Budget 2025 should support industrial decarbonisation
Ibec’s BioPharmaChem Ireland has called for measures in Budget 2025 to support capital investments and the delivery of infrastructure, David Keniry writes.
BioPharmaChem Ireland, the Ibec group that represents the biopharmaceutical and chemical sectors, has launched its Budget 2025 submission calling for decisive action by the Government to enhance the competitiveness of the industry in Ireland and support achievement of its sustainability goals.
With over 90 biopharmaceutical and pharmaceutical companies in Ireland, employing over 80,000 people directly and indirectly, the sector in Ireland is thriving. However, to maintain and further develop the sector’s global leadership, sharpen its competitive edge and secure its future, BioPharmaChem Ireland is calling on Government to address the competitiveness challenges facing the industry.
In its Budget 2025 Submission BioPharmaChem Ireland (BPCI) outlined how a key challenge for the industry over the next decade is transitioning to a carbon-neutral society and balancing low carbon goals with reduced energy costs is vital.
The industry association recommends that Budget 2025 should introduce measures like a low carbon super deduction, expand the capital allowance regime, and allocate €400 million for a Carbon Contracts for Difference scheme. To achieve the sector’s sustainability goals, greater financial, regulatory and advisory supports will be needed, the submission adds.
The submission notes that the European climate law targets climate neutrality by 2050, with a 55% reduction in net greenhouse gas emissions by 2030. The CSRD, effective from 2023, requires larger companies to report ESG activities using European Financial Reporting Advisory Group-defined metrics, enhancing transparency and accountability.
BPCI recommends the introduction of a new super deduction capital allowance to drive business investment in environmental and sustainability-related capital investments. The capital allowances should be increased to a super deduction of 130% of capital outlay and significantly simplified to bring forward investment in our low-carbon future. The Government should also modernise the Triple E register for energy-efficient equipment supports.
Widen the scope of the low-carbon ACA capital allowance to reward investment is another key recommendation to reward investments in buildings that have been constructed with energy performance central to the design. This could be based on existing certification schemes already widely used in the construction industry such as Leadership in Energy and Environmental Design (LEED), Building Research Establishment Environmental Assessment Method (BREEAM) and Nearly Zero-Energy Buildings (nZEB) or adaption of existing certification schemes operated by SEAI.
BioPharmaChem Ireland recommends a competitive Carbon Contracts for Difference (CCfD) scheme to help scape up industrial decarbonisation. Such schemes are successfully helping to scale up industrial decarbonisation in both Germany and the Netherlands. In effect, they subsidise companies investing in low-carbon technology to offset the difference between the market price for emission allowances and the carbon avoidance costs to ensure there is no competitive gap between low carbon and conventional technology. In a situation where there is no or a negative gap over time, payments can flow from the company to the state. Their introduction is also in line with the European Commission’s 2022 Guidelines on State Aid for climate, environmental protection and energy.
Another key recommendation by BPCI is to enable the delivery of high-quality infrastructure by adequately resourcing and streamlining the regulatory, planning and consent regime nothing that to support the transition to net zero, industry and society will be increasingly reliant on the delivery of high-quality infrastructure. Adequate resourcing and streamlining of regulatory, planning, local authorities and consent processes will be critical to the efficient and timely delivery of infrastructure.
Address housing supply issues to attract and retain talent is also recommended nothing that extending the development contribution waiver and increase the target to 20,000 social, affordable, and cost-rental units annually by the end of the decade, with a focus on greater delivery of affordable and cost-rental units.
The submission also recommends to complete commitments related to National Development Plan in regard to major infrastructure projects, particularly in the regions, given the scale of biopharma and pharma located across the regions. BPCI adds that a commitment to prioritise the delivery of critical public infrastructure and investment in every region including strategic projects vital for regional connectivity and the achievement of balanced regional development such as the M28, the Galway City Ring Road, and the M20.
Addressing the key pillars outlined in the budget submission, Sinead Keogh, Director of BPCI said:
Ireland’s budgetary recommendations ahead of Budget 2025 focus on leveraging the significant strengths of the BioPharmaChem industry, including a highly skilled workforce, a strong research ecosystem, and Ireland’s manufacturing expertise. However, to keep pace internationally, we need the Government to refocus on sharpening the competitive edge and global leadership of the industry in Ireland. Our Budget 2025 submission provides a clear roadmap to achieving this and focuses on four key pillars: building the talent and skills pipeline, delivering a world-class innovation ecosystem, achieving our sustainability goals, and bolstering competitiveness through infrastructure delivery and a dynamic regulatory environment.
Harnessing renewable energy and measures needed to meet sustainability and regulatory goals featured in a discussion led by Laura Stakelum, Stakelum Consultancy, Barry Walsh, European Energy, Philip Connolly, KPMG, and Barry O’Sullivan, Chair of the Shannon Estuary Economic Taskforce at the BioPharma & Life Sciences Connected Live in Cork earlier this year (pictured).
BioPharma & Life Sciences Connected Live returns to the Radisson Blu Hotel & Spa, Cork on January 23rd 2025, in partnership with BioPharmaChem Ireland. To register click here: https://www.biotransformationevent.com/.
Decarbonisation and meeting the infrastructural needs of industries will also be key topics at the European Infrastructure Conference in Dublin on November 14th, 2024.
