Friends of the Earth’s Five Things to Watch in Budget 2026

Friends of the Earth has spotlighted five things to watch in Budget 2026 next Tuesday to assess the Government’s commitment to tackling the interlinked climate and cost of living crises [1]. We’re urging the Government to use the Budget to tackle both of these crises collectively in a way that eases the burden on struggling communities and puts people, especially those most in need, before polluters. 

Here are Friends of the Earth’s five things to watch in Budget 2026:

One: Tackle Energy Poverty

Households across Ireland continue to face among the highest electricity prices in the EU. Crippling energy prices have forced almost 300,000 households into arrears on their electricity electricity bills and over 180,000 households into arrears on their gas bills [2]. Budget 2026 must provide immediate relief while also putting in place lasting protections, such as an Energy Guarantee Scheme, that guarantees access to affordable, clean energy [3]. 

• Will Budget 2026 fulfil the Programme for Government’s commitment to expand Fuel Allowance eligibility to include Working Family Payment recipients?
• Will Budget 2026 restore the purchasing power of the Fuel Allowance, increasing payments by €9.50 weekly to €40, to align with inflation?

Two: Prioritize retrofits for people most in need

Retrofitting homes, to make them warmer and more efficient, lowers bills, raises housing standards, cuts pollution and improves people’s health, all without driving up inflation. Yet despite Government commitments, retrofitting policy remains heavily skewed toward higher income homeowners, leaving renters and people on lower-incomes behind.  

• Will Budget 2026 prepare for mandatory Building Energy Ratings (BER) for rental properties with dedicated compliance funding?
• Will Budget 2026 prioritise people most at risk of energy poverty by increasing investment in retrofitting for the most vulnerable and people in social housing [4]?

Three: Say no fossil fuel infrastructure that would cause energy bills to skyrocket even further

The Government’s decision in favour of a temporary state-controlled Liquefied Natural Gas (LNG) terminal for emergency use is the wrong approach on both climate and energy security grounds. It also  ignores the massive costs that it would add to consumers' energy bills. The cost of a state-owned terminal has been noted as close to €900million over 10 years. 

• Before any further steps are taken for an LNG terminal, will Government clarify the adverse impacts on customers’ bills?

Four: Target transport funding where it's needed

We can’t lose sight of the need to combat transport emissions. Not only are Ireland’s transport emissions stubbornly high, many people are impacted by transport pollution in their areas, being forced to breathe polluted air that can damage their health. Beyond this, congestion imposes significant economic costs, highlighting the urgent need for sustainable transport solutions. In Budget 2026, will the Government:

• Target EV subsidies to rural drivers who have fewer options?
• Revise Vehicle Registration Tax to incentivise smaller, greener vehicles, applying higher taxes specifically targeting SUVs?
• Introduce congestion and parking charges starting in Dublin by 2027, accompanied by actions to increase road space for public transport?

Five: Fund a Just Transition by taxing the worst polluters 

There is a need to unlock new sources of funding to ensure that Ireland’s transition to a green economy is truly just and leaves no one behind. There are a range of options available to raise this public finance [5]. 

• Will Budget 2026 introduce a carbon levy on shipping and a new tax on private jet flights and also remove excise and VAT exemptions on aviation fuel?

Speaking ahead of the Budget, Deirdre Duffy, Chief Executive of Friends of the Earth said:

The Government must tackle the climate crisis in a way that makes life better for people, especially people most in need.  Every Budget decision should be tested through the lens of whether it prioritizes the wellbeing of both people and the planet that we all rely on. We need a whole of Government approach to climate action that moves beyond making this the responsibility of any one Government department and beyond a focus on mere emission reductions.

It’s essential that this Budget addresses the crippling energy price crisis that is forcing people to choose between heating and eating. It’s no longer acceptable that our energy system is still dominated by dirty, expensive fossil fuels, and our buildings are cold, leaky and unhealthy. 

The Government must increase funding for retrofitting the coldest, leakiest homes, putting renters and social housing tenants first. We need a huge national insulation effort - one that focuses on people most in need, provides decent green jobs, makes our homes and communities warmer and more affordable to heat, and that protects future generations from the worst effects of climate change. We did this before when we stopped at nothing to make sure every home in Ireland had electricity - why can’t we do it now to make sure every home is warm and affordable to heat?

Friends of the Earth full pre-budget submission is available here [1]. Along with the 32 organisations in the Environmental Pillar, Friends of the Earth is also calling on the Government to commit to the €463.5 million needed annually to support nature protection and restoration at the necessary scale and continue the necessary funding increases for the NPWS by 25% in Budget 2026 [6]. 

Notes:

1. Friends of the Earth’s pre-Budget submission can be read in full here: https://www.friendsoftheearth.ie/assets/files/pdf/foe_pre-budget_submission_2026-2_1.pdf.

2. According to the latest CRU statistics on arrears and disconnections, 13% of domestic electricity customers in Ireland, amounting to 298,336 customers, are in arrears. 183,520 gas customers are also in arrears. See the full statistics here: https://cruie-live-96ca64acab2247eca8a850a7e54b-5b34f62.divio-media.com/documents/Arrears_and-NPA-disconnection-update-June-2025.PDF.

3. Friends of the Earth is calling on the Government to develop and implement an Energy Guarantee Scheme, ensuring baseline energy needs are consistently met for all households. This should meet a proportion of minimum energy needs, primarily linked to dwelling energy efficiency and household income, and be adaptable to any price fluctuations in the market, acting as a safety net to low income households during times of energy price crises. Such an approach would become less costly as the energy efficiency of dwellings are improved in line with the national retrofit strategy. 

4. Budget 2026 must prioritise people most at risk of energy poverty by increasing investment in retrofitting for the most vulnerable and people in social housing. Friends of the Earth is calling on the Government to specifically: 

• Guarantee and ramp up long term funding for the local authority energy efficiency programme as recommended by the Climate Change Advisory Council.

• Pilot a 100% retrofit Warmer Homes scheme for low income tenants, including those on Housing Assistance Payment (HAP).

• Develop a targeted Rural Retrofit Programme.

• Develop an independent community-based energy advice services.

• Implement a targeted zero-interest loan scheme for low-income households.

5. Trócaire’s recent “Fuelling Injustice” report is worth referring to on this - see https://www.trocaire.org/documents/fuelling-injustice/. Some other ways, to unlock new sources of funding to ensure that Ireland’s transition to a green economy is truly just, include taking the following measures: 

• Impose a Climate Damages Tax on fossil fuel investments by Irish based investment companies. 

• Introduce a tax on the profits of companies involved in fossil-fuel production and refining.

6. The Environmental Pillar has highlighted that, in order to meet both our national and EU obligations, Ireland must dramatically increase funding for nature restoration. This is not just about spending more, but about spending wisely to ensure ecological resilience, create green jobs, and restore trust.