Firms and jobs will be lost without help on energy costs, Ibec says

Businesses require urgent financial assistance to deal with soaring energy costs, according to business group Ibec, which has warned that significant numbers of jobs are now at risk. In a letter to the Taoiseach, Ibec has also called for a range of measures to improve energy security and accelerate the rollout of renewable power in the years ahead.

“Firms and jobs will be lost if Government doesn’t do more to address this energy crisis,” Ibec chief executive Danny McCoy warns in the letter, with some businesses facing increases in energy costs which are multiples of the same time in 2021. “This will put major pressure on companies’ ability to maintain profitability, with knock-on implications for investment and jobs.”

Ibec has called for “immediate direct fiscal interventions” to help ease the burden of higher costs and for the Government to work with the rest of the European Union on an emergency framework to assist businesses. Companies spent €3 billion last year on gas and electricity bills and a further €1 billion on transport fuels, according to the letter and energy intensive sectors are particularly at risk.

For many the problem will intensify in the weeks ahead as current hedging arrangements end.

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EU state-aid rules

The form in which support could be directed to businesses is likely to be dictated by EU discussions, which will determine how and in what form emergency aid can be granted. The European Commission has been working on mechanisms which will allow aid to be directed by giving temporary leeway under state-aid rules. Additional revenue may come from higher VAT to national exchequers as the price of fuel rises and from payments from business under the ETS system, in which they are levied when they use polluting fuels through an allowances system.

The Ibec letter to Taoiseach Micheál Martin and senior Ministers also proposes new measures to secure energy supplies. "While gas supply is secure in the short term, Ireland needs to prepare for winter 2022/23 and beyond," according to McCoy.

Ibec has called for a new framework to allow for the development of new emergency gas storage in Ireland, including back-up LNG options. It has also called for the Government energy security review now being undertaken to be advanced and for the bringing forward of plans for the development of an integrated hydrogen strategy, as well as the scaling up of supports for energy efficiency in business and speeding up the timeline for the national retrofit programme.

The letter also calls for longer-term measures to accelerate the rollout of renewable projects. Renewable energy and network infrastructure projects need to be given public-interest priority status in the planning system, it says and the Government needs to “work with EU partners to use CAP funding to support biogas production in rural areas and promote opportunities in the biogas sector”.

Ibec is also calling for greater resources to be allocated to the departments and State agencies involved in the planning and licensing of energy projects including An Bord Pleanála and the Department of Environment, Climate and Communications.

It also wants Government to develop clear guidelines on the use of solar power systems and to help business to invest in on-site generation.