Budget 2025 contained the highest-ever financial allocation for the Department of Environment as the Government also confirmed an increase in the carbon tax on fossil fuels.
The rate of carbon tax levied on fossil fuels will increase by €7.50 to €63.50 per tonne of carbon dioxide emissions as part of measures announced in Budget 2025.
It will add €1.28 to an average fill of petrol and €1.48 to a fill of diesel from Wednesday next week.
From May next year, it will add €0.89 to a 40kg bag of coal, €19.40 for 900 litres of home heating oil and €16.86 to a typical annual gas bill.
The installation of EV charges by employers at their workers' homes is to be exempted from Benefit in Kind Tax.
The rate of VAT for heat pumps is to decrease from 23% to 9%.
A €99 million financing package will allow the Port of Cork to develop the port infrastructure needed to support the construction of offshore wind farms.
Vehicle Registration Tax rate on low emissions smaller goods vehicles is being cut to 8% from 13.3%.
Electric commercial vehicles will qualify for the very low €200 rate of Vehicle Registration Tax.
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Highest ever Budget allocation for Dept of Environment
Minister for the Environment Eamon Ryan said the allocation for the Department of the Environment, Climate and Communications demonstrates the Government's commitment to achieving a climate-neutral, sustainable and digitally connected Ireland.
The measures included:
- €250 in Electricity Credits to go to over two million households this winter
- Record funding of €469m for retrofitting and solar PV.
- €400m to continue the roll-out of the National Broadband Plan.
- €750m to develop the electricity grid.
- A reduction to 9% in the VAT rate for heat pumps.
The minister said supporting families and communities, and underpinning Ireland’s journey to a net-zero future.
Two Electricity Credits of €125 each will be applied to domestic electricity bills.
One will come before Christmas and one during the January/February 2025 billing cycle.
The overall cost of this measure is almost €570m.
Minister Ryan said it will be part-funded from the measures introduced to address the windfall profits of some fossil fuel companies.
The €469m for retrofitting and residential and community energy upgrades is funded from the Carbon tax.
This represents an €89m increase compared with last year.
This will be supplemented by an increased allocation from the European Regional Development Fund so that the overall budget for the Warmer Homes Scheme budget will be €240m.
This scheme provides free, fully-funded energy upgrades for low-income households at risk of energy poverty.
The 2025 allocation for this scheme represents a ten-fold increase on the 2020 expenditure figure.
Funding has also already been provided to further implement the Home Energy Upgrade Loan Scheme, which provides low-cost retrofit loans with interest rates available from 3 per cent.
Budget 2025 will also fund a continued expansion of resources for the National Cyber Security Centre, including an additional 30 staff.
The Minister said the Government is committed to ensuring that no sector of society or community is left behind in the movement to a low-carbon future.
To this end €51.7m has been secured, to continue delivery during 2025 of Ireland’s EU Just Transition Fund Programme 2021-2027 in the Midlands counties most affected by the ending of peat extraction.
In addition to these measures the Budget confirmed that the proceeds of the sale of the State’s AIB shares will provide for an initial direct equity injection of €750m to develop Ireland’s electricity infrastructure and, in particular, to support Phase I of offshore grid development.
Commenting on Budget 2025, Minister 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.
"Further Electricity Credits are helping people through the coldest months, while the highest ever budget for the Warmer Homes Scheme will provide home energy upgrade supports for those who can least afford it, and help to address an underlying cause of energy poverty.
"Budget 2025 will see the allocation for this scheme – providing free upgrades for low-income households – rise to 10 times what it was in 2020.
"We also know that our climate transition needs to be fair for all, and I’m delighted to secure significant funding to continue the delivery of the EU Just Transition programme in 2025, supporting midlands communities.
"I also welcome further clarity on a process for ensuring that €3.15 billion of the Infrastructure, Climate and Nature Fund will be invested in the transition to climate neutrality and in nature restoration.
"I believe the two areas where the certainty of multi-annual funding can have a real impact are the development of renewable heat supply and demand markets, and enhanced building energy efficiency. These are areas my Department will focus on, as we engage in this process."
Minister of State with responsibility for Communications and Circular Economy Ossian Smyth said the National Broadband Plan is one of the "most successful and impactful infrastructure projects in the history of the State".
He said: "I have secured funding of €400 million in Budget 2025 – to support the continued rollout and delivery of this transformative project. This will ensure that the benefits of the digital transition are felt right across the country – in every home, farm and school. I have also secured additional funding – in Budget 2025 – for the continued expansion of resources for the NCSC (National Cyber Security Centre), including an 30 additional staff.
He also announced €127m of funding for programmes to "continue our transition to a circular economy" which, he said, play a "fundamental role to enable us to meet out national climate targets for 2030 and 2050".
Minister of State with responsibility for Postal Policy James Lawless said he was pleased to announce that €10m to be allocated for post offices and postmasters for 2025.
"This affirms our commitment in the Programme for Government, and underscores the fundamental and integral role that the post office network plays in our country," he said.
