I said, Sweden was the lowest with 26 per million of inhabitants whereas for Romania the figure was 86. Ireland started at about 47 and we are down to 31 for 2022. I think it is going back up to about 37 for 2023.

While European roads are safe compared to many other regions, there are still too many people dying at more than 20,000 per year. The ambitious road safety goals are unlikely to be met and there are stark differences between member states. There is also an issue with how countries classify and report injuries, which can have a significant impact on the figures. Apparently, the criteria for being classified and reported as injured vary across the member states. In future, projects should place more of an emphasis on road safety as part of the selection criteria. This will be more problematic, though, as it appears that cohesion policy funding may decrease.

Where stronger financial supports for road safety and EU targets in promoting safe road use are concerned, we want Ireland to go from 144 to 72 by 2030. Ireland had the third lowest number of fatalities. It also had the fourth youngest car fleet, which is a help. However, it had the second highest jump in the 2022-23 period, with 2023 being the worst year in nearly a decade. We set interim targets for 2024 to reduce road deaths by 15% from 144 to 122 or lower, but as of August, we had already reported 120, so it is unlikely that the interim target will be met, unfortunately.

Climate is such a broad area and there are so many different regulations and acronyms that it is a complicated area to follow. The positives are shown on the left of the slide on display. There has been a decrease in emissions from electricity and greenhouse gases since 2022. On the other hand, Ireland s not on track to meet the target of a 51% reduction and the first two carbon budgets will not be met. The target of a 42% reduction by 2030 under the effort sharing regulation will not be met either. Ireland has the highest agricultural emission contribution. We also exceeded the effort sharing regulation’s emissions annual limit for 2023. These figures are coming directly from the Environmental Protection Agency. There are some positives, but there is still a long way to go, given what is shown on the right-hand side.

The next slide essentially shows what we have discussed. The only additional information has to do with the rate of circular material usage being on track to double by 2030 since 2020.

We need to promote our reports, as many people are not aware of the various reports that we produce and some of them could be useful to this or other Oireachtas committees. Our special report on organic farming was published two days ago. The CAP strategic plans, in which Ireland is a sample member state, will be next week. We will have reports on climate adaptation, urban pollution, sea water quality and forest wildfires. All of these are interesting topics and I hope the committee gets the opportunity to read the reports in the near future.

Looking forward, this is all about commitment. We do not want fatigue if we are to ensure that commitment levels are maintained. This will require a co-ordinated effort between member states and the EU. As the committee can imagine, the EU is facing a significant funding challenge, as other priorities have emerged since the last MFF: Ukraine; enlargement; and security and defence. These are all competing for the same funds unless member states are willing to increase their annual contributions, which I am unsure is the case at the moment. It would be difficult. There is also the option of borrowing, which happened with the RRF for the first time, but many member states, including Germany, believe that is not the way to go. From where will the money to pay for all of this come?

We are now working on our strategy and annual work programme for 2025 and beyond. Climate-related targets and issues will remain some of our key focuses in that period. Our annual report, which is more concerned with financial matters, will have a focus on climate action, primarily relating to CAP, and will be published on 10 October.

This meeting was an opportunity for us to showcase what we do. We are always willing to present on specific reports in more detail. We have invited Oireachtas committees previously and they have visited us in Luxembourg. This committee is more than welcome to do so and the people who carried out the work and know all of the technical background to them will present on the reports in detail.

I thank the Co-Chairs. I hope I did not go on for too long. The presentation was detailed, but this was our first opportunity to engage with the committee.

Alan Farrell (Dublin Fingal, Fine Gael)
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I thank Mr. Murphy. That was an informative briefing. I get the distinct impression that committee members could have listened to it for quite a bit longer.

As this is a joint sitting of two committees, it is appropriate for me to ask Deputy Leddin, Chairman of the Joint Committee on Environment and Climate Action, to say a few words first. We will then take other speakers.

Brian Leddin (Limerick City, Green Party)
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I congratulate Deputy Farrell on his elevation to Chair of the transport committee. He has been a dedicated member of my committee, so he will bring that experience and expertise to his committee. I wish him well in the role.

I welcome our guests from the European Court of Auditors. I am taken by Mr. Murphy’s presentation. It was high-level, but there is so much that we need to consider that even the high-level stuff is profoundly interesting. I have not dug into all of the reports Mr. Murphy referenced, but I will do so because they go into the detail of the major challenges we are trying to resolve. We are in an exciting time. We are in a reform phase, not only in the national context, but in the European and global contexts as well, as we grapple with the challenge of climate change in particular. The court’s work is critical in helping us to understand how we are doing, what else we need to do and how we need to change in order for Ireland and the rest of Europe to get on track.

I will not say anything further, but I will contribute later with some particular questions. I just wanted to welcome the witnesses and thank Mr. Murphy for his presentation. I look forward to the discussion.

Alan Farrell (Dublin Fingal, Fine Gael)
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I call Deputy Bruton, followed by Deputy O’Rourke.

Mr. Tony Murphy:

A lot of the reaction has related to the fact there was so great a dependence in Europe, rather than in Ireland specifically, on Russia. We look at the pan-European situation. We are auditors and we just say it as we see it. We highlight the risks. We hope it will help feed into the debate, and while we may be seen as overly critical or unrealistic, as the Deputy suggested, I do not think that is the case. If the Commission sets a target and says it will achieve something by a certain date, all we do is present the situation as it is now and advise that we do not see how it will get there. It can then adapt the targets, which is probably more difficult politically, or it may have to change its approach or action plans. We do not give any additional emphasis to checking expenditure because it is green, but if the Commission tells us it is spending 20% of the EU budget on green-related actions and we find it has not, it is fair game that we would report that. We are auditors at the end of the day and we follow legal and compliance rules.

On the strategy, I fully agree but I think that in the new Commission there will be a greater focus on crisis management, for instance, or crisis preparedness, if we can call it that, so it will have to build in this flexibility to be able to adjust, whether that is to hydrogen or biofuels. We are saying that, based on the current situation in biofuels or even in electric vehicles, we are again creating a dependence on third parties, even if it is a different third party. It relates to, for instance, cars coming from China, raw materials for batteries coming from the Congo or whatever it might be. The big phrase in the Commission at the moment is "strategic autonomy" and the EU wants to be strategically autonomous.

Again, these are very good intentions, but how are we going to do that? We see the conflict between all these initiatives, on the one hand, and the impact on industrial policy, agricultural policy or whatever it might be, on the other. It is a balancing act but we are not the policymakers, thankfully, as I said earlier. I would not like to try to legislate in this area. It is very complicated and I am not saying it is easy. We are just looking at what has been said or promised and we are asking how we are doing relative to that. That is the best we can do.

Mr. Tony Murphy:

To be fair, it is good to have ambitions. Let us be clear on that. There are other areas where the targets that have been set have been surpassed at the time when they are being set, and there is no added value there either. I am not saying the targets are unrealistic but they are ambitious. It is not a criticism of the target setting; rather, it is saying the Commission may not make the target and may have to revise it internally or reflect on how it wants to get there. I am not saying we will ever get there. Getting to zero emissions is kind of the Holy Grail, but as for whether it will ever happen, we will see. As I said, we are not politicians. We just report on what has been promised. If the Commission says it will do something and outlines how it will do it, we just look at whether it is delivering. Again, from the EU project perspective, it is very bad to create unrealistic expectations. That can only set ourselves up to be criticised in the long run because people will say it did not work.

Darren O'Rourke (Meath East, Sinn Fein)
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I wish the Chairman well in his new role. I thank Mr. Murphy for his presentation. It is a very interesting area and I look forward to getting into the court's reports. There is a great deal there, I expect, that will be useful for us and potentially beneficial from the Irish perspective in terms of what we can learn from others.

To take a similar line of inquiry to Deputy Bruton, on the understanding we are in an area of uncertainty with emerging technologies and so on, one of the earlier slides related to the EU budget for climate action funding and the court's assessment that it has been significantly overestimated. Mr. Murphy made a point about the green credentials of some of the investment. In one case, it was claimed to be 100% but he said it was 0%. Will he talk us through that process?

Related is the issue of certification, which is in the realms of greenwashing. We are familiar with debates that have occurred at a European level regarding the taxonomy of fuels and so on but also advertising, greenwashing and the certification of biofuels. These are new processes, systems and technologies. Will Mr. Murphy talk us through the court's approach in that regard and what he thinks the headline recommendations from some of its reports are for how we can get a better handle on what is green?

Mr. Tony Murphy:

There is a taxonomy, as the Deputy will be aware, that is already in place and, again, we do not set the taxonomy rules. They are in place and we just see how they are implemented. There are two aspects, one of which is the normal budget, where we said there was an overestimation whereby it was supposed to be €260 million but it was overstated by €78 million, or whatever the figure was.

Probably more worrying is the recovery and resilience facility, RRF, which is basically the flagship programme of the new European Commission. It is extremely complicated and difficult, so I do not want to go into the details of it, but there is a risk for the EU now because some of these funds are green bonds. There is now an obligation, therefore, to the market as well. People are investing with the idea that their investments will be really invested in green. In Ireland's RRF plan, about 42% of expenditure will be green, including for the electrification of the Cork railway and a few other measures to improve efficiency in public buildings and so on.

The problem with the RRF, however, although I do not want to get into it because it is a completely different ballgame, is that the plans were based on estimated costs and member states then just tagged expenditure items as green. That was then taken as green expenditure whether the expenditure in the end was half of that or not. Again, we are looking at the RRF as a delivery instrument, and it is really complicated and I do not want to cloud the issue. My point is it is very important for us to check this level of green expenditure on green bonds.

The case the Deputy mentioned regarding the 100% involved an IT system that had been put in to manage a hydroelectric plant or something, but it had no greening impact at all and maybe had the opposite effect. In another case, there was a power plant where no account was taken of the environmental impact of taking it in.

We do a sample. We cannot do every single transaction. What we are saying basically is, based on the sample we did, we reckon there is an overestimation of that amount.

Darren O'Rourke (Meath East, Sinn Fein)
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Mr. Murphy answered my next question, which was whether the ECA was covering everything. Of course, it is not and it could not. Is there a case there? My sense is that if it is represented in Mr. Murphy's sample, it is probably represented in the rest of the cohort as well. Does that immediately suggest there should be greater scrutiny, oversight and accountability on this stuff? Obviously, it is important to get it right.

Mr. Tony Murphy:

As I said at the start, our mandate is limited to the EU funds. The Office of the Comptroller and Auditor General is responsible for the audit of national funds here. That would be within its remit. We only have a mandate to follow the EU funds, and that is all we can comment on. As the Deputy quite rightly said, a lot of these projects are mixed. They will be funded by national funds and EU funds.

Darren O'Rourke (Meath East, Sinn Fein)
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It is not Mr. Murphy's gig, so to speak, but with regard to the issue of certification and taxonomies, is the ECA working with it?

Mr. Tony Murphy:

No, we have to keep a distance because we cannot be involved in the legislative process, or else we cannot audit it. We are completely outside of that. For instance, in some cases we are asked for an opinion when legislation is being drafted, but it is just an opinion. They can take it on board or not. For instance, when it was setting up the Ukraine facility, it would have asked us if we had any comments on that. When it was setting up the RRF itself, it asked us if we had any comments on it. It is a requirement that it has to ask us for an opinion but it is not bound by anything we say. It can take it or leave it. We are not involved. We look for-----

Darren O'Rourke (Meath East, Sinn Fein)
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The ECA would employ it in its audits, I presume-----

Mr. Tony Murphy:

For instance, on the certification process for biofuels, we would have looked at that before and how the process is working. We look at the process per se but we do not develop the process. If we see issues where we think the process could be improved, then we can make those recommendations going forward.

Cathal Crowe (Clare, Fianna Fail)
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I know the new Chair of our transport committee has left the room but I congratulate him and wish him the very best in his new role.

I thank Mr. Murphy, Ms Davis and Mr. Borsos for their engagement. It is very much appreciated. I have a few short questions. The witnesses' report is very comprehensive. Like previous questioners, I try to ask questions within the witnesses' remit because it is quite a broad remit. They cannot possibly be touching everything.

I want to home in on hydrogen, if that is okay. The ECA report calls for greater co-ordination and central planning regarding the development of conditions to encourage Europe's hydrogen and low-carbon industry. It is recommended to avoid the development of new strategic dependencies. Will the witnesses elaborate a little bit on this, please?

Mr. Tony Murphy:

This is what we were talking about for biofuels as well. We do not want to be relying on outside the EU again and just replacing Russia with somebody else. Hydrogen can be from biomass as well. If it is coming from outside, we are depending on that source. There is too much demand at the moment from different sectors for any biomass that is available.

For us, how we are looking at this, as Deputy Bruton said earlier, and whether there is a strategy in place is how we are moving forward with the reduction on the import of hydrogen. If we are going to import hydrogen again, we are going to be dependent on somebody for delivery of that. We do not have any import strategy yet for hydrogen. We cannot really say anything on that yet because it has not been developed.

Cathal Crowe (Clare, Fianna Fail)
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As an extension to that, has there been any great work done across the European bloc on an ammonia strategy? I know it has been spoken about at various times in the Commission. It comes up occasionally in the Parliament. We have discussed it in the Dáil on various occasions. We seem to be leading out the way in hydrogen but there seems to be less dialogue on ammonia. Has there been any scrutiny of that? If I understand correctly - I only did chemistry for a short while in secondary school before I gave it up - it is a totally carbonless fuel and it is probably where we need to get to beyond hydrogen.

Mr. Tony Murphy:

It has not come up on our radar. What draws our attention to issues, generally, is that there is EU funding involved. That is the starting point for us, so I do not know. I have not come across ammonia as a big topic, let us say. I am not saying it is not out there in the private sector, for instance. It could be, I do not know, but with regard to the EU budget, we have not come across it as attracting a substantial amount of EU funding. It would not come on our radar unless and until that happens.

Cathal Crowe (Clare, Fianna Fail)
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My final question relates to climate adaptation. We saw the recent devastating flooding in central Europe. My question is primarily about continental Europe but I have a domestic angle to it as well. The ECA scrutinises the finances of this and the leadership of the strategies. Where larger rivers in particular in Europe curl and meander their way through several countries, is enough being done at a co-ordinated, pan-European level for some of those rivers? One of the reasons I ask is we met the Dutch ambassador to Dublin here informally last year. I asked how they were able to have their watercourses pretty well dredged and yet be compliant with all European environmental laws. Whenever we try to dredge a river in Ireland, we are told there are special protection areas, wildlife and everything. I asked the Dutch ambassador how it was they are able to do it. We all come under the same mothership of Europe's environmental laws, so how are they able to do it? His explanation, and I hope I am doing him justice, was that on a river, the northern bank could be a protected habitat but the southern bank might not be, so they dredge from the southern side and habitats should continue on one side and not on the other. I thought it was a very innovative approach from a country that has known its fair share of flooding.

Beyond looking at the financing of solutions and mitigating measures, has the ECA looked at how things are co-ordinated overall? That seems like a very smart approach but I do not think the smart approach is that applicable in other European countries, including our own at times. That could be a question beyond Mr. Murphy's remit.

Mr. Tony Murphy:

No, to be fair, it is a question we often ask. We would say, generally, that there is not enough cross-border co-operation, let us say. For instance, we have the TEM network and things like that, so there are certain infrastructures where there is a sort of sum approach. I remember years ago we were doing something on inland waterways and it was crazy because someone might dredge a river so that a boat up to a certain height could pass, and then the next bridge might not allow it and the next bridge might. Again, there was this lack of co-ordination and co-operation.

I refer to a simple thing like last year - I do not know if the Deputy remembers - when the REPowerEU chapter was added to the RRF plan. It was supposed to be about energy. We made the point at the time that it sounded like a lot of money. I think it was €20 billion or something like that but we asked what the value would be in splitting that across all the member states so everyone got a little piece rather than concentrating on a few major projects that would have a common added value. There is definitely a lack, generally, in those cross-border interactions between member states. They are very limited. There are areas where it happens but it is quite limited.

Cathal Crowe (Clare, Fianna Fail)
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I know the ECA has contingency work on reports and there is a huge bloc of countries it has to engage with. However, I would love to see that put in writing or codified at some point. When the Dutch do it, it is good. They deepen the water channel and more boats and vessels can get down but they also increase the speed of water then going down the Rhine. Germany does not have the same approach to it but the Dutch model, in my opinion and if I understood the ambassador correctly, looks fantastic. You can have habitats, industry and the needs of a flowing watercourse all co-existing.

Our approach in Ireland seems to be that we cannot because it is protected. The whole Shannon is protected so you cannot dredge it. The last time the Shannon was dredged was under British rule. There were Black and Tan trucks going down the roads of Ireland. We have not done anything of significance since. We have only cleared up the watercourse, we have never dredged it, and it should be no wonder that the Shannon floods every single year. There was a time when they would deepen the watercourse and everything they pulled out from the silt bed would be banked up on either side, so you would gain a metre in depth and a metre in bank height. That is the sensible approach. I would love to see a more co-ordinated approach. I refer to the Rhine and if it bursts its banks.

This concerns all of Europe. It probably does not matter too much on the domestic front. Surely a pan-European approach to this issue would help.

Brian Leddin (Limerick City, Green Party)
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I might give an alternative perspective on dredging. Another approach to flood management is the catchment approach, whereby the land is managed in a different way upriver so there is no run-off into the river and the fast-flowing deeper channel to get the water out is not needed. In essence, the upriver catchment holds the water. The Dutch are very good at that and we certainly can learn from them.

I have a few questions for Mr. Murphy. There was a very interesting discussion during his response to Deputy Bruton on targets and adjusting targets or policies. He referenced Ireland and mentioned we are on course for a 29% reduction in emissions by 2030, based on 2018 levels. My view is that in itself is quite phenomenal because it is a short timeframe. The European trajectory is from 1990 to 2030, as opposed to 2018 to 2030. Having said that, it is not the 51% that we have set ourselves as a target. It is an incredibly ambitious target and we are learning how difficult it is to achieve it. It is still appropriate that we have the ambitious target. We are becoming more innovative. The system is evolving and morphing to meet that very significant challenge. The EPA would acknowledge that the 29% is pretty much where Ireland is going but there is an uncertainty piece that might take us much closer to the 51% if things go our way. This Oireachtas passed the climate legislation by a bigger margin than any legislation that ever went through and it is very positive that Ireland, politically, is very bought-in to the need for climate action. One of the really innovative pieces is the climate action plan, which can be revised annually. It is very much about changing the policies and adjusting. We regularly invite Ministers to appear at our Oireachtas Joint Committee on Environment and Climate Action and hold them to account for the success or failure of their programmes. We are starting to see that work. No Minister wants to be brought before a committee to explain why he or she could not succeed. We will see in the years ahead if the mechanism that is in the climate plan, this iterative approach, gets us to the 51% target by 2030, notwithstanding how difficult it is to achieve.

One area Mr. Murphy touched on, and I would not suggest this will do much of the heavy lifting in terms of emissions but it is relevant to a lot of his areas of interest, is the active travel piece and moving from a car-oriented or car-dominated transport system, which a lot of countries and cities have, to one that is less so. A lot of the commentary on transport and solutions in transport is on electric vehicles. They have a very important role to play but in urban environments in particular, where journeys are quite short, we should be able to transition a lot of those journeys over to walking, cycling and public transport. Of course, there is the co-benefit of improving localised and other pollution, notwithstanding displacing carbon emissions.

There is the challenge of safety as well. Road safety is a big part of Mr. Murphy's remit and he has produced a report on that area. More people are moving into the active travel modes of walking and cycling but until there is a critical mass of them the road safety issue is more pertinent because in a lot of instances people will be travelling on roads that do not have infrastructure. It is not just true in Ireland. Right across Europe there is a general move towards promoting active travel and building infrastructure but we cannot do it overnight. We can see really good progress in this country and in other countries as well. My view is that the potential of active travel to displace transport-related carbon emissions is probably underestimated and, as a result, there is less of an impetus and urgency to develop this infrastructure. Is this something the European Court of Auditors has looked at in any great detail? I know the OECD did an excellent report relating to Ireland's challenge. It was published approximately two years ago. The report stated Ireland will not meet its climate reduction targets if we to stick with the car-based system. We really have to move away from that and go for public transport and active travel as much as possible. Does Mr. Murphy have much to say on that area?

Mr. Tony Murphy:

As I said at the start, climate is a big proportion - approximately 30% - of the work of the European Court of Auditors. As we have quite limited resources, however, the number of topics we can do in a year is 11. We have to choose between the different topics. For instance, a report on urban pollution will be published in December 2024. We published a report on smart cities a while ago. An area of work that is just starting and on which a report will probably be published next year is suburban passenger transport around major metropolitan areas. We look at these types of issues from different aspects.

Brian Leddin (Limerick City, Green Party)
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That is very good. As I stated earlier, I am really looking forward to reading the reports. They are meat and drink to the members of the Joint Committee on Environment and Climate Action. The reports will really assist the committee. We will see how much time there is left in this Dáil term but it looks as if the work of the European Court of Auditors will be really important for us. Does Deputy Farrell want to come in?

Alan Farrell (Dublin Fingal, Fine Gael)
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I thank the Deputy for stepping into the Chair for a few minutes. As Deputy Leddin rightly pointed out there is a lot of reading for us as committee members of to go through but the reports are extremely helpful and the engagement has been both welcome and really informative from that perspective.

My first question relates to the charging infrastructure for EVs. During the slideshow presentation Mr. Murphy mentioned there was uniform deficiency in infrastructure across the bloc. Ireland has its own targets and Deputies Leddin and Bruton mentioned the role of local authorities in delivering public infrastructure through the public purse. Are there any findings or advice in the European Court of Auditors report on this sort of roll-out? Is there an exemplar within the European Union to which Mr. Murphy could point and say that country is doing a good job of rolling it out?

On a related subject we were chatting about before the meeting, that is, battery sizes, car sizes and the development end evolution of car sizes, will the European Court of Auditors will be looking at this at some point in the future? We as a Continent, and perhaps as a globe, need to have a conversation about the enlargement of vehicles. I am not sure if Mr. Murphy is on social media much but I have often come across pictures of 1970s cars and their current versions, which are twice the size, on social media. I do not think people have become twice the size since the 1970s. We have these consumer-demanded vehicles and that demand almost certainly emanates from the United States. Can there be a report or perhaps a catalyst to move us away from that? Does Mr. Murphy have any suggestions as to how we might achieve that?

Mr. Tony Murphy:

I will start with the second one first, the size of the cars. Regarding the regulation of the industry, the Commission sets the directives and the legal background. We are not involved in that. We are obviously involved in how that is implemented; that is the starting point. In a report on reducing CO₂ emissions, we specifically raised the issue of negation. This positive development had a negative impact because car sizes and speed, etc., were actually increasing. We have raised the issue. We go to the European Parliament and we hope that the transport committee in the European Parliament will pick it up and try to stop it in future.

I found it bizarre that on CO₂ emissions, the in-lab tests and the reality were completely different for many manufacturers. What is certified is not actually the reality. Conformity in this regard should be really tightly regulated and that will improve. We raise issues where we see them but ultimately, we just feed into the legislative and policymaking process. It is up to others to decide if they want to address a specific issue like that.

It is similar for the infrastructure. If it is at the level of local government here, that is probably totally funded from the national public purse. We have no mandate there; we do not even look at it. In many areas we are only scratching the surface. People have the idea that the EU budget is huge. It is about €200 billion a year, that is all. Maybe 40% of it goes to cohesion with maybe another 30% or 35% to agriculture. There is not much left after that for different policy areas like external aid, research and development or whatever it is.

We often have this request from the European Parliament, more so on the financial side in compliance audits, as to who is best in class and who is worst in class. They would like us to give a league table of member states. We say that we our auditing the EU budget; we are not auditing a member state per se. We are looking at how a member state is implementing, for instance, a regulation or a directive. We do not get into the level of detail for that. We have hearsay, obviously, that certain member states are doing certain things in a good way. There might be a reason for us selecting a member state in our sample so that if we think it is a good pupil we can highlight that in the report. That is the way we would take it on board.

For years, Ireland was always being voted as a good pupil by other EU member states because of its high absorption rate and things like that. It works a bit like that if a member state has a good reputation or is well known to be advanced in the particular area. It would be one of the criteria to take in when we sample our four or five member states. We would try to pick one that is fairly advanced or innovative so we can share the message around with the other 26.

Alan Farrell (Dublin Fingal, Fine Gael)
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I thank Mr. Murphy for that and for his appearance; it has been really interesting.

Brian Leddin (Limerick City, Green Party)
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On Mr. Murphy's last point about the countries that the European Court of Auditors audits, does the court take a sample every year or is it every few years?

Mr. Tony Murphy:

Every report has a different sample. There are different criteria for a sample. One criterion would obviously be the amount of EU funds feeding into the member state for that particular policy area, programme or whatever it is. On other things, we try to have a geographical balance, for example, between the south and the north or east and west. There would be other criteria as I said, such as being well known for being advanced or the opposite - that we know there are issues there. It is a scoreboard that we create and then we decide on which four or five we will go to.

Brian Leddin (Limerick City, Green Party)
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I am wondering when Ireland will come under the spotlight.

Mr. Tony Murphy:

Next week, Ireland is in the sample for the CAP strategic plan, which is climate related. It comes up from time to time, more so on the agricultural side than anywhere else because-----

Brian Leddin (Limerick City, Green Party)
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It is challenged.

Mr. Tony Murphy:

-----I think 65%, 70%, or 75% of the EU funding that we get goes into the agricultural sector.

Brian Leddin (Limerick City, Green Party)
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Do the 27 member states decide what the sample will be or who decides?

Mr. Tony Murphy:

No, we decide. We have auditors who will prepare a task plan and they will have done some research. We will come up with a table outlining the criteria on which we want to select a sample and the countries we want to visit. That is then okayed by the chamber if it believes it is a reasonable approach. It is completely independent of the member states; the member states have no role at all.

Brian Leddin (Limerick City, Green Party)
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I will try to influence it if I can. Because we are doing such interesting work in the area of energy and transport in this country, perhaps the next time that the European Court of Auditors is doing a report it might look to Ireland. Mr. Murphy mentioned agriculture but the reform agenda is certainly in those particular areas also. I would be very interested to see how well we are doing with respect to transport, particularly given the level of investment the Government has put into transport in recent years with a view to reducing emissions. We have not quite seen the reductions in emissions yet and the projections are not as great as we would like them to be. Perhaps that is something the ECA could look at when it does.

Mr. Tony Murphy:

One we issued a few weeks ago was on climate targets and basically Ireland was one of the sample member states there. So we can recommend that one. On some of them it is quite obvious and the member states almost pick themselves. Even on the financial side, we do not visit Ireland that often for transactions. Not on the special reports but when we are looking at the financial side, we follow the money in the member state and maybe to the final beneficiary. Because proportionately the Irish funding is quite low, it does not come up in the sampling.

Brian Leddin (Limerick City, Green Party)
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As no other members are indicating to ask questions, I will close the meeting. I thank Mr. Murphy, Ms Davis and Mr. Borsos for their attendance this afternoon for what I think was a very engaging discussion on very important topics for our country and for the European Union as well.

Mr. Tony Murphy:

Again I offer my thanks. For us it is very important that people are aware of these reports. As the Comhchathaoirleach said, many people are not aware that we produce these reports. We are engaging with the policy advisers to committees to try to create an awareness. I do not know how they distribute our reports in house. For instance, in the European Parliament all the MEPs systematically get all our reports. We try to tailor that because, for instance, there are some they are not interested in. For the Irish MEPs we always send ones we think they would be particularly interested in. We are working with the clerks here to see how we could have a better system here for at least making sure that the reports are distributed. Members may read them if they like but they should at least be aware that they are there.

Brian Leddin (Limerick City, Green Party)
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I am sure Deputy Farrell will agree that we can certainly discuss that with the secretariats of both committees with a view to disseminating those reports in a way that they reach the desks of colleagues across the Houses. From my point of view, the areas the ECA is looking at are hugely important. I am looking forward to reading the reports Mr. Murphy has referenced in the next few days. They will be very informative for me and I have no doubt they will also be for colleagues as well.