Thursday, 23 March 2017, Leaders’ Question Bord na Móna Factory Littleton.

Deputy Michael Lowry Leaders’ Questions on Thursday 23rd March in connection to the Bord na Móna Littleton Factory following this week revelations that Bord na Móna is carrying out a comprehensive review of its briquetting operations.

Michael Lowry (Tipperary, Independent)

I wish to raise the issue of the Government’s position with regard to support of Bord na Móna. Bord na Móna, in particular, the Littleton plant in my constituency, has been traditionally known for its production of briquettes for more than 40 years and has given valuable employment to people from Littleton, Killenaule, Templetuohy, Thurles and surrounding areas. The facility in Littleton can be traced back to Bord na Móna’s roots. Recently, to safeguard the facility in Littleton, workers have accepted restructuring proposals from management and unions through the Workplace Relations Commission and the Labour Court. This is a clear commitment that the workforce at Littleton briquette factory is committed to its future.

Recently we have heard about a Bord na Móna review of peat production operations and briquette manufacturing factories. This has led to concerns and fears among more than 120 workers at the Littleton plant. Bord na Móna is going through a difficult time in terms of the sales of briquettes, principally because of the imposition of carbon tax at the insistence of the Green Party in the 2010 budget. At that time, I negotiated a derogation for peat produced products but it was reintroduced in 2013. Since 2013 the carbon tax has doubled meaning that there is a 50 cent tariff on every bale of briquettes produced. On top of that, the import of unregulated fuel products from Northern Ireland is a massive problem in the marketplace for Bord na Móna.

The current review by Bord na Móna of its peat operations is of fundamental and critical importance. Its recommendations will shape the future of peat production in Ireland. It will determine what quantities of briquette production will be required for the marketplace in the future. It will also determine the number of production facilities and recommend the location of the factory or factories. Its recommendations will have far-reaching implications and shuddering consequences. It has the potential to destroy livelihoods and to consign workers and dependent families to financial hardship. The outcome of the report is capable of wreaking havoc on local communities. Therefore, the report is a very serious matter that must treated in a professional, responsible, fair and caring manner.

The Tánaiste must understand that this is a nerve-tingling time for the employees of Bord na Móna, whether they are in Tipperary, Offaly or another part of the midlands. The prospect of further rationalisation or consolidation has struck fear in the hearts and minds of employees. What is the Government’s position on the Bord na Móna efforts?

Frances Fitzgerald (Dublin Mid West, Fine Gael)

As the Deputy well knows, Bord na Móna is a commercial State company and the management and operation of briquette factories is an operational matter for the company and not one in which the Government has any direct role or function. However, I recognise the points the Deputy has made on the concerns of the employees in both places at present. Bord na Móna is facing significant business challenges in the context of the deregulation of the electricity market and increasingly competitive and challenging environments across all its business areas, not least its fuels business. It has been operating at a level significantly below capacity in recent times and there are a number of initiatives under way at present.

A comprehensive review is being undertaken at present on the operations at Littleton in County Tipperary and Derrinlough in County Offaly. The review will examine projected demand for peat briquettes as well as the plans for biomass and the combined capacity and infrastructure needed to deliver production to meet the forecasted demand. A serious analysis is being carried out at present on the production capacity and the demand and how they can be matched. As it requires much input from a number of people, the review is not expected to be finalised before May at the earliest. We will await the review and its analysis.

In the meantime, Bord na Móna has been working with and briefing staff and employees in the fuels business have been briefed on the review. I assure the Deputy that I understand that ongoing updates will be provided to them. Management has also provided assurances that no decision on the future of the plants will be taken until the review is completed. At the very least, we must await the outcome of the review in May. No one at this point can predict the recommendations that will be in the review, but there are a number of initiatives taking place which it is hoped will give the best outcome for the jobs about which the Deputy speaks. For example, there is a pilot trial for the production and sale of a biomass briquette made at its factory at Littleton for the past 12 months. The development of a biomass briquette is a significant investment by Bord na Móna Fuels and a critical step in future proofing the jobs the Deputy is highlighting and meeting the particular challenges faced by the company at present. However, the company is investing in research to see how it can best meet those challenges ahead.

Michael Lowry (Tipperary, Independent)

It is important to realise that the Government has a responsibility to oversee the policies of Bord na Móna and how they impact on employment. I presume there is a process involved here. As the Tánaiste indicated, the report will be published in May. I presume it will go to the board of Bord na Móna before being submitted to the joint committee with responsibility for energy and natural resources, the Minister and the Government. The future plans and ambition of Bord na Móna must not be curtailed by financial necessity. The Government must encourage and support the company by making available the substantial funds required to invest in upgrading existing plants such as Littleton and providing the €35 million required to install and commission a combined heat and power plant at the Littleton site. The trial at Littleton has been highly successful and made substantial progress. I hope its conclusions will show we can manufacture a biomass peat product and that this product, combined with investment in the combined heat and power plant, will secure the site’s future. I ask that the Minister take this into account in his discussions with Bord na Móna.

Frances Fitzgerald (Dublin Mid West, Fine Gael)
I will ask the Minister to liaise directly with Deputy Lowry on this issue. It is planned to run further biomass production trials alongside peat briquette production in the next few months, with a view to completing a detailed business case for this product. The business case will consider the location for the commercial scale biomass plant. If or when this product is developed, it will offer an opportunity to provide sustainable, long-term, quality jobs in the fuels and feedstock divisions of Bord na Móna. As the Deputy noted, there is still some way to go and we await the review at the end of May and the results of the pilot projects which are assessing the viability of the product and how it could be developed. At that point, there will no doubt be committee hearings on the report. We await with interest the outcome in May.