Irish industry could reduce its carbon dioxde emissions by up to 640,000 tonnes per annum without any loss of competitiveness, according to a report published yesterday by Sustainable Energy Ireland (SEI).
Through the use of "negotiated energy agreements", companies would also be able to reduce their exposure to the proposed carbon tax while reducing CO2 emissions at twice the rate achieved by the tax alone.
The report is the result of an 18-month pilot study testing the application of negotiated agreements with industry in Ireland. It involved the active participation of 26 companies, including such major energy users as Aughinish Alumina.
Negotiated agreements are deals between the Government and individual firms or groups of firms aiming to achieve substantial reductions in energy use and greenhouse gas emissions beyond a "business-as-usual" approach.
Such agreements are already in place in a number of EU member states, including Britain, Denmark and the Netherlands. They are based on firms adopting best international practice in energy efficiency.
Industry now accounts for 25 per cent of all energy-related CO2 emissions in Ireland. As a result, there is considerable potential for reducing emissions within the industrial sector by using energy more efficiently.
Prof Frank Convery, chairman of SEI, found the pilot project encouraging because it "shows that when people take this stuff seriously, which they mostly don't, there are real opportunities to reduce emissions in ways that don't cost a fortune."
The key message of the report, he said, was that if companies committed themselves to achieving best international practice in terms of energy efficiency, they would get a substantial exemption from the carbon tax planned by the Government.
According to Prof Convery, who is also director of the Environmental Institute at UCD, negotiated agreements provide "an ideal framework for combining the required price signal while also addressing concerns about competitiveness."
Among the main findings of the pilot study were that significant energy efficiency gains of between 5 per cent and 17 per cent were achievable and the total savings made by participating companies outweighed the costs involved.
Mr David Taylor, chief executive of the SEI, said the study established the viability of negotiated agreements as part of a climate change policy for Ireland, achieving greenhouse gas reductions far beyond those likely to arise from a carbon tax alone.
"It can also protect competitiveness by offering a tax exemption structure for participating firms, especially for energy-intensive firms or firms with large energy costs," he said, adding that 650 sites could ultimately be covered.
Participants in the study included Pfizer Ireland, Novartis, GlaxoSmithkline, Wyeth and Jansen Pharmaceuticals, Cadburys, Aer Rianta, Glanbia, Green Isle Foods, Hewlett-Packard, Smurfit Paper Mills, Unilever and St James's Hospital, Dublin.
Sustainable Energy Ireland is a statutory authority charged with promoting and assisting the development of sustainable energy and is funded by the Government, with EU assistance, under the National Development Plan 2000-2006.
