Green IFSC Welcomes Tax Change in Finance Bill to Boost Green Finance Business in Forestry Sector
****Ireland believed to be first country in the world to provide for forest carbon credits in tax legislation****
The Green IFSC initiative has welcomed the latest move by Government to ensure Ireland is a world leader in green finance as a new provision in today’s Finance Bill aims to boost green finance business in the forestry sector.In today’s Finance Bill the Irish Government is believed to have become the first government in the world to recognize forest carbon credits in tax legislation – copper-fastening Ireland’s growing reputation as a global leader in green finance.
Finance Bill 2012 will extend the range of “carbon offsets” that an investment company can acquire, to explicitly include forest carbon credits. A consequential amendment to the Stamp Duty Consolidation Act is also being made to accommodate this measure.An Taoiseach (Irish Prime Minister) Enda Kenny, said: “Thisprovision in the Finance Bill is the latest in a series of developments by the Irish Government to ensure Ireland is in the best possible position to capitalize on the financing needs of the future green economy – and attract new business and jobs to our shores as well as give a competitive advantage to indigenous companies operating in this space.”
The forest carbon market is set to soar as UN statistics demonstrate that 20 per cent of the world’s carbon emissions come from forest usually as a result of poor management and so is a key focus in the moves to decrease the globe’s carbon footprint.The UN’s REDD programme – which has been set up to help keep the developing world’s forests intact – is estimated to be valued at $50 billion over the next number of years. This new provision in Irish tax legislation will help the UN reach its targets as it will assist investors operating through the UN programme in the monetization of forest carbon credits.Paul Harris, Member of the Green IFSC Steering Group, explained: “The change is an important contribution to the emergence of the forest carbon bond market as it provides, for the first time, a cost-efficient structure for the monetization of forest carbon credits which should prompt issuers and investors to engage with this element of the developing global low carbon economy.
”He continued: “This should encourage the financial markets to look favourably upon Dublin’s credentials as location for listing of green and environmental bonds and reflects the commitment and expertise of the various Green IFSC working groups – practitioners who understand the tax & regulatory changes that are needed to make Ireland the obvious choice for transacting green financial business.”Enda Keane, CEO of Irish company, TreeMetrics said: “TreeMetrics has world leading forest-measuring technology able to determine the amount of carbon. This is vital information for any company considering buying a forest.
This new tax change gives us, and Ireland, a competitive advantage. In these uncertain times we applaud the Government for its forward-thinking and innovation to come up with these unique changes which give us an edge.“If we can get our forests back on track and run more efficiently that would, obviously, go a long way to reducing the world’s carbon footprint. Anything which validates forest carbon and helps encourage growth in investing in forests is very welcome,” added Enda.He further added that the real benefit of such a move as that in the Finance Bill would be seen in the years to come and that as Ireland had one of the lowest forestation levels in the world (up from 1 per cent at the foundation of the state to 10 per cent today) that it was in an ideal neutral position to be seen as the world leaders in carbon validation and trading in the sector.
The IFSC Clearing House Group, Department of an Taoiseach established the Green IFSC initiative to capitalize on the ever growing area of green finance – and the opportunity is significant. Global investment in clean energy reached a new record of $260bn in 2011, up 5% on 2010 and almost five times the total of $53.6bn in 2004.
In the past two years collaboration between Green IFSC, Government and private sector has resulted in a number of additional tax changes in the area of green finance in a bid to grow business and jobs in the sector.
NOTES TO EDITORS: Other recent tax changes assisted by the Green IFSC include: The inclusion of carbon offsets within the existing structured finance regime – S110, TCA 1997 Relief from stamp duty on transfers of greenhouse gas emissions allowances – S90A SDCA 1999 Extension of corporation tax relief for investments made in renewable energy projects up to 31 December 2014 – S486B TCA 1997 Inclusion of companies involved in production of energy from renewable sources within Income Tax Relief Scheme for Investment in Corporate Trades – Employment and Investment Incentive – S488 TCA 1997
FOR FURTHER INFORMATION CONTACT:
Angela Madden Director of Communications Green IFSC
086 773 2023