Ireland has failed to meet its emissions reduction target under the first carbon budget cycle, overshooting the limit by approximately 10 million tonnes, according to the Climate Change Advisory Council.
The first carbon budget, covering 2021 to 2025, set a legally binding ceiling of 295 million tonnes of emissions. The Council’s latest review confirms the country will exceed this limit, creating an additional burden that must be repaid during the next budget period from 2026 to 2030.
Stricter Targets Ahead
The overshoot makes achieving future targets increasingly challenging. Ireland is permitted to produce 200 million tonnes of emissions between 2026 and 2030, dropping further to 151 million tonnes between 2031 and 2035.
Progress in the agriculture and transport sectors, which together account for approximately 55 percent of Irish emissions, has been “particularly slow and challenging,” the review states. The Council called for increased public transport spending and expanded grants for affordable electric vehicles.
Potential €26 Billion Penalty
Ireland also remains “substantially off track” in meeting EU Fit for 55 targets, which aim to reduce the bloc’s greenhouse gas emissions by at least 55 percent by 2030 compared to 1990 levels.
The country has failed to transpose key elements of the Renewable Energy Directive and Energy Efficiency Directive, despite these being implemented across many EU member states. Ireland also missed the 30 June 2025 deadline to submit a social climate plan under the Social Climate Fund Regulation.
Failure to meet these EU obligations could result in compliance costs ranging from €8 billion to €26 billion, the Council warned.
Fossil Fuel Dependence Remains Main Obstacle
The Council identified Ireland’s continued reliance on fossil fuels as the primary barrier to progress. Last year, fossil fuel subsidies totalled €4.7 billion, including nearly €1 billion in temporary measures responding to energy price increases, such as energy credits.
While these subsidies prevented some households from falling into arrears, the Council described increased fossil fuel subsidization as “an overtly short-term and blunt policy instrument that highlights the need to support a just energy transition.”
Environmental taxes collected €5.5 billion in 2024, with households paying an estimated €3.4 billion, up from €3 billion in 2023. However, in 2023, households received only €408 million, or 14 percent, back in subsidies.
“The net effect of these measures is that they are encouraging the increase rather than reduction of greenhouse gases through the tax system,” the Council stated.
Energy Poverty Crisis Deepens
The review highlighted energy poverty as a “significant issue in Ireland,” noting that 13 percent of domestic electricity customers were in arrears in May this year, matching the highest recorded rate from October last year.
The Council criticized universal subsidies and indirect tax cuts as poorly targeted, arguing that most revenue goes to compensating high-income households least affected by rising costs. It recommended improved welfare payments and increased Pay Related Social Insurance credits as more effective alternatives.
The Energy Poverty Action Plan, published in December 2022, outlined measures to support households with energy costs. However, despite a consultation on a revised plan closing in May 2024, an updated version has yet to be approved or published by the government.
Urgent Action Needed
Council chair Marie Donnelly acknowledged progress in home retrofitting and renewable energy development but emphasized the need for fundamental changes. “We need to redesign how we commute, heat homes, and power the economy. That means real investment in people, infrastructure, and communities, not more delay,” she said.
“We have the opportunity and the resources to transform Ireland, both in terms of reducing emissions and preparing for future climate events. We must act now because if we don’t, we will pay the financial and societal price by losing out on secure and affordable energy, a healthier and more sustainable society, both today, and for future generations.”
The Council called on the government to “urgently publish” the revised Energy Poverty Action Plan and conclude work on the Social Climate Plan. It recommended that future supports be targeted specifically at vulnerable households, those in fuel poverty, low-income families, and renters without access to retrofit grants.