Minister O'Brien delivers over €1 billion investment in Budget 2026 – to accelerate Ireland's energy transition and underpin our journey to a net-zero future
- Foilsithe:
- An t-eolas is déanaí: 7 Deireadh Fómhair 2025
Budget allocation demonstrates commitment to accelerate climate action, prepare Ireland for the impacts of a changing climate, and enhance our environment
Core capital allocation has increased by €169 million
- Record funding of €558 million for home energy upgrades and solar PV
- VAT reduction on electricity and gas bills extended to 2030
- Increased funding for our Just Transition – to ensure support for communities in the greater Midlands region
- Investment in offshore renewable energy data surveying – to de-risk future projects and drive the energy transition
Minister for Climate, Energy and the Environment Darragh O'Brien has secured almost €1.1 billion in Budget 2026 to accelerate Ireland’s energy transition and underpin Ireland’s journey to a net-zero future.
Home energy upgrades — record funding for retrofitting and solar PV
Budget 2026 includes funding of €558 million for Sustainable Energy Authority of Ireland (SEAI) residential and community energy upgrades, including the Solar PV (photovoltaic) Scheme. This is an €89 million increase on last year’s corresponding Budget 2025 allocation. It means that more funding than ever will be available to make homes warmer, healthier, more comfortable and less expensive to heat. This funding is expected to be further supplemented with additional funding, such as an allocation from the European Regional Development Fund (ERDF), which will provide for an increase in the allocation for the Warmer Home Scheme in 2026 (and for the overall 2026 budget allocation). The implementation of the Home Energy Upgrade Loan Scheme, which provides low-cost retrofit loans with interest rates available from 3%, also continues to be supported.
Budget 2026 will see continued investment in public sector building retrofits – across a number of departments. As part of the first phase of ICNF (Infrastructure, Climate and Nature Fund) funding, €21 million has been allocated for public sector retrofitting for 2026.
Investing in offshore renewable energy data surveying – to secure our energy future
Budget 2026 includes significant investment in offshore renewable energy site data surveying to assist in the de-risking of future projects – resulting in the decarbonisation of Ireland’s electricity system, but also resulting in greater competition and downward pressure on electricity prices for households and businesses in the future. As part of the first phase of ICNF (Infrastructure, Climate and Nature Fund) funding, the Offshore Site Surveying Programme will support the development of the Offshore Renewable Energy (ORE) sector in Ireland’s waters, so that ORE projects including ORESS (Offshore Renewable Electricity Support Scheme) auctions, preceding certain developments, are substantially de-risked, supporting greater market participation and competitive bid prices. €8 million has been allocated to this programme for 2026.
Accelerating climate action and ensuring a Just Transition
Budget 2026 sees renewed funding for a broad suite of measures and actions on climate change, including specific funding for technical research and modelling – to inform climate mitigation and adaptation policy measures. This is part of a sustained investment in climate, environmental and renewable energy research.
In particular, almost €82 million is being provided for 2026 under the EU Just Transition Fund Programme – as part of an overall commitment of €169 million for the broader Programme. This will support those regions and communities (in the Midlands designated territory) that are most negatively affected by the transition to climate neutrality, as we ensure that no one is left behind.
Protecting our environment and moving to a Circular Economy
Budget 2026 will support Ireland in transitioning to a Circular Economy, whilst protecting our natural resources, environment and health on the national journey to net zero by 2050. In particular, €30 million has been allocated for the Landfill Remediation Programme.
A broader allocation of €157 million in this area will advance our Circular Economy ambition across the country, and protect the environment beyond our shores – by ensuring that MARA (Maritime Area Regulatory Authority) is resourced to deliver on its remit as a regulator for the maritime area.
Commenting on Budget 2025, the Minister for Climate, Energy and Environment Darragh O'Brien said:
"Budget 2026 underpins our ongoing work to protect the environment, to combat climate change, and to transform our energy system – ensuring that energy is secure, sustainable and affordable for all. The government has extended the VAT reduction [from 13.5% to 9%] on electricity and gas bills until 31 December 2030. The government has also broadened the scope of the Fuel Allowance to include those in receipt of the Working Family Payment, as well as increasing the weekly payment from €33 to €38. This will provide an additional €140 during the annual Fuel Allowance season. In my role as chair of the National Energy Affordability Taskforce, I recently met with the four biggest energy retailers; they have committed to establishing hardship funds and focused measures for any customers who may find themselves in difficulty this winter. This complements work by my Department and the CRU – to ensure that all households, most especially those who are vulnerable, are protected. Through the taskforce, we are tackling the root causes of energy poverty, and energy affordability challenges
"I also welcome a very substantial allocation for home energy upgrades, which includes the Warmer Homes Scheme providing fully-funded home energy upgrades for those at risk of energy poverty, and making homes warmer, healthier, more comfortable and less expensive to heat. The savings can be very significant. A household could save between €750 and €1,120 per year by installing a deep package of measures. The government has also extended to 2028 the €400 income tax exemption for profits from the microgeneration of electricity – again lowering energy bills for a significant cohort of households across the country. We now have over 150,000 households and businesses who have registered their microgeneration capacity with ESB Networks and this number is growing on a daily basis.
"We continue to work at pace, with EirGrid and ESB Networks, to further develop our electricity grid – future-proofing our energy system for the ongoing transition to indigenous renewables, and the impacts of a changing climate, as we have seen during recent storms. The landmark €3.5 billion investment in our national grid infrastructure (2026-2030), part of the recent National Development Plan review, represents the largest single investment in the country’s electricity network in its history."
Minister of State with responsibility for Circular Economy Alan Dillon said:
"This Budget lays the foundation for a more circular, sustainable economy – one where waste is designed out, and value is kept in. With increased investment in landfill remediation and strengthened waste enforcement, we are not only protecting our environment but also driving systemic change. The implementation of Ireland's second Whole-of-Government Circular Economy Strategy will accelerate our shift to a model where products are reused, repaired, and recycled, where circular business models thrive, and where materials are kept in use for as long as possible. This is how we build a resilient, climate-neutral and nature-positive economy for future generations."
Minister of State with responsibility for the Marine Timmy Dooley said:
"I am very pleased that key priorities in the marine and inland fishery areas, that will help us deliver on our climate, energy and environmental protection targets, have secured vital funding in Budget 2026. Our goal is to ensure that our rivers, seas and oceans are clean, healthy, productive and sustainably used; this Budget supports these objectives In particular, funding provided for the Maritime Area Regulatory Authority will enable it to continue to deliver on its core functions – increasing the volume of Maritime Area Consents and Maritime Usage Licences to be delivered during 2026, and supporting a more streamlined regulatory process."
ENDS
Notes to the Editor
The Department of Climate, Energy and Environment has been allocated almost €1.1 billion in Budget 2026.
Key Budget 2026 allocations include:
Transform Ireland's energy systems to be sustainable, affordable and secure: €724 million
Budget 2026 will continue to accelerate the development and deployment of renewable energy, and improve the delivery of energy efficiency in the built environment – as part of building a sustainable, secure and affordable energy sector.
The allocation includes:
- A record capital allocation of €558 million for SEAI residential and community energy upgrade schemes (including the Solar PV scheme) – to support the delivery of our National Retrofit Plan. This is an €89 million increase on the corresponding Budget 2025 allocation (€469 million). This funding is expected to be further supplemented with additional funding – such as an allocation from the European Regional Development Fund (ERDF) – which will provide for an increase in the allocation for the Warmer Home Scheme in 2026 (and the overall 2026 Budget allocation). More funding than ever will be available to make homes warmer, healthier, more comfortable and less expensive to heat. This means that households will be less vulnerable to changes in energy costs. The implementation of the Home Energy Upgrade Loan Scheme, which provides low-cost retrofit loans with interest rates available from 3%, also continues to be supported.
- Funding for continued supports and advisory services – to enable the public sector to contribute to Ireland's greenhouse gas emission reduction targets and manage their energy costs (through improved energy efficiency and increased use of renewable energy)
- Continued support for energy research, including investment in the SEAI's Research Development and Demonstration Programme, which invests in innovative energy projects and provides supports to industry and academia to accelerate solutions for Ireland's transition to a clean and secure energy future
Accelerate climate action and prepare Ireland for the impacts of a changing climate: €209 million
Budget 2026 will support the achievement of Ireland's national climate objective of transitioning to a climate-resilient, biodiversity-rich, environmentally sustainable climate neutral economy by 2050. This objective aligns with the legally-binding, economy-wide Carbon Budgets and Sectoral Emissions Ceilings that were agreed by government in 2022 (and which will be updated in 2026).
The allocation includes:
- Almost €82 million in funding – under Ireland's EU Just Transition Fund Programme for approved projects – for the wider Midlands region
- €28 million for international climate commitments, an integral aspect of Ireland’s climate foreign policy.
- €64 million for the Environmental Protection Agency (EPA) – to underpin its monitoring, research and enforcement programmes
Protect and enhance our environment and improve the circular and resource-efficient economy: €157 million
Budget 2026 will support Ireland in becoming an EU and global leader in the Circular Economy transition – protecting our natural resources, environment and health on the national journey to net zero by 2050.
The allocation includes:
- Funding to advance the Circular Economy ambition, and tackle waste contamination sites
- Resources for the Maritime Area Regulatory Authority (MARA) – to enable it to deliver on its remit as a regulator for the maritime area
- Funding for Geological Survey Ireland’s geo-environmental mapping project (Tellus) and Ireland's marine mapping programme (INFOMAR)
- Resources for Inland Fisheries Ireland (IFI) – to protect, manage and conserve Ireland's inland fisheries and sea angling resources
Infrastructure, Climate and Nature Fund
The Infrastructure, Climate and Nature Fund (ICNF) was established as part of Budget 2025 to manage windfall tax receipts and fund the climate transition by supporting designated projects over the period 2026 to 2030. A €500 million allocation for the Department of Climate, Energy and the Environment projects under the ICNF in the revised National Development Plan for 2026-2030 is focused on developing new markets to accelerate the diversification and decarbonisation of Ireland’s energy system.
In addition to offshore data surveying and public sector retrofitting, over the 5-year funding period, investments in early phase infrastructure for a National District Heating Market will deliver key backbone elements. It will decarbonise heat for larger anchor customers in the short term, and can be leveraged through follow-on investments to target smaller heat loads in the medium-to-longer terms. Developing this initial core infrastructure by 2030 will reduce heat emissions from connected buildings this decade. It will enable many more citizens, businesses and public bodies to decarbonise their homes and buildings throughout the 2030s and beyond. The development of a National Biomethane Market (under the National Biomethane Strategy) will develop and operationalise a biomethane industry by producing zero-carbon gas from grass and organic waste. Government investment in the development of market infrastructure is a key element to establish this market.