Budget lacks the innovation we need to make the climate transition really inclusive

Incremental increase in existing schemes is welcome but untargeted energy credit a massive missed opportunity

Friends of the Earth has expressed frustration that today’s Budget didn’t include enough innovative measures to make the climate transition more inclusive and fairer. The environmental campaigning organisation did welcome incremental increases in climate investment but lamented the massive missed opportunity of sinking €500 million into untargeted universal energy credits.

Clare O’Connor, Programme Coordinator with Friends of the Earth 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.

And the Government has not increased the budget for retrofitting social housing. It’s still just €90 million a year. They only plan to upgrade 25% of social housing by 2030. There is huge public support for Friends of the Earth’s 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.

Meanwhile 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.

The €250 untargeted energy credit is just not an efficient use of taxpayers' money. You could have doubled the total funding for the Warmer Homes Scheme and still given everyone a €125 credit. 

And the Government has repeatedly refused to extend the Fuel Allowance to the 50,000 families on the Working Family Payment, many of whom are at high risk of energy poverty. That would only cost €80 million. It would help keep those families warm this winter and it also makes them eligible for the Warmer Homes Scheme, giving them a path to a retrofitted home with cleaner air and lower fuel bills.”

 

Friends of the Earth did welcome various incremental measures in Budget 2025, but there is room for more transformative change:

• The reduction in VAT on heat pumps to 9% is a good step. Ireland has one of the lowest rates of renewable heat in Europe and any measure that helps change that is welcome.
  
  
• The extension of free public transport to 6,7 and 8 year olds is welcome. We would like to see that extended to all children under 16.
  
  
• The €750 million from one-off revenue for investment in the electricity grid is welcome, as long as the focus is on renewables to heat our homes and power our transport rather than facilitate ever more data centres to colonise our power system.
  
  
• The increase in retrofitting funding to €469 million is welcome and particularly the €240 million for the fully funded home energy upgrades for lower income households. It is really significant this Warmer Homes Scheme is now 10 times bigger than it was in 2020.
  
  
• It is good to see that the annual €2 billion investment in the Infrastructure, Climate and Nature Fund is on track and that preparations are beginning to decide how to spend the €3 billion that can be spent on climate projects from 2026-2030, when we face the daunting challenge of reducing our pollution in line with our legally binding national and EU emissions ceilings.

 

Commenting, Friends of the Earth chief executive, Oisín Coghlan, said:

“As attention turns from the Budget to the General Election we’ll be pushing all parties to detail how they will cut our pollution fast enough to stay within the legally binding limits agreed on a cross-party basis during this Dáil and fairly enough to reduce poverty and inequality as we do it.”

 

ENDS