New policies needed to protect Irish competitiveness and accelerate decarbonation – European research shows

New policies needed to protect Irish competitiveness and accelerate decarbonation - European research shows

July 04, 2024

Business Europe, the group representing enterprises of all sizes in the European Union, supported by Ibec and other European trade associations has today published new international study underlining the economic imperatives for a coordinated and cost-effective transition to net zero. According to the report, even in the case of a managed transition with more supportive EU energy policies, energy prices in Europe would be at least 50% higher than those in the US, China, and India by 2050. The study also identifies additional challenges for Ireland due to its reliance on imported fossil fuels and low levels of interconnection.

The research, conducted by Compass Lexecon on behalf of Business Europe, models two different pathways to achieving a carbon-neutral energy system by 2050. The findings show that without additional support and massive investment in renewable energy and enabling infrastructure, European industry will lose ground to international competitors.

Commenting on the research findings, Ibec's Senior Executive for Energy and Climate Policy, Conor Minogue, said, "The study shows that Europe and Ireland are at a critical juncture in the transition to net zero. While a competitive net zero energy system is achievable, time is of the essence. Delays in the rollout of critical energy infrastructure, including wind energy, interconnection, hydrogen, and biomethane, will result in rising costs and competitiveness challenges for business. A successful transition also depends on a renewed European-wide focus on competitiveness, carbon leakage protection, and cost-effectiveness."

Commenting on the findings for Ireland, he said, "Ireland has an immense opportunity to leverage its offshore potential to build a competitive, world-leading net zero enterprise base and attract new investment in sustainable manufacturing and services. However, without additional support for business and a speedy rollout of new energy infrastructure, Irish industry could face eroded competitiveness and substantially higher energy costs than its international competitors. Budget 2025 is an opportunity to address this challenge head-on by strengthening decarbonization supports and introducing a new competitive Contracts for Difference (CCfD) scheme to drive large-scale emissions reduction in industry."

Ends

Full Business Europe research available here

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