Wednesday, 08 October 2025
Ireland Could Face up to €26 Billion in Climate Compliance Costs, Says C&AG Report Ireland could face climate-related compliance costs of between €3 billion and €26 billion by 2030 if it fails to meet its legally binding emissions reduction targets, according to a new report by the Comptroller and Auditor General (C&AG). The report highlights […]
Ireland could face climate-related compliance costs of between €3 billion and €26 billion by 2030 if it fails to meet its legally binding emissions reduction targets, according to a new report by the Comptroller and Auditor General (C&AG).
The report highlights serious concerns over the State’s ability to reach its national and EU climate commitments and warns of wide-ranging legal, financial, and political consequences.
Under Irish and EU law, Ireland must reduce its total greenhouse gas emissions by 51% by 2030, compared to 2018 levels, and reach climate neutrality by 2050.
However, the Environmental Protection Agency (EPA) projects that even with full implementation of all planned climate policies and measures set out in the Climate Action Plan, Ireland will only achieve a 23% reduction by 2030. This is down from a 29% reduction projected last year, widening the gap to the 51% target.
From 2018 to 2023, Ireland achieved only a 10.3% reduction in overall emissions, far short of the progress required.
The C&AG report warns that if Ireland fails to meet its national emissions targets, the country may need to purchase emissions allocations from other EU member states. These purchases would be necessary to comply with binding EU requirements and could lead to significant costs for the exchequer.
The estimated compliance-related costs range from €3 billion to as much as €26 billion by 2030, depending on how far Ireland falls short of its targets and how expensive credits become. These costs are not direct “fines,” but financial penalties in the form of market-based mechanisms and legal obligations.
One key issue highlighted by the C&AG is the unclear division of responsibility among government departments. Six departments share responsibility for achieving the national climate objectives:
Department of the Environment, Climate and Communications
Department of Transport
Department of Enterprise, Trade and Employment
Department of Agriculture, Food and the Marine
Department of Housing, Local Government and Heritage
Department of Public Expenditure, NDP Delivery and Reform
However, the report notes it is still unclear which department(s) would ultimately bear the costs if Ireland fails to deliver on its emissions targets.
Ireland has adopted a system of carbon budgets, legally binding limits on total emissions for defined periods (e.g., 2021–2025, 2026–2030). These are enforced through the Climate Action and Low Carbon Development (Amendment) Act 2021. While these budgets are an important accountability tool, many sectors are lagging in their required reductions.
The recent C&AG report raises questions about whether these budgets will be respected in practice, given current performance. If sectors exceed their budgets, cross-sector compensation or further cuts will be required later, increasing political and economic pressure.
The report criticises the lack of clarity in how the Government monitors progress on climate action. It finds a disconnect between tracking financial investments in climate-related expenditure (through green budgeting) and actual progress in meeting the Climate Action Plan’s emissions targets.
This may hinder the effective prioritisation of funding towards initiatives with the highest emissions-reduction potential.
In 2023, Ireland emitted 58.8 million tonnes of CO₂-equivalent across 11 sectors, including land use. Agriculture was the largest emitter, followed by transport.
Additionally, the Government previously spent over €118 million acquiring nearly 12 million carbon credits to meet obligations under the Kyoto Protocol, which applied during the periods 2008–2012 and 2013–2020.
However, due to EU policy changes under the 2009 Effort Sharing Decision, 702,000 of these credits could not be used and were effectively written off.
While projected compliance costs are estimated at up to €26 billion by 2030, the longer-term economic cost of inaction could be significantly higher. These include:
Greater adaptation costs due to climate-related flooding, droughts, and sea level rise
Health impacts from poor air quality and climate-induced stress
Lost opportunities in green industries and innovation
The transfer of financial burdens to future generations
By delaying deep emissions cuts now, Ireland may be shifting both environmental and economic liabilities to younger citizens, raising issues of intergenerational justice and equity.
Ireland is significantly off track to meet its 2030 climate targets, even with the full implementation of current policies. The financial consequences of non-compliance could be severe, with liabilities possibly reaching up to €26 billion.
The C&AG urges more effective oversight, clearer responsibility among departments, and better alignment between investment and actual emissions reductions.
Without urgent and coordinated action, Ireland risks failing not just its legal climate commitments but also incurring substantial economic costs.
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