Eoin Hayes (Dublin Bay South, Social Democrats)
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574. To ask the Minister for Finance his views on the public and private financial resources required and available to support his Department’s plans to meet Ireland’s climate targets by 2030; and if he will make a statement on the matter. [19096/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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In line with the Programme for Government 2025: Securing Ireland’s Future, the Government is fully committed to the emissions reduction targets set by the Climate Action and Low Carbon Development Act . The annual Climate Action Plans set out a pathway that seeks to deliver on this and to implement the adopted carbon budgets and sectoral emissions ceilings, with the latest version of the Climate Action Plan published earlier this month. My Department supports the Government’s climate agenda and will continue to contribute positively to the achievement of Ireland’s emission reduction targets.

In particular, my Department has an important role to play across a range of climate action areas and I am committed to ensuring that these are delivered successfully in line with the Department of Finance’s Statement of Strategy which includes ‘promoting environmentally sustainable economic progress’ as one of the Department’s five strategic goals.

As Deputies will be aware carbon pricing and environmental taxation has an important role to play in supporting the green transition. The Carbon Tax was originally introduced in 2009 and today, in line with the policy approach of the Programme for Government, it is subject to a legislative trajectory which provides for annual increases in the rate rising to €100 per tonne of carbon by 2030.

Revenue raised from increases in the carbon tax since the year 2020 is ring-fenced and allocated for expenditure on Just Transition, national retrofitting programme and supporting farmers in their green practices. €951 million was allocated as part of Budget 2025 to climate action measures, sustainable farming and to ensure the most vulnerable are protected from unintended impacts of the tax increase. This represents an increase of €163 million on the amount funded from the Carbon Tax increases in 2024.

Our vehicles tax system also has a strong environmental rationale and since 2008 both the Vehicle Registration Tax (VRT) and motor tax are calculated on an emissions basis. Therefore, Electric Vehicles are subject to lower rates of tax compared to conventional internal combustion engine vehicles. Additionally, battery electric vehicles are currently granted VRT relief of up to €5,000. The current motor tax regime incentivises lower emission cars, with rates as low as €120 for electric vehicles (EVs).

Another important piece of climate-related work my Department has been involved in is the establishment of the two long term funds: the Future Ireland Fund and the Infrastructure, Climate and Nature Fund (ICNF), with the Act introducing them enacted on 18 June 2024. Up to €3.15 billion in the ICNF is being set aside for the multi-annual funding of designated environmental projects over the period 2026 to 2030. The eligible project criteria are outlined in the legislation, where a project contributes directly or indirectly to the achievement of a reduction in greenhouse gas emissions and a range of water-related and nature/biodiversity objectives.

I will also mention the important role of the National Treasury Management Agency in contributing to the funding of climate projects in tandem to supporting the broader green financing needs of the State. Through its funding and debt management function the NTMA, on behalf of the State, has issued Irish Sovereign Green Bonds (ISGBs), with the proceeds allocated to eligible green projects. Since the launch of ISGBs in 2018, a total of €11.3 billion has been allocated.

The Strategic Banking Corporation of Ireland (SBCI) is also undertaking important work which is supporting low carbon and green investments. This includes though delivering the Growth and Sustainability Loan Scheme, launched in September 2023. This scheme for SMEs, including primary producers and small mid-caps, makes €500 million in loan funding available to enable investment in growth and sustainability. Up to 30% of the lending volume under the scheme is reserved for investment in sustainability and energy efficiency. These “green loans” also attract a special discounted interest rate. The SBCI also launched, on 24 April 2024, the Home Energy Upgrade Loan Scheme, targeting homeowners and small landlords in support of the Government’s retrofitting targets. The objective of this policy intervention to stimulate the delivery of up to 25,000 additional deep home energy retrofits over three years with a €500 million lending capacity funded by the Department of Climate, Environment and Energy with lending between €5,000 and €75,000 per property. All three major Irish banks have joined the programme which was recently extended to a number of credit unions.

In September 2024 the SBCI and Business Venture Partners (BVP) also announced the launch of a new €50 million financing initiative, the “Green Transition Finance Product”, which benefits from the provision of the InvestEU Sustainability Guarantee Product Programme. This innovative debt fund is designed to support the green and sustainable transition of SMEs and small Mid-Caps operating in Ireland.

As part of the whole-of-Government approach to address the actions outlined in the Government’s Climate Action Plan 2025, my Department is working with other Government Departments, agencies, and other stakeholders in a co-ordinated manner through a Climate Research and Modelling Group chaired by the Department of the Taoiseach in order to guide the targeted reductions in overall greenhouse gas emissions by 2030, and reach net-zero emissions by no later than 2050.

To this end, my Department has joined a Joint Research Programme with the Economic and Social Research Institute to advance the macroeconomic and fiscal analysis of climate change using the Institute’s I3E (Ireland, Environment, Energy and Economy) computable general equilibrium model. The aim is to have the I3E model sufficiently developed and linked in with other models so to have robust estimates detailing the Macro-Economic impacts of the low carbon transition.

The financial services sector also has a pivotal role in facilitating such activities and accelerating the implementation of Ireland’s Climate Action Plans and transition to net zero. For many years, Ireland has strategically prioritised the development of our sustainable finance sector, as a key component of its broader international financial services strategy, Ireland for Finance, and in our engagement at EU level. In this field, my Department is dedicated to fostering a robust and transparent regulatory environment for sustainable finance, advocating for ambitious standards that are also practical and navigable for businesses particularly in light of recent streamlining efforts such as the Omnibus Simplification that is underway.