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#offshorepetroleum – The Minister for Communications, Energy and Natural Resources, Mr. Pat Rabbitte T.D. has today announced that the taxation provisions relating to petroleum exploration and production are to be revised upwards to provide for an increased financial return to the State from discoveries made under future exploration licences and licensing options.

Speaking this morning at the "Our Ocean Wealth Conference" in Dublin Castle, Minister Rabbitte, who also highlighted the exciting potential in offshore renewable energy, recalled that last year he had told the Oireachtas that he intended to seek independent expert advice on the "fitness-for-purpose" of Ireland's fiscal terms, such advice to focus on what level of fiscal gain is achievable for the State and its citizens and, equally important, on the mechanisms best suited to produce such a gain. International experts in the sector, Wood mackenzie, were subsequently engaged to provide that advice.

Minister Rabbitte announced that having received and considered Wood mackenzie's comprehensive and detailed report that he had sought agreement of the Government that Ireland's oil and gas fiscal terms should be revised along the lines recommended. He said that he concurred with the Wood mackenzie recommendation that there should be no retroactive change to the fiscal terms applying to existing exploration authorisations.

Commenting on the detail of the report Minister Rabbitte pointed to the key central conclusion which is that there is scope for strengthening the current fiscal system in terms of:

• providing for an increase in the overall State take;

• ensuring an earlier share of revenue for the State; and

• addressing what Wood mackenzie consider to be inconsistencies in the current fiscal system.

The principal recommendations made by Wood mackenzie are as follows:

• For now Ireland should maintain a concession system, with industry rather than the State bearing the risk associated with investing in exploration;

• Going forward a form of production profit tax should continue to apply in Ireland, but for discoveries made under future licences the form of this tax should be revised;

• The tax should be charged on a field-by-field basis with the rate varying according to the profitability of the field and charged on each field's net profits;

• That the revised tax should include a minimum payment at a rate of 5% which would function like a royalty and would result in the State receiving a share of revenue in every year that a field is selling production;

• That the revised tax rates should be higher than the Profit Resource Rent Tax currently in place, thereby ensuring a higher share for the State from the most profitable fields. This would result in a maximum rate of 55% applying in the case of new licences, compared with a maximum rate of 40% under the current fiscal regime; and

• That the corporation tax rate applying to petroleum production should remain at 25%.

These recommendations flow from a comparative analysis between Ireland and nine other comparable hydrocarbon producing nations such as Newfoundland and Labrador, New Zealand, Spain and South Africa amongst others, which can be found in the report.

Minister Rabbitte concluded that "By acting now and setting out Government policy on this issue, it is my intention to communicate a clear message in relation to the stability of Ireland's fiscal regime for the oil and gas exploration sector. For existing licences no changes are proposed. For future prospective licence holders a clear regime is being set out and the rationale for that regime has been explained. This should further engender industry confidence in the stability and predictability of Ireland's oil and gas fiscal terms and allow the industry to focus on effective and timely exploration effort. "

Published in Power From the Sea
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Marine Protected Areas (MPAs) - FAQS

Marine protected areas (MPAs) are geographically defined maritime areas where human activities are managed to protect important natural or cultural resources. In addition to conserving marine species and habitats, MPAs can support maritime economic activity and reduce the effects of climate change and ocean acidification.

MPAs can be found across a range of marine habitats, from the open ocean to coastal areas, intertidal zones, bays and estuaries. Marine protected areas are defined areas where human activities are managed to protect important natural or cultural resources.

The world's first MPA is said to have been the Fort Jefferson National Monument in Florida, North America, which covered 18,850 hectares of sea and 35 hectares of coastal land. This location was designated in 1935, but the main drive for MPAs came much later. The current global movement can be traced to the first World Congress on National Parks in 1962, and initiation in 1976 of a process to deliver exclusive rights to sovereign states over waters up to 200 nautical miles out then began to provide new focus

The Rio ‘Earth Summit’ on climate change in 1992 saw a global MPA area target of 10% by the 2010 deadline. When this was not met, an “Aichi target 11” was set requiring 10% coverage by 2020. There has been repeated efforts since then to tighten up MPA requirements.

Marae Moana is a multiple-use marine protected area created on July 13th 2017 by the government of the Cook islands in the south Pacific, north- east of New Zealand. The area extends across over 1.9 million square kilometres. However, In September 2019, Jacqueline Evans, a prominent marine biologist and Goldman environmental award winner who was openly critical of the government's plans for seabed mining, was replaced as director of the park by the Cook Islands prime minister’s office. The move attracted local media criticism, as Evans was responsible for developing the Marae Moana policy and the Marae Moana Act, She had worked on raising funding for the park, expanding policy and regulations and developing a plan that designates permitted areas for industrial activities.

Criteria for identifying and selecting MPAs depends on the overall objective or direction of the programme identified by the coastal state. For example, if the objective is to safeguard ecological habitats, the criteria will emphasise habitat diversity and the unique nature of the particular area.

Permanence of MPAs can vary internationally. Some are established under legislative action or under a different regulatory mechanism to exist permanently into the future. Others are intended to last only a few months or years.

Yes, Ireland has MPA cover in about 2.13 per cent of our waters. Although much of Ireland’s marine environment is regarded as in “generally good condition”, according to an expert group report for Government published in January 2021, it says that biodiversity loss and ecosystem degradation are of “wide concern due to increasing pressures such as overexploitation, habitat loss, pollution, and climate change”.

The Government has set a target of 30 per cent MPA coverage by 2030, and moves are already being made in that direction. However, environmentalists are dubious, pointing out that a previous target of ten per cent by 2020 was not met.

Conservation and sustainable management of the marine environment has been mandated by a number of international agreements and legal obligations, as an expert group report to government has pointed out. There are specific requirements for area-based protection in the EU Marine Strategy Framework Directive (MSFD), the OSPAR Convention, the UN Convention on Biological Diversity and the UN Sustainable Development Goals. 

Yes, the Marine Strategy Framework directive (2008/56/EC) required member states to put measures in place to achieve or maintain good environmental status in their waters by 2020. Under the directive a coherent and representative network of MPAs had to be created by 2016.

Ireland was about halfway up the EU table in designating protected areas under existing habitats and bird directives in a comparison published by the European Commission in 2009. However, the Fair Seas campaign, an environmental coalition formed in 2022, points out that Ireland is “lagging behind “ even our closest neighbours, such as Scotland which has 37 per cent. The Fair Seas campaign wants at least 10 per cent of Irish waters to be designated as “fully protected” by 2025, and “at least” 30 per cent by 2030.

Nearly a quarter of Britain’s territorial waters are covered by MPAs, set up to protect vital ecosystems and species. However, a conservation NGO, Oceana, said that analysis of fishing vessel tracking data published in The Guardian in October 2020 found that more than 97% of British MPAs created to safeguard ocean habitats, are being dredged and bottom trawled. 

There’s the rub. Currently, there is no definition of an MPA in Irish law, and environment protections under the Wildlife Acts only apply to the foreshore.

Current protection in marine areas beyond 12 nautical miles is limited to measures taken under the EU Birds and Habitats Directives or the OSPAR Convention. This means that habitats and species that are not listed in the EU Directives, but which may be locally, nationally or internationally important, cannot currently be afforded the necessary protection

Yes. In late March 2022, Minister for Housing Darragh O’Brien said that the Government had begun developing “stand-alone legislation” to enable identification, designation and management of MPAs to meet Ireland’s national and international commitments.

Yes. Environmental groups are not happy, as they have pointed out that legislation on marine planning took precedence over legislation on MPAs, due to the push to develop offshore renewable energy.

No, but some activities may be banned or restricted. Extraction is the main activity affected as in oil and gas activities; mining; dumping; and bottom trawling

The Government’s expert group report noted that MPA designations are likely to have the greatest influence on the “capture fisheries, marine tourism and aquaculture sectors”. It said research suggests that the net impacts on fisheries could ultimately be either positive or negative and will depend on the type of fishery involved and a wide array of other factors.

The same report noted that marine tourism and recreation sector can substantially benefit from MPA designation. However, it said that the “magnitude of the benefits” will depend to a large extent on the location of the MPA sites within the network and the management measures put in place.

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