Ireland could face a hefty compliance bill of up to €26 billion if it fails to meet its greenhouse gas emissions reduction targets, according to a joint report from the Irish Fiscal Advisory Council (IFAC) and the Climate Change Advisory Council (CCAC). The warning highlights the urgent need for action, urging the government to implement stronger climate policies or risk significant costs in the future.
The report outlines the possible costs Ireland could incur due to its underperformance in meeting its EU climate obligations, particularly under the Effort Sharing Regulation. This EU framework sets binding emissions reduction targets for sectors like road transport, agriculture, and waste, with wealthier nations facing stricter goals. Countries failing to meet their targets must purchase carbon credits from those who exceed their goals. Given the potential scarcity of credits by 2030, prices are expected to spike, leading to a financial burden on lagging nations like Ireland.
Currently, Ireland’s emissions reduction is projected at only 29% by 2030, far short of its 51% target. This leaves the country with the highest emissions gap per capita in the EU—8.7 tonnes of CO2 per person—making it one of the least likely to meet its 2030 target.
To avoid these potential costs, the report emphasizes that Ireland must act swiftly. While the government’s Climate Action Plan could reduce costs by between €3 billion and €12 billion, its current pace of implementation is deemed insufficient. IFAC chair Seamus Coffey urged that timely investments in clean energy infrastructure, electric vehicles, and other sustainable initiatives could prevent significant future financial losses.
Government leaders, including Taoiseach Micheál Martin, have defended the country’s progress, pointing to recent emissions reductions and upcoming investments in the electricity grid and offshore wind energy. However, the report underscores that Ireland must scale up its efforts to transition to a climate-neutral economy or risk paying a heavy price in the years ahead.
In the words of Marie Donnelly, CCAC chair: “The government must take clear and decisive action now to transition to a climate-neutral economy,” emphasizing that early investment would be far more cost-effective than paying compliance fees later.
Ireland now stands at a crucial crossroads—its future climate strategy will determine whether it can avoid billions in penalties and ensure a sustainable, low-carbon future.
