Budget 26: Statement by Minister Darragh O'Brien to Dáil Éireann

Ceann Comhairle, colleagues, I am pleased to discuss next year's Budget across both the Department of Transport and the Department of Climate, Energy and the Environment. Overall, Budget 2026 provides for almost €6 billion in investment in these two departments.

Fundamentally, this government knows that a strong economy is vital to creating a flourishing society, providing opportunities for our citizens and providing the resources we need to provide important social services. This has been reflected in both the Department of Transport and the Department of Climate, where I have prioritised measures to accelerate Ireland's green transition and to provide better services to citizens across the country.

Turning first to the Department of Transport, I am pleased to confirm that the budget for next year will be €4.74 billion, an increase of €840 million relative to last year.

A key highlight is the unprecedented increase of over 43% in the core allocation for Public Service Obligation transport, now standing at €940 million. This ensures continued support for subsidised bus and rail services, ferry links to remote communities, and regional air services—such as the vital Donegal to Dublin route. These services are not just about transport—they're about connectivity, inclusion, and social cohesion, especially for those in rural areas and those who rely on public transport every day.

In 2024, we reached a milestone of 1 million daily journeys and 343 million public transport journeys for the year—a 10.6% increase from 2023.

We have recently extended free transport to include children under the age of 9 and introduced free travel for over 70’s companion.

Together, these measures provide a firm foundation to advance the government's commitment to establishing a sustainable funding model for the Public Service Obligation programme as set out in the Programme for Government.

Disability measures in Transport

As committed in the National Human Rights Strategy for Disabled Persons, we are providing record levels of funding toward the accessibility retrofit programme to fund upgrades to older facilities. All new public transport infrastructure and vehicles are designed with accessibility in mind. Last week, I convened the Ministerial Accessible Transport Forum - meeting disability groups to discuss the priority transport actions.

Major Public Transport Projects

We are also progressing transformative infrastructure projects, each designed to provide better transport options to passengers and decarbonise our transport system. These include:

• The DART+ programme continues with fleet testing, infrastructure development in Drogheda, and procurement for DART+ West.
• In Cork, Phase 1 of the Area Commuter Rail Programme advances with double tracking and e-signalling.
• And in Dublin, construction begins on two BusConnects Core Bus Corridors.

Road Network and Safety

An increase of €211 million brings the allocation for national and regional and local road networks and road safety measures to €1.72 billion.

This supports:

• Maintenance and repair of roads and bridges
• Strategic projects like the M50 upgrade, N5 Ballaghaderreen to Scramoge, M28 Cork to Ringaskiddy, and N21/69 Limerick to Foynes, including the Adare bypass
• Continued progress on NDP [National Development Plan] schemes such as the Tralee Northern Relief Road and Coonagh to Knockalisheen Distributor Road
• €10m for 99 new EV recharging hubs across Ireland’s national primary and secondary roads to ensure drivers are never more than 30km from a high-powered charging point.

We have surpassed our target to have 195,000 EVs on the road by the end of 2025 – we now have 196,000 on Irish roads.

To support this rollout, the VRT [Vehicle Registration Tax] relief €5,000 for EVs will be extended for another year and BIK [Benefit in Kind] regime is being modified to ensure EVs are specifically ring-fenced for preferential rates.

Active Travel, Aviation and Maritime

Active travel remains a priority, with €362.6 million allocated for walking and cycling infrastructure, including Greenways and Safe Routes to School, in which there are currently 412 schools participating.

In aviation, €39.6 million will support regional airports and ensure continued connectivity across Ireland.

€162.5 million is allocated to the Irish Coast Guard and Maritime sector, which Minister Canney will also reference.

Turning next to the Department of Climate, Energy and the Environment, next year will see almost €1.1 billion in direct state investment. This is in addition to the €3.5 billion which the state will provide in equity investment to ESB and EirGrid to strengthen and upgrade our vital energy infrastructure. Next year's budget allocation will accelerate the clean transition across homes and the energy sector.

Energy Affordability and Retrofitting

High energy prices create pressure on households and harm Ireland's economic competitiveness. Early this year, I established the National Energy Affordability Taskforce to examine cost drivers across our energy system. I am pleased to see some of its initial recommendations adopted under this budget.

First, the budget will see a long-term reduction in the VAT rate applicable to gas and electricity bill, reducing this from 13.5% down to 9%. This measure will remain in place until 31 December 2030, at an annual cost of €254 million. This has effectively created a tax reduction of more than €1.25 billion and is worth an average of €100 per year to a household using gas and electricity.

Second, retrofitting remains one of the most impactful measures a household can take to reduce energy bills. Budget 2026 provides the largest ever budget for retrofitting with an allocation of €558 million. This will support up to 65,000 home upgrades. This includes the Warmer Homes Scheme, which last year provided fully-funded deep retrofits to almost 8,000 homes.

With an €89 million increase on last year, this means that more funding than ever will be available to make people's homes warmer, healthier, more comfortable and less expensive to heat.

These retrofits will make a significant difference to households, and are supported by ringfenced funding from the carbon tax. Recent figures suggest that a household can save up to €1,100 in energy costs by undertaking deep retrofitting such as attic, floor and wall insulation and high efficiency glazing

Furthermore, under Budget 26 government has enhanced targeted energy affordability measures through our Social Protection System. This budget will see the weekly rate of Fuel Allowance increase by €5 to €38 per week. This payment currently supports 410,000 households and under Budget 2026 it will be expanded to all households in receipt of the Working Family Payment such that 460,000 families will benefit from this support.

Climate and Environment

The Infrastructure, Climate and Nature Fund (ICNF) was established as part of Budget 25 fund the climate transition. A €500m allocation for DCEE projects under the ICNF will focus on developing new markets to accelerate the decarbonisation of Ireland's energy system, in particular for biomethane and district heating. The ICNF will also provide funding to conduct offshore site surveys, de-risking the development of offshore renewable projects and supporting their delivery. I look forward to working with each of these sectors to deliver these important programmes.

At its core, Budget 2026 seeks to protect the jobs of today and create the jobs of another. The transport and energy sectors have a huge rule to play in this. Already, there are more than 26,000 people employed across the energy and retrofitting sectors in Ireland and we want to work with all industry partners to further increase this. Likewise, there are thousands of talented people working in Ireland's public transport, maritime and aviation industries, and this will see significant growth in coming years.