Paul Murphy Challenges Enterprise Export Strategy Over Emissions

Thanks a lot Chair and thanks for the presentations. Questions mostly to Mr Clancy. Ambition 4 in the opening statement and also in the EI strategy is Irish enterprises leading globally on sustainability and achieving climate action targets, which is mainly measured in terms of the climate action plan target of 29% to 41% reduction in emissions from the enterprise sector. How does that tally with and does it not contradict to some degree the big emphasis on increasing exports? I mean, goods exports are transported around the world by fossil fuels. The WTO says something like 20 to 30% of total carbon dioxide emissions are associated with international trade and more than 7% of greenhouse gas emissions come from international freight transport. So if you increase your goods exports, it seems very difficult to achieve reductions in carbon emissions. Sorry, Mr Clancy. Apologies, Deputy. Thank you. Thank you for the question. No, I think a couple of elements to that. I suppose the first thing to say is that we have an Irish enterprise sector that is, I think, more manufacturing based than services based at the moment. I do see that changing in the coming years. I do see that changing in the coming years. And I mentioned Wayfly or FlipTish and a number of other of our new unicorns. And I strongly believe that a lot of our exports in the future will be digital and will be services based. And that certainly a lot of the growth will be in that space. That said, we do anticipate continued growth in the manufacturing sector. And I think all of the things that you've said are hugely relevant. I think if you look at this strategically, a lot of the goods that are shipped to any country in the world come from a very far distance away, China being one of the very large producers at the moment. If you look at where we are focusing on exporting to, we're seeing lots of growth in Northern Europe. We're seeing growth across the Eurozone. Those will continue to be key growth locations and their locations that our exports to them may actually compete with exports from even further away. So I think in that context, Ireland will still be a greener choice for exports from those locations. And I think coupled with that, we are, and increasingly with the Climate Action Plan, we are a high quality jurisdiction in terms of our adherence to laws and regulations and traceability of carbon in particular in this case. And I think that will stand to us in terms of how Ireland can stand up and make the case that we certainly have an industry that's greener. And I know many of our clients are thinking about their supply chains in terms of scope one, scope two, and scope three emissions. I think we can, and are looking at plans both for offsets and reductions in carbon. So I think it's a fair question, but I'd say you have to look at the global context in order to answer it fully, Deputy, and then also have to look at the services and digital opportunities. that are before us, which I think are going to grow very significantly. Thanks a lot. I mean, we just, transporting goods at the moment, uses a lot of fossil fuels, and it is one of the most difficult sectors to decarbonize. That's according to the OECD's International Transport Forum. They predict that trade-related freight transport emissions will rise fourfold by 2050, which, again, goes contrary to the whole world's goal. And I see what you're saying about, oh, well, we're going to replace, you know, it's going to be people in Northern Europe will be buying things from Ireland instead of buying them from China, and therefore overall will reduce. But I don't think that China is similarly planning for that, though the whole world plans to continue to compete on the basis of exporting more and more stuff. And just, I mean, do you know, what's the breakdown between air freight and sea freight in terms of goods exporting Irish companies? Because there is quite a difference. Air is much more carbon intensive than sea. I don't have the numbers, Deputy, to hand, obviously, but we can certainly take a look and see if we can find any trace of that. What I would say, though, is probably it's much more sea-based. You know, if you look at our export base, predominantly food engineering areas like that, so definitely much more sea-based than air-based in terms of the goods. And to be honest, that's gone to some of the heart of some of the challenges that Irish Enterprise has seen in the past 18 months, in particular with costs of containers and supply chains going up significantly. So it's certainly more sea-based, but I wouldn't have a breakdown of the figures exactly in that regard. Yeah, thanks. I mean, I'm not expecting you to have the figures here, but let me ask the question. Do you have the figures in the office? Are they figures that are collected by Enterprise Ireland? Because surely these things should factor into funding and grant decisions. If you're serious about Ambition 4, surely you should take into account how goods are being exported and whether that's something you want to promote and invest in and so on. Yeah, I'm also not sure that we have the data on sea versus air in our client survey. We do survey our clients in terms of their business costs and their inputs and their exports annually. That survey is going on at the moment. And it's certainly something we can take on board and have a look at. However, what we are looking at, though, is the overall carbon footprint of our clients. And I think that does include all of the emissions that go to the business. So it's certainly something we will be looking at in line with all aspects of the business. But overall, we have a target for carbon reduction for the businesses. So that tends to be where our focus is. As I said, it is more sea-based. I think the air freight necessarily would be limited to small numbers of suppliers with very high value, like goods. And as I said, our economy is more weighted towards food, heavy engineering on the Irish enterprise sector and increasing these services, as I mentioned, also. Thanks. But you are saying when you look at the carbon footprint of companies, you are taking into account the impact of freight, be it sea or air or whatever? I'm not sure whether we do, how far we take that into account. But certainly it's a question that I can look into and come back to the committee. I don't know how far we go. And this does depend. We're at the early stages of measuring our carbon impact for a number of our clients. So you'll see under the climate action plan, we have targets around some of the emitting sectors. So we will certainly be looking at that. I can't commit that we actually do have it in all our schemes at the moment. But it certainly is something we'll be integrating. And we have committed that during Q1 this year, we will have a process of assessing carbon emissions as part of any grant application we make. So we'll certainly take your comment into consideration in regard to that. Thanks. I mean, surely you'd accept it would be bizarre not to include the impact of freight when you're looking at the total environmental impact of a company. If they're set up to export goods, I mean, that is an integral part of it. But our companies will certainly have that because all companies are starting to measure their scope one, two, and three emissions. And it will include the freight as well as the heat that goes into making the product and any of the other ancillary elements. So it certainly is something that makes sense to include. I just can't comment on whether as an agency we specifically have that data at the moment. But I know from talking to all our clients, sustainability is top of mind. And just to say, I mean, sustainability is going to be absolutely vital to our clients and carbon footprint and carbon emissions in terms of how they sell into their supply chains. So what we're seeing is that the market is pulling clients in that direction. So I'm absolutely certain that the data exists. What I can't commit to is just what we have specifically, Deputy, but you make an excellent point and it is something we'll take on board. Thank you very much. Thanks a lot. Can I just ask one kind of overarching question, which is kind of where I'm getting to it. Very, very quickly, Deputy. Do you not see that it would make more sense to focus on promoting consumption and production here, like the look for local scheme, as opposed to this emphasis on exports? Well, I think we're, so overall, we are a small island economy, Deputy. I think it really is important for us to be active in global markets. You know, if you look at some of our peers around the world, I think there is no economy of less than 10 million people that would say anything different. You know, we're part of a trading bloc. We're very fortunate in that. But we are a small economy. And for businesses to grow and thrive and prosper, they need to be export-oriented, I think, from the start, particularly those that are in leading-edge economies. So I think the focus on exports is right and proper. It certainly has led to increased prosperity on the island. I don't think in the context of globalization and all the progress we've made as a global economy over the last 50 years in particular, reverting to a hyper-localized economy would serve as well, and I think it would damage our economy severely if we took that approach. So I am firmly of the view that we continue to be an export-led economy and that that's right and proper. And I think the opportunities for prosperity and the opportunity for the flourishing of all our citizens is strengthened by that. Thanks very much. Thanks, sir. That's what I certainly wanted, perhaps, but it's a firmly held view of mine. Thank you. Thanks, Mr. Clancy. Thanks. And Deputy Murphy.