Sustainability
Finance Bill 2024
Measures not announced in Budget 2025
The Budget outlined a wide range of capital budgets and levers to assist Ireland in meeting its climate obligations and objectives. Reflecting the unique opportunity of the budget surplus and other one-off revenue sources the Budget is one which has a greener future at its core. Significant funding has been earmarked for the “Ireland of tomorrow” through the Infrastructure, Climate and Nature Fund, a €750M investment in grid infrastructure, capital funding for the Department of Environment, Climate and Communications, and an investment by ISIF in infrastructure to aid in the deployment of offshore wind projects. These were not referenced in the Finance Bill.
What was unexpected?
No surprises in the bundle of tax changes which will impact on Ireland's decarbonisation journey. Measures relating to incentivising clean transport have been delivered through a range of reliefs for employers and businesses. The majority of this year's budget promises on the sustainability side came in the form of pledges to increase capital expenditure in meaningful ways to continue to support clean infrastructure. Opportunities to promote real investment in businesses who are championing green energy and technologies (where they are not considered "innovative") have been missed and we believe there is a need, along with government spending, to promote capital investment in the private sphere through the use of the tax system.
Who will be affected?
The country as a whole will be impacted by the measures and funding announced in the Budget that will hope to stimulate the market to aid in the deployment of sustainable infrastructure.
Our view
Under the EU’s Effort Sharing Regulations (ESR) Ireland’s target reduction of its greenhouse gas emissions is at least 42% by 2030. The EPA’s projections in May 2024 indicate that current measures will achieve only a 9% reduction. While the budget announced significant capital investment in the national electrical grid and water infrastructure, there was a distinct lack of announcements that can incentivise businesses and taxpayers to decarbonise. To achieve these targets businesses and the wider population will have to make significant changes to their existing ways of working. These changes must be incentivised through a variety of tax and grant incentives.
The first significant milestone of 2030 is fast approaching, and continued inaction will ensure that Ireland misses its targets by a wide margin. Investment in sustainability and decarbonisation is essential to facilitate the further growth and development of the nation. This will require a variety of tax reforms and incentive policies that, while not universally popular, will be essential to ensure Ireland’s transition to a carbon neutral economy.
