State spending on fossil fuels to increase despite Ireland's climate commitments

The new contract will succeed the existing supplier agreement awarded to fuel and retail multinational Circle K in 2021 and due to expire at the end of next July. Picture: Colin Keegan/Collins

The Government is to spend €160m on providing fossil fuels for the public service over the next four years — nearly 15% more than it does at present, despite binding EU climate targets as 2030 approaches.

A new contract published by the office of government procurement — a subsidiary of the department of public expenditure — will see a single supplier appointed for the delivery of fuels — including gas, diesel, heating oil, and other petroleum products — for public sector entities.

The new contract will succeed the existing supplier agreement awarded to fuel and retail multinational Circle K in 2021 and due to expire at the end of next July.

That deal had been worth €140m over the four-year contract duration, meaning the new tender is worth 14.3% more than the expiring tender.

A spokesperson for department said that under the new contract, fuel will be made available to “all civil and public sector bodies”.

The fuels to be delivered fall under three headings — automotive diesel, low sulphur gas oil, and kerosene.

The diesel is to be used in road vehicles. The gas oil is to be used in agricultural and industrial engines, as well as static boilers and central heating burners. The kerosene will be used in heating systems.

The office of government procurement said that “timely supply” will be the essence of the contract, adding that it would reserve the right to ‘test check’ any sample of fuel delivered to ensure its quality matches that of the successful tenderer’s own test reports.

Pricing of the fuel to be delivered is to be updated to the office of government procurement and local authorities on a weekly basis each Friday, the body said, together with daily updates for State bodies who request same.

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All fuel is to be delivered to locations around Ireland within 48 hours of each order being placed, the tender documents state, with provision for emergency delivery within 24 hours if required.

The minimum quantity per order is 500 litres.

Much of the increase in the value of the fuels framework agreement may be attributable to inflation, with the consumer price index having risen by roughly 19% since July 2021, when the previous contract was awarded.

However, the demand for such fossil fuels has remained relatively constant since the previous agreement was put in place, despite Ireland’s climate change commitments in that time.

It emerged last March, in a report by the Irish Fiscal Advisory Council and the Climate Change Advisory Council, that Ireland could face a bill as high as €26bn for missing its pending EU climate targets, marking the country out as the worst in Europe per head of population in terms of reducing its emissions.

That report asserted that Ireland risks paying “colossal” costs in the years ahead, having already foregone €500m of potential revenue which could have been banked had the country been meeting its climate targets heretofore.

It said that it is not too late for Ireland to act to limit the damage of missing its targets with significant investment in the likes of the energy grid and in electric vehicles.

“Yes, it will cost money,” the Climate Council’s chairwoman Marie Donnelly said. 

“But the key issue is that we need to spend the money now, rather than postponing it into the future at some time when maybe a leprechaun will find a pot of gold.”