Budget 2025 lacks the innovation urgently needed “to make the climate transition fairer and really inclusive”, according to Friends of the Earth (FoE).
The environmental non-governmental organisation welcomed incremental increases in climate investment but lamented “the massive missed opportunity of sinking €500 million into untargeted universal energy credits”.
FoE programme co-ordinator Clare O’Connor said: “Budget 2025 is a missed opportunity in key areas where we wanted to see a step-change in policy and investment. Renters are currently locked out of retrofitting opportunities. We wanted people on housing assistance payments to be made eligible for the Warmer Homes Scheme of fully-funded retrofits.”
The Government did not increase the budget for retrofitting social housing, she said. “It’s still just €90 million a year. They only plan to upgrade 25 per cent of social housing by 2030. There is huge public support for [our] proposal that all social housing should be upgraded by 2030. That’s two groups that the State could do more to bring in from the cold, literally, in the climate transition and despite all the money at the Government’s disposal they have passed up that chance,” Ms O’Connor said.
Budget 2025 main points: Energy credits, bonus welfare payments, higher minimum wage and tax changes
Budget 2025 calculator: How this year’s budget will affect your income
Renters and households with children most likely to have income that doesn’t match needs - ESRI
Households worse off over failure to peg tax and welfare changes to income growth - ESRI
She added: “We are flabbergasted at the astronomical cost of the untargeted universal energy credit of €250 to every household. That will cost €500 million, more than the total retrofitting budget for the coming year.”
More than €3 billion for the Government’s new Infrastructure, Climate and Nature Fund (ICNF) and €1.75 billion in immediate funding for critical infrastructure were the big ticket items on climate and environment spending.
Minister for Finance Jack Chambers announced €750 million for EirGrid to enhance the national grid and help decarbonise the economy, while €1 billion is to go Uisce Éireann to address infrastructure deficits on drinking water supplies and wastewater treatment. These are to “eliminate key infrastructural bottlenecks more rapidly” and will be funded from the Apple tax and AIB shareholding payments to the Government.
A range of measures were announced for renewable energy with record funding for retrofitting and solar PV; enhanced supports and vehicle registration tax adjustments for electric vehicle purchases, notably commercial vehicles; a VAT reduction to 9 per cent on heat pumps; and increased supports for energy efficiency.
The ICNF is to benefit from €3.15 billion between 2026-2030. This was to ensure “money to invest during periods when the economy is not so strong [and] in the climate transition and preparing for a greener future”, Mr Donohoe said.
It will support projects assisting with reduction of carbon emissions, improvement in water quality and to meet nature and biodiversity objectives. “In support of these goals, capital funding for the Department of Environment, Climate and Communications has been increased to over €1.4 billion, allowing for record allocations to be made for investment in energy efficiency and renewable energy,” Mr Donohoe said.
Warmer Homes funding will reach record levels and increase the number of households benefiting and providing for deeper retrofits, he said. “Funding will support up to half of the cost of energy efficiency upgrades being met by the State, complemented by State supported loans.”
To support farmers in becoming more environmentally sustainable, €716 million is being provided in 2025 for those participating in agri-environmental schemes.
Carbon tax is to increase by €7.50 to €63.50 per tonne of CO2, enabling investment of €951 million. Half of this will be invested in improving energy efficiency in homes; while €306 million will support those in fuel poverty. The tax will fund €469 million of Sustainable Energy Authority of Ireland residential and community energy upgrades.
Minister for the Environment and Climate Eamon Ryan said: “There is a sea-change in how we view the environment and this record investment for the department represents a real commitment to making sure that climate action is working for each and every household in Ireland.”
