Written answer
Climate Change Policy
The Minister said Ireland is projected to miss its 2030 emissions target significantly, with potential allowance-purchase costs uncertain because no market or fixed price exists.
8. Deputy Paul Lawless asked the Minister for Climate, Energy and the Environment if his attention has been drawn to a report issued by the Irish Fiscal Advisory Council titled the Hidden Costs of Inaction July 2026, which warned of the costs Ireland will face in financial penalties if we fail to meet our climate targets; if he will outline the likely costs; and the margin by which costs are projected to be missed. [64910/26]
Comment on this
Ireland has committed to meeting climate targets under EU legislation including but not limited to:
• Effort Sharing Regulation; and
• the Land Use Land Use Change and Forestry Regulation.
It remains the preference of the Government to meet these targets through domestic action and investment, but there are a variety of compliance options available to Member States across the respective instruments.
Under the revised Effort Sharing Regulations (ESR), Ireland’s target to reduce emissions is set at 42% compared to 2005 levels by 2030. According to the Environmental Protection Agency’s recent update, as of May 2026, Ireland is projected to achieve a reduction of 12.7% on 2005 levels by 2030 under the With Existing Measures (WEM) scenario, while the With Additional Measures (WAM) scenario projects a reduction of 23.4% over the same period.
Within the existing framework, Member States are encouraged to meet their targets through direct emissions reductions. While the ESR framework does not provide for the imposition of direct fines or penalties it does allow for the use of additional compliance measures. This includes the purchase of surplus allowances from Member States who have overperformed on their national targets.
The Department is keenly aware that as there is no fixed price or price cap per allowance for inter-Member State trading, significant costs may arise for Member States in the event that the purchasing of allowances becomes necessary. Furthermore, no market currently exists for purchasing allowances. The first compliance check only begins in Q2, 2027. It is only then that the supply and demand picture will become clearer.
Estimating these costs requires working with significant data limitations, in comparison to the estimate costs of domestic climate mitigation and adaptation measures. This was acknowledged by the Irish Fiscal Advisory Council (IFAC) in their multiple reports on the matter.