The Government has approved its streamlined Climate Action Plan 2025 (CAP25), the fifth overall update to the plan and the third since Ireland committed in law to reducing its greenhouse gas emissions by 51% by 2030 (relative to 2018 levels) and achieving climate neutrality by signing the Climate Action and Low Carbon Development (Amendment) Act 2021.
Intended for publication in December 2024, formal approval of CAP25 was delayed due to the election. As such, its substantive drafting preceded the current coalition.
Climate Targets
Sectoral Emissions Ceilings
Ireland's overall emissions reduced by 7% in 2023, with the electricity sector driving this downward trajectory, a 17% reduction in emissions in the first half of 2024 demonstrating the effectiveness of renewable generation and interconnectivity. Agricultural emissions decreased by 4% over the past year, mostly due to reduced purchasing of nitrogen fertilizer by Irish farmers, while transport emissions increased by 0.3%. Remaining within the sectoral emissions ceiling, ie the maximum amount of greenhouse gas emissions that are permitted in a sector of the economy during a carbon budgetary period, for transport would now require an unprecedented 12.4% decrease in emissions in both 2024 and 2025. Electric vehicles and the use of biofuels are stated as the best means of transport emission reductions in the medium term.
Renewable Electricity Targets
Ireland has set a series of ambitious targets to increase the amount of power it generates from renewable sources.
However, it is some way from fulfilling its target capacity allocations in each category. To meet 2030's targets, an additional 4,333MW of onshore wind and 7,555MW of solar generation is required by 2030 compared to 2023 levels. This is in addition to the Government target to build out the country's offshore wind resources from a mere 25MW as of 2023 to the targeted 5GW. In support of this ambitious target, EirGrid, Enterprise Ireland and IDA Ireland have recently signed an MoU to collectively support offshore wind development in Ireland.
Financial Implications
Beyond the socio-environmental/planetary repercussions, the monetary costs of failing to attain 2030's statutory targets are severe, with the Department of Environment Climate and Communications (DECC) estimating in 2023 that fines could amount to €8.1 billion and the Irish Fiscal Advisory Council in 2024 calculating a potential €20 billion price for non-compliance.
Actions
CAP25 is the final plan of the first carbon budget before the second carbon budget period of 2026-2030, marking the midway action plan in what has been dubbed "the decade of climate action" by the United Nations. In addition to building on actions from previous iterations (including CAP24, which we discussed here.), CAP25 announced a number of new sector specific actions, some of which are outlined below.
Electricity Sector: Interconnection & LDES
An Offshore Transmission Strategy is in preparation and a third interconnector, in addition to the Greenlink interconnector which has been commercially operational since January and the Celtic Interconnector which is intended to be energised in 2026, is expected to be commissioned by 2030. In this regard, CAP25 notes the joint statement on potential interconnection opportunities signed by Ireland, Belgium and the U.K and that EirGrid and the French transmission system operator are examining the potential for a second Ireland–France interconnector.
Publication of a Long Duration Energy Storage Procurement recommendations paper is targeted for 2025, while the development of consumer-led flexible demand processes remain an objective. In terms of generation, CAP25 notes that the next Offshore RESS auction will be focused on a development area in the South Coast Designated Maritime Area Plan.
Industry
CAP25 outlines cement and construction decarbonisation and carbon-neutral heating as areas requiring particular attention in the industrial sector. The implementation of measures proven efficient at emission mitigation to date such as electrifying manufacturing processes, the use of biogas for heating and fuel switching in the cement sector are to be increased.
The EPA's WEM scenario in their Greenhouse Gas Emissions Projections 2023-2050 shows the industry sector's emissions are to exceed the carbon budget by ~3 MtCO2eq in the period 2021-2025, and ~7 MtCO2eq in the period 2026-2030. In 2023, combustion for heat was the main source of industry emissions at 4.1 MtCO2eq. It is anticipated that the Government's long-awaited Renewable Heat Obligation (RHO) Scheme will be implemented in late 2025 or early 2026 and this will be a key pillar in supporting Ireland's attempts to generate an indigenous source of renewable gas for heat.
Buildings
The transposition of the Energy Performance of Buildings Directive (EPBD) has been targeted for 2025 alongside the publication of a roadmap to phase out fossil fuel boilers, pursuant to Article 17(15) of the EPBD.
In line with Article 3 of the EPBD, DECC will develop a National Building Renovation Plan to target the transformation of the existing national stock of residential and non-residential buildings into highly energy efficient zero-emission buildings by 2050.
District heating deployment at scale is a key objective, with the proposed Heat Bill (which we discussed here) set to actualise this ambition.
2023 saw positive uptake in the National Retrofit Plan, with capital expenditure up 68% on 2022 spend at €324.5 million and the number of home energy upgrades increased by nearly a third with 47,952 rolled out across the country.
Energy Poverty
A record budget of €240 million was provided to the Warmer Homes Scheme in Budget 2025, offering free energy upgrades to eligible homeowners most at risk of energy poverty. Following public consultation, a revised Energy Poverty Action Plan will be published to set out a wide range of clear actions aimed at tackling energy poverty.
EU funding through the Social Climate Fund, introduced as part of the Fit for 55 framework, will provide up to €663 million for Ireland over the period 2026-2032 to invest in support for vulnerable groups in the energy transition.
Public Sector
The public sector is implementing an updated Public Sector Climate Action Mandate for 2025 which strengthens requirements around building retrofitting, sustainable operations and green public procurement.
As only 42% of public sector bodies submitted their mandatory Climate Action Roadmap to SEAI in 2024, an enhanced programme of engagement is planned to increase completion rates.
Investment
With Ireland's climate finance expenditure estimated to have exceeded €181 million in 2024, the Government is confident in expending its 2025 target of €225 million.
Budget 2025 allocated €951 million in carbon tax revenues to support Ireland's low-carbon transition through socially progressive programmes, representing a €163 million increase from 2024.
Ireland's Irish Sovereign Green Bond programme raised significant capital market funding for allocation into climate related investments in 2023 with the most recent allocation report listing €521 million of allocations to eligible green projects, representing 15.3% of climate and environmental related expenditure in 2023.
Planning
CAP25 acknowledged the importance of a vertically integrated planning policy to meet national climate objectives and that a revised and strengthened National Planning Framework (approved by Government last week) and Planning and Development Act 2024 are legislative priorities. Updated National Policy Objectives in the revised National Planning Framework are said to "strengthen alignment between planning and spatial policy and Ireland's carbon budget framework".
Further to the commencement of Section 29 of the Planning and Development Act 2024, each "Regional Assembly" will be required to prepare a Regional Renewable Energy Strategy (RRES) as part of a wider review of the Regional Spatial and Economic Strategy, whereby additional detail can be outlined as to how the regional renewable electricity capacity allocations for the region can be best achieved, including the identification of specific minimum targets for each of the constituent local authorities. These strategies will in turn inform City and County Development Plans.
Other Sectors
Of note in regards to the Circular Economy, a National Exploration Programme for Critical Materials is to be developed. For the Marine Environment, the publication of Ministerial guidelines on DMAPs and a Marine Planning Policy Statement are targeted to protect Ireland's marine environment while supporting the development of its offshore wind potential.
In relation to "LULUCF" (land use, land use change, and forestry), Phase 2 of the Land Use Review is due to report in 2025, which will inform the development of future policy in a sector which is currently a carbon source as opposed to potential sink. New Sectoral Adaptation Plans are to be completed by Q4 2025 by the previous priority sectors under the National Adaptation Plan, alongside a new Planning and Built Environment sector.
High Level Takeaways
- Ireland is behind on its 2030 climate targets.
- Planning reform and increased electrification mentioned as notable objectives.
- Like CAP24, possible CAP25 will face judicial review challenge and delay.
Next Steps
It is worth noting that CAP24, approved by Government in December 2023, is still the subject of a Judicial Review challenge which we don't expect to be heard until around Q4 this year. CAP23 was also challenged by Judicial Review. It is therefore possible that CAP25 will be similarly challenged which will then likely cause delays to planning permission for energy infrastructure.
CAP25 is available to view in full here.
Contributed by Matthew Smith
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