Peat Power

We write seeking your assistance in ensuring that the European Commission does not allow the Irish authorities to use the Public Service Obligation mechanism to give an effective indemnity for the construction of new peat-fired electricity generating plants while the Irish Courts are carrying out a Judicial Review of the decisions to give development consents for these plants without Environmental Impact Assessment of the extraction of peat.



Margot Wallstr??m,
Environment Commissioner,
The European Commission,
Environmental Directorate XI,
Rue de la Loi, 200,
B-1049, Brussels, Belgium
21 June, 2002

Re: Access to Enviornmental Justice in Ireland:
Peat extraction and peat-fired power plants


Dear Ms. Wallstrom;

We write seeking your assistance in ensuring that the European Commission does not allow the Irish authorities to use the Public Service Obligation mechanism to give an effective indemnity for the construction of new peat-fired electricity generating plants while the Irish Courts are carrying out a Judicial Review of the decisions to give development consents for these plants without Environmental Impact Assessment of the extraction of peat.

We base our request upon the principle that decisions by various parts of the EU Commission should both comply with and support compliance with European Environmental law.

On 8 May, 2002, the Irish cabinet, faced with the delay which the nine vacancies in the High Court alone imposes on all legal actions, decided to extend the terms of the Public Service Obligation under which they are to construct these power stations in order that any costs incurred through a successful legal action will not fall on the state-owned Electricity Supply Board who are responsible for constructing these plants.

This decision effectively indemnifies the Government against any costs that would arise from the success of our legal actions. In the words of the Minister who announced this [full text attached]:

"The decision taken today by the Cabinet, which I warmly welcome, means that there is no obstacle to the commencement of construction work on the new Power Stations regardless of the judicial review proceedings recently initiated in relation to planning permission. These proceedings had threatened to seriously delay construction work on the Power Stations."


Public Service Obligation: Background

Ireland has been allowed by the Commission to impose a Public Service Obligation on the Electricity Supply Board to require a cross-subsidy from all electricity consumption (including electricity from renewable sources) to pay for the extra costs involved in the combustion of peat, which is the most greenhouse gas intensive fossil fuel.

Friends of the Irish Environment (FIE) objected to the Competition Directorate against the PSO application. However, that Directorate nonetheless granted the application. In doing so, your colleague Commissioner Loyola de Palacio stated, referring to the UNFCCC and Kyoto Protocol, that "The Commission is not responsible for enforcing international agreements Ireland may have entered into." We attach copies of relevant correspondence.

We are concerned that this decision is in breach of EU law for a number of reasons and have been trying to prepare a complaint to the EU Ombudsman.

However, we have been severely frustrated by obstruction from the Irish authorities in response to our request for information under the Freedom of Access to Information on the Environment Directive. The latest position in this regard is that the Department of Public Enterprise is refusing to release information on the basis that the Electricity Supply Board objects. Records which we began to seek last September still are under consideration Effectively we are being prevented from making any complaint by this withholding of information.


Public Service Obligation: Litigation in the Irish Courts

The Advocat General's Opinion on 17 December, 1998 [C-392/96] made it clear that

"The only relevant point here is the possible impact of peat extraction on the areas in question. It should be borne in mind that, as the Commission points out, peat extraction may provoke irreversible changes in the ecosystem of the bogs. The Commission acknowledges that turf cutting by hand, hallowed in Irish tradition, falls outside the scope of the Directive. It is the commercial exploitation of areas of less than 50 hectares, therefore, which ought to have been taken into consideration and, so far as we can tell, it has not."

The recent Reasoned Opinion of 21 December, 2001 [D/260569, Complaints P2000 4616 & 4777] cited the actual licenses issued by the Environmental Protection Agency for the extraction of peat to be used in the proposed new peat powered electricity supply stations. [Reasoned Opinion, paragraph 2.5] These licenses include License 610 issued by the Agency for the extraction of peat for these stations.

Friends of the Irish Environment are seeking a Judicial Review [Irish High Court 2002 JR 151] of this decision of the Environmental Protection Agency to issue an IPC License for a peat fired power plant (Ref. 610) without subjecting the extraction of peat, which is an intrinsic part of the proposal, to Environmental Impact Assessment.


Not only has the Government indemnified the Electricity Supply Board against any effect of our Judicial Review, but at the same time, the state-owned peat extraction company, Bord na M??na is seeking security for costs against us. In effect, this is an attempt to use a financial impediment in order to prevent us from having our case heard.

We know you are aware, after your visit to Ireland, of the frustration and difficulties that Irish ENGOs face in seeking environmental justice. For a small voluntary network like ours to bring such legal actions is risking all we have achieved and places in jeopardy our survival.

Public Service Obligation: Conclusion
It appears to us that this proposed extension of the PSO is an interference in the course of a member state's judicial process, in that it is an attempt to render our case moot by the construction of the plants before the case can be heard in the Irish Courts.

In addition, we think that the proposed use of a PSO to cover the legal costs of the Electricity Supply's Board attempt to prevent us reaching the courts and the costs accruing to the ESB should the Courts find those expenses to have been illegally incurred, would be outside any legitimate scope for the PSO under either Irish or EU law.

We attach a copy of the Statement issued by the Minister for Foreign Affairs, who represents the constituency in which the plants are to be located, and the clarification issued by the Department at our request. The actual proceedings and minutes of the Cabinet meetings are confidential.

We also attach an extract from the Dail Report of 20 June, 2002 in which the leader of the Irish Green Party sought to have the business of the House suspended to debate the "disregard of the judicial process" represented by the Government's decision of 8 May, 2002. Such a debate was refused.

We believe that in this case the Irish authorities are seeking to circumvent the letter and spirit of EU law and policy in relation to Nature Conservation, Climate Change, Environmental Impact Assessment, Energy Policy and Competition Policy. Our investigations lead us to the conclusion that the various Irish authorities are coordinating their activities and positions very effectively but the Commission is not doing so.

Given your clearly expressed view that access to environmental justice is a key issue in Ireland, we would be most grateful if you addressed these matters with your colleagues in the Competition Directorate.

Once again we take this opportunity to thank you for your continued concern for the Irish environment and the respect you have shown for the work of Irish environmental NGOs.

Yours, etc.,


Tony Lowes

HOUSES OF THE OIREACHTAIS
Dail Report
20 June, 2002
Request to move Adjournment of Dáil under Standing Order 31
Mr. Sargent: I seek the adjournment of the Dáil under Standing Order 31 in order to address the seeming disregard of the judicial process represented by the Government's determination to construct two peat fired stations in Lanesborough and Shannonbridge despite the fact that there are two court cases pending on the problems associated with new peat fuelled stations and the ESB's extracting peat without an environmental impact statement.
An Ceann Comhairle: Having considered the matter fully, I do not consider it to be in order in accordance with Standing Order 31.


COPY OF BRIAN COWEN STATEMENT
Brian Cowen, Foreign Affairs 8 May, 2002

GOVERNMENT APPROVES MEASURES TO ALLOW ESB POWER STATIONS TO PROCEED, ANNOUNCES MINISTER COWEN

Mr Brian Cowen, Minister for Foreign Affairs has announced that, at the Government meeting earlier today measures to allow the ESB proceed with the building of new Power Stations at Shannonbridge and Lanesboro were formally approved by the Cabinet.

Minister Cowen went on to say: "The decison taken today by the Cabinet, which I warmly welcome, means that there is no obstacle to the commencement of construction work on the new Power Stations regardless of the judicial review proceedings recently initiated in relation to planning permission. These proceedings had threatened to seriously delay construction work on the Power Stations.

I believe that it is critical to maintain the momentum for these large scale projects to proceed at this time and I am grateful to my Ministerial colleague, Mary O'Rourke for her early intervention to ensure that there is no undue delay in the construction of these stations at Shannonbridge and Lanesboro. I was aware of the potential difficulties posed and was glad to support the measures put forward to allow work to commence at an early date."


DEPARTMENT OF ENTERPRISE STATEMENT
Richard Moore DPE 15 May, 2002

Response to Query
The Government was briefed by the Minister for Public Enterprise on the current state of play in relation to the two new peat stations. The question of the Government indemnifying ESB did not arise. The effect of the Government decision was to note the position and to confirm that construction costs incurred by ESB would be treated as additional costs for the purposes of the Public Service Obligations Order, provided they are in accordance with EU rules.


EUROPEAN COMPETITION DIRECTORATE
State Aid, Horizontal Aid, Brussels 20.09.01

Subject: Public Service Obligations imposed on electricity supply board

Dear Sir,
I am writing to you pursuant to the 31 July letter Mr. Tradacete sent you in reply to your 24 July 2001 letter concerning public service obligations imposed on the Irish Electricity Supply |Board (ESB) regarding the generation of electricity out of peat.

In your letter, you complain about the Irish Government's project to impose a public service obligation on the ESB to generate part of its electricity out of peat. You argue that such a project may cause infringements on a variety of climate and environmental agreements and directives.

In his reply to your letter, Mr. Tradacete explained to you inter allia that such public service obligations may give rise to state aid issues and that he would for this reason forward me your letter and the reply he gave to it, so that I let you know the commission's position in this respect. This is the object of the present letter.

It is up to the member state to define the scope of the public service obligations.

The 96/92/EC Directive that sets out the rules for liberalization of the European Electricity Market explicitly foresees in its Article 8(4) that security of supply may be the object of public service obligations. It provides the possibility for Member States to give priority to generating installations using indigenous primary energy fuel sources, to an extend not exceeding in any calendar year 15% of the overall primary energy necessary to produce the electricity consumed in the Member State concerned.

Therefore it seems that the generation of a certain amount of electricity out of peat can be considered as a valid public service obligation, if this amount is compatible with the limit stated above.

In accordance with Article 86(2) of the EC Treaty, charges related to public service obligations may be compensated through state aids, provided such State aids comply with certain rules.

Namely, the aids must be granted to a company that has been legally entrusted from the public service obligations. They must be proportionate to the charge incurred by the company, and must not affect trade to an extent that is contrary to community interest.

If State aids provided to Irish companies in compensation for their obligation to generate electricity out of peat are granted in accordance with these rules, then the commission is not in the position to forbid them.

Yours sincerely,
Jean-Louis COLSON, Head of Unit



PRESIDENT OF THE EUROPEAN COMMISSION

Loyola de Palacio,
President of the European Commission
20-09-01

To Ms. Patricia McKenna

Dear Ms. McKenna,

Thank you for your letter of 2 August 2001 relating to the notification by the Irish government of an intended levy on electricity consumers to support peat generation.

Currently this notification is being considered by DG Competition in close collaboration with my officials. However I should note that it is being examined solely from the point of view of its compatibility with the part of the treaty dealing with state aids. The Commission is not responsible for enforcing other agreements that the Irish Government may have entered into outside the EU Treaty.

As to the anti-competitive nature of the proposed measure, the Treaty recognizes in Article 87(1) the inherent distortive effects of all state aids. However the Commission will decide in due course whether this particular case falls under the exemptions set out in the remaining part of Article 87.

Yours sincerely,

Loyola de Palacio




ENDS



Read how the Cabinet has agreed unspecified "measures" to allow the construction of the plants to continue in spite of the fact that FIE has a Judicial review of the projects before the High Court.


CABINET INTERVENS IN PEAT POWERED ESB STATIONS LEGAL CHALLENGE

STATE AID GIVEN FOR POWER PLANTS WITHOUT EU APPROVAL

Background
Friends of the Irish Environment is engaged in a campaign to prevent the construction of two new peat fired power plants on the grounds that they are in breach of the Environmental Impact Assessment Directive, the Habitats Directive and the United Nations Framework Convention on Climate Change. FIE have taken the first two of these grounds to the High Court and are awaiting hearing.

The European Commission issued a Reasoned Opinion on 21st December 2001 which details the Commission's view that the failure to subject the extraction of peat to EIA amounts to a failure by Ireland to fulfill obligations under the Environmental Impact Assessment Directive. This Reasoned Opinion is the last step before bringing Ireland to the European Court of Justice for the second time for failing to apply this directive to the destruction of peatlands. Two other EU Court cases question this project.

The simple fact is that there has never been an environmental impact assessment of the extraction of peat in Ireland, in spite of the clear impacts through flooding, siltation, and habitat destruction.

FIE now learns that in the middle of an election campaign, the Cabinet has decided to take unspecified measures to ensure that notwithstanding our challenge to the validity of the planning permissions and EPA licence, the power plants are built. The only measure we can imagine in this regard is a
guarantee to the ESB that the taxpayer will foot the bill if it finds it has built a power plant which then is declared illegal.

The questions are:
* What is the Government decision?
* Has this decision been notified to the European Commission?
* How much money js being placed at risk by this decision?
* What is the Government's answer to the European Commission's legal challange?


STATEMENT BY FRIENDS OF THE IRISH ENVIRONMENT

Friends of the Irish Environment, who have brought the Judicial Reviews, said today that they "have every confidence in the High Court to vindicate citizens' rights to challenge decisions and believe the Court will enforce European Law and protect the remaining Irish peatland habitats." The group said it has taken legal advice about the Cabinet decsion to indemnify the ESB for proceeding in spite of pending European and Irish Court challenges by adding any loses to the surcharge on each consumers bill through the PSO mechanism. "




COPY OF BRIAN COWEN STATEMENT
Brian Cowen, Foreign Affairs 8 May, 2002

GOVERNMENT APPROVES MEASURES TO ALLOW ESB POWER STATIONS TO PROCEED, ANNOUNCES MINISTER COWEN

Mr Brian Cowen, Minister for Foreign Affairs has announced that, at the Government meeting earlier today measures to allow the ESB proceed with the building of new Power Stations at Shannonbridge and Lanesboro were formally approved by the Cabinet.

Minister Cowen went on to say: "The decison taken today by the Cabinet, which I warmly welcome, means that there is no obstacle to the commencement of construction work on the new Power Stations regardless of the judicial review proceedings recently initiated in relation to planning permission. These proceedings had threatened to seriously delay construction work on the Power Stations.

I believe that it is critical to maintain the momentum for these large scale projects to proceed at this time and I am grateful to my Ministerial colleague, Mary O'Rourke for her early intervention to ensure that there is no undue delay in the construction of these stations at Shannonbridge and
Lanesboro. I was aware of the potential difficulties posed and was glad to support the measures put forward to allow work to commence at an early date."


DEPARTMENT OF ENTERPRISE STATEMENT
Richard Moore DPE 15 may

Response to Query
The Government was briefed by the Minister for Public Enterprise on the current state of play in relation to the two new peat stations. The question of the Government indemnifying ESB did not arise. The effect of the Government decision was to note the position and to confirm that construction costs incurred by ESB would be treated as additional costs for the purposes of the Public Service Obligations Order, provided they are in
accordance with EU rules.


NOTE:
It appears the Government has used this method to subsidise the construction of the power plants without any authorisation under the Commission's State Aid Regulations.

16 MAY 2002




We write to urge you to refuse the Irish Government's application to impose a Public Service Obligation on the Irish Electricity Supply Board, (the State Electricity Board) to subsidise the burning of turf.




Mr. Alexander Schaub,

Director General,

DG Competition,

200 rue de La Loi

Brussels,

24 July, 2001 By Fax. Copy by Registered Letter



Re: Public Service Obligation on Irish Electricity Supply



Dear Commissioner;


We write to urge you to refuse the Irish Government's application to impose a Public Service Obligation on the Irish Electricity Supply Board, (the State Electricity Board) to subsidise the burning of turf.


This application involves the destruction of peat bogs, which is the removal of a sink for CO2. This proposal is in conflict with the provisions of the United Nations Framework Convention on Climate Change, which constitutes a binding international agreement and of which Ireland is a signatory. We refer in particular to the obligations set out in the following articles of the Convention


ARTICLE 3

PRINCIPLES

In their actions to achieve the objective of the Convention and to implement its provisions, the Parties shall be guided, INTER ALIA, by the following:

3....The Parties should take precautionary measures to anticipate, prevent or minimize the causes of climate change and mitigate its adverse effects. Where there are threats of serious or irreversible damage, lack of full scientific certainty should not be used as a reason for postponing such measures, taking into account that policies and measures to deal with climate change should be cost-effective so as to ensure global benefits at the lowest possible cost. To achieve this, such policies and measures should take into account different socio-economic contexts, be comprehensive, cover all relevant sources, sinks and reservoirs of greenhouse gases and adaptation, and comprise all economic sectors. Efforts to address climate change may be carried out cooperatively by interested Parties.


ARTICLE 4

COMMITMENTS

1....All Parties, taking into account their common but differentiated responsibilities and their specific national and regional development priorities, objectives and circumstances, shall:

(d)....Promote sustainable management, and promote and cooperate in the conservation and enhancement, as appropriate, of sinks and reservoirs of all greenhouse gases not controlled by the Montreal Protocol, including biomass, forests and oceans as well as other terrestrial, coastal and marine ecosystems;

2....The developed country Parties and other Parties included in Annex I commit themselves specifically as provided for in the following:

(a)....Each of these Parties shall adopt national policies and take corresponding measures on the mitigation of climate change, by limiting its anthropogenic emissions of greenhouse gases and protecting and enhancing its greenhouse gas sinks and reservoirs. These policies and measures will demonstrate that developed countries are taking the lead in modifying longer-term trends in anthropogenic emissions consistent with the objective of the Convention, recognizing that the return by the end of the present decade to earlier levels of anthropogenic emissions of carbon dioxide and other greenhouse gases not controlled by the Montreal Protocol would contribute to such modification, and taking into account the differences in these Parties' starting points and approaches, economic structures and resource bases, the need to maintain strong and sustainable economic growth, available technologies and other individual circumstances, as well as the need for equitable and appropriate contributions by each of these Parties to the global effort regarding that objective. These Parties may implement such policies and measures jointly with other Parties and may assist other Parties in contributing to the achievement of the objective of the Convention and, in particular, that of this subparagraph;


The proposed extraction and combustion of peat also has a number of other serious environmental consequences in relation to compliance with the Habitats Directive and the Biodiversity Convention, and in relation to long-range acidifying air pollution. We would be grateful for your attention to this matter and the opportunity to meet with you to further detail our concerns.


An Taisce, the National Trust

Back Lane, Dublin 8


And on behalf of:

The Irish Peatland Conservation Council,

119 Capel Street,

Dublin 1


VOICE

7 Upper Camden Street,

Dublin 1


Earthwatch/Friends of the Earth International

20 Grove Road,

Rathmines,

Dublin 6


The Irish Wildlife Trust


Grian

14 Brookfield Place,

Blackrock, County Dublin


Friends of the Irish Environment

Allihies,

County Cork


NB: WE WERE ADVISED THAT THE APPROPRIATE DIRECTORATE WAS ENERGY AND HAVE APPLIED TO THEM.





NGO PETITION 3 SEPTEMBER, 2001


President of the European Parliament,

European Parliament,

Members Activities Division,

Committee of Petitions,

Kirchberg,

L - 2929 Luxembourg

September 3, 2001



Dear Mr. President,


We, the undersigned Irish non-governmental environmental organisations, wish to have a petition accepted for consideration. Our organisations represent more than 15,000 members of the Irish public concerned with the future of Ireland and the world's environment.


This petition opposes the proposal before the Commission to permit Ireland to direct the Irish Commissioner for Electricity Regulation to impose a Public Service Obligation on the national Electricity Supply Board to source a certain quantity of electricity from peat-fired sources. The imposed Public Service Obligation would allow for the recovery of excess costs of production from all electricity users with the effect that all users of electricity in Ireland would be required to pay for this environmentally damaging activity.


This approach is outlined in the Environmental Impact Statement for the proposed Shannonbridge Power Station in County Roscommon.


"However, arising from concerns to ensure that a reasonable level of national self sufficiency in energy sources for electricity supply is maintained, the Government has indicated its intention to direct the Commission for Electricity Regulation to impose an obligation on the ESB to source a certain quantity of electricity from peat-fired sources. The imposed Public Service Obligation would allow for the recovery of excess costs of production from all electricity users. The Government has applied to the European Commission for approval of its proposed action. The approval application is framed on the basis that ESB will discharge its obligation by the purchase of the output of the 117 MegaWatts Edenderry Power Limited Peat-fired Station for 15 years, closure of existing older peat-fired stations and the construction of replacement stations at Shannonbridge and Lanesboro."


The grounds of our petition are attached.


Respectfully yours,


Michael Smith,

National Chairman

An Taisce, the National Trust for Ireland


And on behalf of


Friends of the Irish Environment

Grian, The Greenhouse Ireland Action Network

Irish Peatland Conservation Council

The Irish Wildlife Trust

VOICE of Concern for the Irish Environment.



An TaisceThe National Trust for IrelandThe Tailors' Hall, Back Lane, Dublin 8Tel. 01-453 3428 Fax 01-453 3255 e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.



3 September, 2001



PETITION TO THE PRESIDENT OF THE EUROPEAN COMMISSION TO REFUSE A PUBLIC SERVICE OBLIGATION FOR THE PRODUCTION OF ELECTRICITY THROUGH THE USE OF IRISH PEATLANDS



GROUNDS OF THE PETITION


1. Contravention of United Nations Framework Convention on Climate Change and Kyoto Protocol

2. Lack of compliance with Habitats Directive

3. Contravention of Biodiversity Convention

4. Security of national supply

5. Competition & State Aid Issues

6. Disadvantaging renewable energy

7. Protection of Archaeological Heritage

8. Lack of Rehabilitation proposals



1. Contravention of United Nations Framework Convention on Climate Change and Kyoto Protocol


The Irish State is seeking planning permission for two new power plants to operate by extracting peat from raised bogs to burn for electricity generation. This will be done by Bord na M??na and the ESB - two state companies in cooperation.


The Irish Environmental Protection Agency Millennium Report states "Switching to less carbon-intensive fuels and particularly reducing Ireland's high level of dependence on fossil fuels will be important (in the abatement of emissions)".


The use of peat for production of electricity has a triple greenhouse gas impact:

a. CO2 release from combustion, peat being the most carbon-intensive of fossil fuels.

b. oxidation of unharvested peat from peatlands drained for extraction.

c. removal of a sink which would otherwise continue to absorb carbon.


This destruction of a sink is in conflict with the provisions of the United Nations Framework Convention on Climate Change, which constitutes a binding international agreement and of which Ireland is a signatory. We refer in particular to the obligations set out in the following articles of the Convention:


ARTICLE 3

PRINCIPLES

In their actions to achieve the objective of the Convention and to implement its provisions, the Parties shall be guided, INTER ALIA, by the following:

3....The Parties should take precautionary measures to anticipate, prevent or minimize the causes of climate change and mitigate its adverse effects. Where there are threats of serious or irreversible damage, lack of full scientific certainty should not be used as a reason for postponing such measures, taking into account that policies and measures to deal with climate change should be cost-effective so as to ensure global benefits at the lowest possible cost. To achieve this, such policies and measures should take into account different socio-economic contexts, be comprehensive, cover all relevant sources, sinks and reservoirs of greenhouse gases and adaptation, and comprise all economic sectors. Efforts to address climate change may be carried out cooperatively by interested Parties.


ARTICLE 4

COMMITMENTS

1....All Parties, taking into account their common but differentiated responsibilities and their specific national and regional development priorities, objectives and circumstances, shall:

(d)....Promote sustainable management, and promote and cooperate in the conservation and enhancement, as appropriate, of sinks and reservoirs of all greenhouse gases not controlled by the Montreal Protocol, including biomass, forests and oceans as well as other terrestrial, coastal and marine ecosystems;

2....The developed country Parties and other Parties included in Annex I commit themselves specifically as provided for in the following:

(a)....Each of these Parties shall adopt national policies and take corresponding measures on the mitigation of climate change, by limiting its anthropogenic emissions of greenhouse gases and protecting and enhancing its greenhouse gas sinks and reservoirs. These policies and measures will demonstrate that developed countries are taking the lead in modifying longer-term trends in anthropogenic emissions consistent with the objective of the Convention, recognizing that the return by the end of the present decade to earlier levels of anthropogenic emissions of carbon dioxide and other greenhouse gases not controlled by the Montreal Protocol would contribute to such modification, and taking into account the differences in these Parties' starting points and approaches, economic structures and resource bases, the need to maintain strong and sustainable economic growth, available technologies and other individual circumstances, as well as the need for equitable and appropriate contributions by each of these Parties to the global effort regarding that objective. These Parties may implement such policies and measures jointly with other Parties and may assist other Parties in contributing to the achievement of the objective of the Convention and, in particular, that of this subparagraph."


The Irish Economic and Social Research Institute [ESRI] stated in its Mid-Term Evaluation of Community Structural Funds:


"Ireland is party to EU policies regarding the adoption of national emission quotas for atmospheric pollutants. Once these national limits are being approached, additional projects which emit pollutants in question must be constrained in some fashion. Whatever method is employed, the implication is that a penalty, in the form of some shadow price, must now be attached to the projects in question. These shadow prices could be significant, and could materially affect the economics of the project. This issue is likely to become a serious matter in areas such as heavy industry or power generation, and is one concern regarding the European Project, discussed elsewhere."


This Report concludes:

"Because of the undesirable side-effects of peat powered electricity generation, successive studies have recommended against this investment."


2. Lack of Compliance with the Habitats Directive

Severe losses of raised bogs across the European range means that today only 46,552 ha remain. The Republic holds 23,527 ha (51%) of the Community's resource. 22% of the Irish raised bogs have been destroyed in the last 50 years, mainly for generating electricity. Over the coming decades an estimated 1,800 hectares of bog will be harvested for this purpose.


Given the Judgement of the European Court in First Corporate Shipping, the exclusion of 4,993 ha of active raised bog and 9,683 degraded bog, detailed in the 1998 submission by the Irish Peatland Conservation Council to Environmental Commissioner Bjerregaard can no longer be sustained.


The additional sites recommended in this Report and in the Irish NGO Submission to the Nature Topic Center, "Protecting Nature In Ireland -

The NGO Special Areas of Conservation Shadow List" includes three cluster concentrations within areas that are subject to intensive industrial peat extraction: the Upper Shannon/Lough Ree cluster, Lower Shannon/Little Brosna cluster, and the Bog of Allen Transect from Kildare to Galway.


The Irish NGO Report lists 113 sites which have put been forward by Ireland's NGO's for adoption as Special Areas of Conservation.


In a letter dated 21 May, 2001, The Head of Unit, Environmental Directorate B Nature Study and Biodiversity, stated to the Irish Peatland Conservation Council:


"The Commission recognizes that Ireland has made significant progress last year in proposing sites for protection under the Habitats Directive, including those for Active Raised Bogs. However, DG Environment has informed the Irish authorities that it is our view that further raised bog sites need to be proposed by Ireland to meet the objectives of the Directive. This view would be reaffirmed by the judgment of the Court in the case of First Corporate Shipping.


It is our view, based on available scientific evidence, that unless Ireland proposes additional sites for this interest raised bog will not be sufficiently represented on the Irish national list. However, it will only be in the context of the next Biogeographical Seminar for the Atlantic Region that it will be possible to come to a collective scientific view on the sufficiency of different national proposed lists of sites for the different habitat types and species for this region. The Atlantic seminar was foreseen for Autumn this year but due to delays in submission of sites and data from Member States it may be necessary to review this timetable as has been required for other regions."


This concern is strengthened as no list is supplied by Bord na Mona of the bogs it intends to harvest for these plants.


3. Contravention of Biodiversity Convention

Within the national nature designation process 44% of the Natural Heritage Areas are peatland but none of these have management plans which would ensure their favourable conservation status. The importance of raised bogs for Ireland's biodiversity extends beyond the protection offered for the species and habitats listed in the Habitats Directive.


The importance for biodiversity is reflected in the fact that:

¬? 15% of our original native flora are peatland plants

¬? 26% of our mammals are dependent on peatlands at some point in their lifecycle

¬? 59 species are totally or at some phases in the life dependent on peatlands

¬? 49% of all endangered birds in Ireland occur on peatlands

¬? 23% of the endangered plants in Ireland are peatland species.


Ireland's obligations on the Biodiversity Convention require areas outside of Special Areas of Conservation and Natural Heritage Areas to be conserved. No attempt has been made to designate peatland wildlife in the wider countryside. Peat extraction is actively being carried out within these areas and this continues without the benefit of a suitable assessment of the environmental impact.


4. Security of national supply

The commissioning of the recent peat powered station at Edenderry ensures that continuity of security will be ensured, albeit at a lower level. In fact, Ireland's security of supply is better assured by protecting the peat reserves intact, not by exhausting the supply though exploitation at this time.


The proposed exploitation of the natural gas field in Mayo and the advanced plans for a new national pipeline provides Ireland with a secure national source of fuel which, which still a fossil fuel, enables the production of electricity with a lesser level of emissions and without the destruction of the national peatland resource.



5. Competition & State Aid Issues

While it is up to the Member State to define the scope and obligation Public Service Obligations, the application of Article 86 of the EC Treaty provides that competition rules may under certain circumstances not be applicable to undertakings entrusted with the operation of services of general economic interest.


We would suggest that the contradiction of the environmental imperative identified by Ireland's Economic and Social Research Institute precludes the Commission from allowing Article 81 and 82 to be waived.


In "The Cost to Ireland of Carbon Dioxide Abatement Costs", the Irish Economic and Social Research Institute states:

"Finally, a move to substantial restrictions on carbon dioxide emissions will highlight other distortions in related markets. The policy of subsiding turf production will be highlighted as being in direct conflict with environmental imperative. If turf production for energy use continues, the implicit subsidy involved will rise dramatically. If other existing efficient plant has to be replaced before its time to allow turf production to continue this will add to existing costs. This applies both to existing turf stations and to any new ones built in the future."


The Organization for Economic Cooperation and Development predicts a net growth of CO2 emissions of 63% between 1990 and 2010, with a do-nothing scenario. In the context of increased CO2 emission, the OECD examines the social argument in support of peat electricity generation as follows:


"Peat is a subsidized energy source that emits a high level of CO2 per unit of energy (1.6 kg CO2/kWh electricity, compared with 0.5 kg CO2 for a single cycled gas-fuelled power station) as well as other pollutants, and whose extraction is environmentally damaging. There is great reluctance to downsize the peat industry through the elimination of subsidies, as it is a major employer in the Midland and western areas (2000 jobs). Peat energy currently accounts for 7% of TRES. It is foreseen that peat use for electricity production will increase from 0.52 million toe in 1998 to 0.65 million toe in 2005 and then decreases (to 0.50 million toe in 2010). Peat related CO2 emissions have been estimated at 2.5 Mt in 1998, 3.16 Mt in 2005, and 2.4 Mt in 2010. A new peat-fired electricity power station (IEP 100 million) will start operating by the end of 2000. One fifth of the capital cost is supported by an EU grant. Some old plants are due to close in the next few years, to be replaced by more fuel efficient ones. The OECD-IEA has estimated the producer subsidy equivalent for peat production 1997-98 at IEP 5 per tonne. i.e. IEP 15 million per year or IEP 12,226 per employee year [Note: 1999 production was double 1997.] A consultant report suggests that replacing peat use in power stations with combined cycle gas turbines would have economic benefits and reduce CO2 emissions and damage to the landscape; the economic benefits should cover the cost of social measures to alleviate unemployment. Closure could be restricted to the 11 peat plants built in the 1950s and 1960s, with the more efficient plants under construction continuing to operate."



6. Disadvantaging renewable energy

In its Annual Report for 1999 - 2000, Bord na Mona makes the following comment:


"In September 1999 the Minister of State for Energy issued a Green Paper on Sustainable Energy and established a Task Force to advise him on the future development of wind energy. The current policy on competition for wind energy favours tax-driven developers and installations on elevated sites with high wind regimes (often scenic and controversial). A change in this policy could make it commercially viable to install windfarms, in addition to those of Renewable Energy Ireland Ltd, on Bord na Mona cut-away bog with lower wind regimes, particularly in areas such as Oweninny in Co. Mayo where the wind regime is known."


By permitting the imposition of a Public Service Obligation to support fossil fuels, the Commission works directly against the restructuring of the Irish electricity industry to favor alternative energy, where a PSO is rightly in place to support wind generation and water turbines and could be extended to the wind generation opportunities identified by Bord na Mona, the State Peat company.


The proposed cross subsidising of these power plants will further distort competition and create a market access barrier for alternative and more environmental friendly and cost effective sources of electricity supply and raw materials.


7. Protection of Archaeological Heritage

Ireland ratified the Council of Europe Valletta Convention on the archaeological Heritage on 18 March, 1997, entering into force on September 19, 1997. The definition of the archaeological heritage in Article 1 of the Convention is:


"Article 1

The aim of this (revised) Convention is to protect the archaeological

heritage as a source of the European collective memory and as an instrument for historical and scientific study. To this end shall be considered to be elements of the archaeological heritage all remains and objects and any other traces of mankind from past epochs:

- the preservation and study of which help to retrace the history of mankind and its relation with the natural environment;

- for which excavations or discoveries and other methods of research into mankind and the related environment are the main sources of information; and

- which are located in any area within the jurisdiction of the Parties.


Article 3 states:

"The archaeological heritage shall include structures, constructions, groups of buildings, developed sites, moveable objects, monuments of other kinds as well as their context, whether situated on land or under water."


The accompanying explanatory text reads:

"The phrase "elements of the archaeological heritage" is used to emphasise that it is not just objects that are important. Any evidence, of whatever nature, that can throw light on the past of mankind is important. If that evidence meets the criteria set in pargraph 2, then it is an element of the archaeological heritage. There are three criteria: first, there must be something, even a trace, which comes from past human existence; secondly, that same thing must be capable of enhancing our knowledge of the history of mankind and its relation with the natural environment; thirdly, it must be something that is mainly ascertained through investigation of an archaeological nature or deliberate discovery. Paragraph 3 gives examples of the type of things included in the archaeological heritage. It must be stressed that this list is not exhaustive, but illustrative only."


Article 2 (ii) requires "the creation of archaeological reserves, even where there are no visible remains on the ground or under water, for the preservation of material evidence to be studied by later generations"


On this basis, since peat bogs contain evidence of human interaction with the environment (preserved biological remains, etc.) that can be recovered by standard methods used in archaeology, as well as artifacts etc., they represent part of the archaeological heritage and are inherently non-renewable. The position on peat being a renewable source of energy is totally untenable on this basis.



8. Lack of rehabilitation proposals

Present plans indicate that cutaway bogs will total 85,077 hectares. Over the coming decade 1,500 hectares of bog will become available each year. Bord na Mona estimates that 50,000 hectares of cut-away bog are suitable for forestry.


Yet no national survey of cutaway bogs has taken place and no consultative after use plan has been produced for the rehabilitation or reuse of these areas, in spite of individual projects that demonstrate the success of grasslands and forestry on well drained cutaway bog areas and wildlife/wetland amenity on the areas where drainage difficulties persist.


No legal obligation exists to require rehabilitation of the cutaway bogs and the matter has been ruled beyond the jurisdiction of the Irish Planning Appeals Board and the Environmental Protection Agency's licensing system. Would such a situation be permitted in any other form of open cast mining, where binding agreements on rehabilitation are accepted as a prerequisite to any development consent?


Request for information

We have sought from the Irish authorities the correspondence between the European Commission and Ireland in relation to the approval of the Public Service Order and these have not been released on the grounds that the negotiations are "ongoing". We respectfully request these documents from the European Commission.


Conclusion

An Taisce, the National Trust for Ireland, submits this petition on its own behalf and on behalf of the Irish non-governmental environmental organisations


Friends of the Irish Environment,

Irish Peatland Conservation Council,

Grian the Greenhouse Ireland Action Network,

The Irish Wildlife Trust,

VOICE of Concern for the Irish Environment


who respectfully request the European Commission to refuse the application by Ireland to permit Ireland to direct the Irish Commissioner for Electricity Regulation to impose a Public Service Obligation on the national Electricity Supply Board to source a certain quantity of electricity from peat-fired sources and recover the costs from all users of Irish electricity.


-----------------------------------------



References


OECD Environmental Performance Reviews, Ireland, 2001, Ooranosation for Economic Cooperation and Deve;opment


National Investment Priorities for the Period 2000 - 2006, Economic and Social Research Institute, March 1999.


EU Structural Funds in Ireland, A Mid Term Evaluation of the CSF 1994 -1999, Economic and Social Research Institute, 2000


The Costs to Ireland of Greenhouse Gas Abatement, Economic and Social Research Institute, 1997


Protecting Nature in Ireland, The NGO Special Areas of Conservation Shadow List, Dwyer, R.B. A report prepared for An Taisce, Birdwatch Ireland, Coastwatch Ireland, Irish Peatland Conservation Council, and the Irish Wildlife Trust. Published by Irish Peatland Conservation Council, Dublin, 2000. ISBN: 1 874189 18 8


Irish Conservation Peatland Plan, Foss, P.J. and O'Connell, C.A., Irish Peatland Conservation Council, 2000.


Do not disturb! Peatbogs and the greenhouse effect : a synthesis of the case and recommendations for action. Maltby, Edward, Immirzi, C. P., McLaren, Duncan, Friends of the Earth. ISBN 1857500113


The Global status of peatlands and their role in carbon cycling: a report for Friends of the Earth / prepared by the Wetland Ecosystems Research Group; researched and written by C. Philip Immirzi and Edward Maltby with additional material by Richard C. Clymo , Friends of the Earth, 1992, ISBN 1857501055


A Decision Support System for Managing the Radiative Force of Irish Ombrotrophic Peatlands, Gilmer and Others, Quebec 2000: 11th International Paet Conference.


Greenhouse Gas Emissions in restored Industrial Cutaway Peatlands in central Ireland, Byrne and Others, Quebec 2000: 11th International Peat Conference.


European Convention on the Protection of the Archaeological Heritage (revised), Council of Europe, 1992




Letters from the European Commission

Loyola de Palacio,
President of the European Commission
20-09-01

To Ms. Patricia McKenna

Dear Ms. McKenna,

Thank you for your letter of 2 August 2001 relating to the notification by the Irish government of an intended levy on electricity consumers to support peat generation.

Currently this notification is being considered by DG Competition in close collaboration with my officials. However I should note that it is being examined solely from the point of view of its compatibility with the part of the treaty dealing with state aids. The Commission is not responsible for enforcing other agreements that the Irish Government may have entered into outside the EU Treaty.

As to the anti-competitive nature of the proposed measure, the Treaty recognizes in Article 87(1) the inherent distortive effects of all state aids. However the Commission will decide in due course whether this particular case falls under the exemptions set out in the remaining part of Article 87.

Yours sincerely,

Loyola de Palacio



--------------------------------------------------------------------------------

EU Competition Directorate
State Aid
Horizontal Aid
Brussels 20.09.01

Subject: Public Service Obligations imposed on electricity supply board

Dear Sir,
I am writing to you pursuant to the 31 July letter Mr. Tradacete sent you in reply to your 24 July 2001 letter concerning public service obligations imposed on the Irish Electricity Supply |Board (ESB) regarding the generation of electricity out of peat.

In your letter, you complain about the Irish Government's project to impose a public service obligation on the ESB to generate part of its electricity out of peat. You argue that such a project may cause infringements on a variety of climate and environmental agreements and directives.

In his reply to your letter, Mr. Tradacete explained to you inter allia that such public service obligations may give rise to state aid issues and that he would for this reason forward me your letter and the reply he gave to it, so that I let you know the commission's position in this respect. This is the object of the present letter.

It is up to the member state to define the scope of the public service obligations.

The 96/92/EC Directive that sets out the rules for liberalization of the European Electricity Market explicitly foresees in its Article 8(4) that security of supply may be the object of public service obligations. It provides the possibility for Member States to give priority to generating installations using indigenous primary energy fuel sources, to an extend not exceeding in any calendar year 15% of the overall primary energy necessary to produce the electricity consumed in the Member State concerned.

Therefore it seems that the generation of a certain amount of electricity out of peat can be considered as a valid public service obligation, if this amount is compatible with the limit stated above.

In accordance with Article 86(2) of the EC Treaty, charges related to public service obligations may be compensated through state aids, provided such State aids comply with certain rules.

Namely, the aids must be granted to a company that has been legally entrusted from the public service obligations. They must be proportionate to the charge incurred by the company, and must not affect trade to an extent that is contrary to community interest.

If State aids provided to Irish companies in compensation for their obligation to generate electricity out of peat are granted in accordance with these rules, then the commission is not in the position to forbid them.

Yours sincerely,
Jean-Louis COLSON
Head of Unit


--------------------------------------------------------------------------------

European Commission
Directorate General Environment
Directorate E - Global and international affairs
ENV.E - The Director

Brussels 04/10/01

Subject: Public Service Obligations on Irish Electricity Supply

Thank you for your letter of 24 July addressed to the Director-General of Competition to which a provisional response was given and which has been passed to me for further comment.

I take note of your opposition to the Irish Government's application to impose a public service obligation on the Irish Electricity Board to subsides the burning of peat. I share your view that from an environmental standpoint the burning of peat has a number of environmental drawbacks and that cleaner and more sustainable energies should be promoted. I should underline that in Commission proposals on renewables, peat has never been included in the definition. Peat production and burning provides only a fraction of the European Union's energy supply, however, it is a domestic source and those countries that use it do so for economic and energy security reasons.

You stated in your letter that such a provision would be incompatible with the United Nations Framework Convention on Climate Change. Although signatories to the UNFCCC are committed to limiting and reducing greenhouse gas emissions, these provisions are not legally binding, moreover there is no prescription of any particular energy source. As regards choice of energy sources, this is also the case under the Kyoto Protocol. However, once Ireland and the European Community have ratified the protocol and the agreement is in force, the respective emissions limits agreed will be legally binding and so there will be increasing pressure to find more efficient and cleaner energy systems. This will not favour peat.

Specific sites for peat production could be contested under the Habitats Directive if they were to extract peat from protected areas but this would have to be done on a case by case basis with detailed applications.

I trust this information provides answers to your questions.

Yours sincerely,

Fernand THURMES