Budget 2026 must tackle cost of climate inaction or households will keep paying the price

At today's National Economic Dialogue, Friends of the Earth calls for Budget 2026 to end the era of short-term sticking plasters for energy prices and make lasting investments in warmer homes, lower bills, and a fossil-free economy.

As Government leaders, economists and civil society gather for today’s National Economic Dialogue in Dublin Castle on Monday 16 June , Friends of the Earth has warned that short-term thinking on climate and energy is driving both soaring energy bills and a looming €26 billion EU non-compliance bill [1] - and that Budget 2026 must mark a decisive break from this unsustainable trajectory.

In its Pre-Budget Submission [2], the climate campaigning organisation highlights that climate inaction is already costing Irish households financially - through some of the highest energy  prices in Europe, inefficient homes, and billions in public money still subsidising fossil fuel use.

View Friends of the Earth's pre-Budget submission here

Jerry MacEvilly, Campaigns Director at Friends of the Earth, said:
“Today’s National Economic Dialogue is the moment for Government to be clear that climate inaction comes with huge, unacceptable costs. Government is not delivering on its own climate commitments - in fact the latest evidence shows we are going backwards [3]. This Government is not only locking in climate breakdown, it is currently choosing to burden households with higher bills, colder homes, and missed opportunities in the green transition. Budget 2026 must mark a turning point: Friends of the Earth has outlined a range of measures on how Government must prioritise investments in warm homes, clean accessible transport and also lower energy bills by making the polluters pay - especially data centres and fossil fuel companies.”

Meanwhile, over 260,000 electricity customers and 170,000 gas customers were in arrears at the end of 2024, and many households fear another winter of sky high energy bills with energy poverty continuing to be prevalent amongst renters, single-parent families, and groups like the Traveller and Roma communities.

Clare O’Connor, Programme Coordinator at Friends of the Earth, said:

“Households are paying through the nose for a broken energy system, while Ireland faces billions in future penalties for missed EU  targets. Budget 2026 must be a pivot point  away from short-term crisis patching and toward long-term investment in clean, affordable energy for all. Tackling household energy bills required much more targeted investment in retrofitting, particularly for renters and social housing tenants. ”

Key Recommendations in the Friends of the Earth Submission include:

• Double funding for the Local Authority Retrofit Programme (€180m) 
• Pilot a new 100% funded retrofit scheme for low-income renters, including HAP tenants.
• Establishing community-based energy advice services in every local authority to support households to engage with the energy transition
• Pilot a Rural Retrofit Programme allowing households using oil and solid fuels to transition to electric heat pumps, as committed to in the Programme for Government.
• Ensure that energy infrastructure costs associated with data centres are not passed on to all consumers. Data centres must pay the full costs of their energy hungry business decisions.
• Clarify the full costs of a polluting LNG terminal and the impact on customers’ bills and ensure a full up-to-date analysis of sustainable and lower-cost alternative options for energy security, together with a public consultation, led by advisory bodies at his disposal.
• Redirect fossil fuel subsidies - worth €4.9 billion in 2023 - into clean energy and energy poverty alleviation, as recommended repeatedly by the government’s Climate Change Advisory Council.
• Ring-fence €400 million of the multi-billion Infrastructure, Climate and Nature Fund to develop Ireland’s district heating networks.

Notes to the Editor:

[1] https://www.fiscalcouncil.ie/a-colossal-missed-opportunity/ 

[2] The full Pre-Budget Submission is available at: https://www.friendsoftheearth.ie/assets/files/pdf/foe_pre-budget_submission_2026.pdf

[3] Recent analysis by the Environmental Protection Agency shows that Ireland’s current climate plans, even if fully implemented, would fall well short of legally binding targets - achieving a maximum 23% emissions reduction by 2030, far below the 51% target.