Taoiseach’s Advisory Council Highlights Risks in Government’s LNG Plans

NESC analysis identifies range of LNG-related risks - strengthening case for rejection of Shannon LNG says Friends of the Earth

The National Economic and Social Council, an advisory body to the Taoiseach, has published a new report which highlights major risks associated with LNG development in Ireland [1]. It notes that LNG from the US in particular exposes Ireland and the EU to vulnerabilities linked to US domestic policy shifts and the political landscape. Friends of the Earth has responded that this strengthens the case for the Government to reject Shannon LNG, a US company’s plan for a commercial terminal in Kerry to increase the supply and use of gas in Ireland.

The Council report also refers to the extreme cost of the Government’s planned, state-owned, temporary LNG facility – a minimum of €900 million over 10 years –  and to the need for Government to respect commitments to radically reduce fossil-fuel reliance and meet climate obligations as part of this proposal. It also highlights a risk that Ireland may become locked-into LNG usage as result of regressive investor protections under the Energy Charter Treaty which Ireland remains a party to.

The Council report, which addresses a range of energy trade issues, emphasizes the need for a long-term strategy to reform Ireland’s strategic energy reserves by developing renewable fuels combined with long-duration energy storage technologies and interim backup measures at power plants.

Jerry Mac Evilly Campaigns Director in Friends of the Earth stated:

 “The new Government rushed to give a greenlight to a polluting and expensive state-owned LNG terminal and also left the door open to a dangerous US-owned commercial terminal in Kerry. NESC’s analysis shows that creating a dependency on US LNG pushed by the Trump administration is a strategic liability, not a solution, for Ireland’s energy future.
It is essential that the Government responds to NESC’s analysis and is clear to An Coimisiún Pleanala regarding its consideration of the Shannon LNG project that a US-owned commercial LNG terminal would be a major geopolitical risk, would run counter to climate obligations, and should be rejected. [2]”

Jerry Mac Evilly continued:

“We also have major concerns that the minimum €900million cost for a state-owned terminal noted by NESC would mean new significant charges on customers’ bills - and come at the very time Government is removing energy credits and being lambasted for having the highest electricity prices in Europe.
“The Minister has stated that a state-owned terminal would be a temporary measure and must be consistent with climate law. Yet the Government has not come forward with legally binding obligations to ensure these conditions are respected and to ensure Ireland is not locked-into polluting and costly gas use.”

The NESC analysis details how Ireland must significantly reduce its reliance on gas to meet climate obligations. It addresses potential challenges regarding increasing use of gas interconnectors from Scotland. It notes the Government plan to develop a state-owned LNG terminal as a temporary emergency reserve. The report also raises significant risks regarding LNG development more generally, including geopolitical exposure, fossil fuel lock-in and conflict with climate commitments, and puts forward the need for zero-carbon strategic reserves. The report notes:

• …The EU’s increased dependence on the US as a supplier of energy commodities exposes the EU to the risk of supply disruptions in US exports. In the event of a major international energy supply shortage affecting the US, exports could be restricted in order to prioritise domestic needs….
  
  

• …In terms of the EU’s reliance on the US as a supplier of LNG, analysts have highlighted that ‘this growing dependency is exposing the EU to vulnerabilities linked to US domestic policy shifts and the political landscape. The Trump Administration is likely to use it as a pressure tool on Europe ... LNG imports then turn into a bargaining tool to pressure the EU to make trade concessions’ (Kouam, 2024). In April 2025, US President Donald Trump suggested that the EU should commit to buying more oil and LNG from the US as a means of balancing the US trade deficit in goods with the EU (Sheftalovich, 2025)....
  
  

• …As the EU increases its reliance on US oil and LNG supplies, this exposes the EU to the risk that such dependence can be used to force concessions on other issues such as agriculture trade, digital services taxes, defence spending, or environmental regulations such as the EU’s Carbon Border Adjustment Mechanism (CBAM)....
  
  

• …An analysis commissioned by DECC to examine the cost of the proposed FRSU facility has estimated that it will cost €900m over a ten-year period, inclusive of capex, annual lease and operating costs. (CEPA, 2025: 22). A review is ongoing to assess the implications of the proposed facility in terms of its potential impact on household energy bills.
  
  

• …While the development of a state-led floating LNG facility will diversify Ireland’s strategic energy reserves, concerns have been raised about the risk of fossil-fuel lock-in and the environmental impact of LNG (CCAC, 2025: 17). Experts have also called for safeguards to prevent commercial LNG operations in Ireland and to ensure the facility does not conflict with the Government’s commitment to radically reduce fossil-fuel reliance and meet legally binding carbon budgets (Daly et al., 2025)...
  
  

• …The facility represents a new investment in fossil-fuel infrastructure that could potentially be covered by investor protections under the Energy Charter Treaty (ECT), which includes a 20year sunset clause. Ireland is one of several EU member states that has indicated the intention to withdraw from the ECT, aiming to do so in coordination with other EU countries. However, not all EU member states have committed to withdrawing from the ECT, making the timeline for Ireland’s eventual withdrawal uncertain (Houses of the Oireachtas, 2024b). As a result, investor protections under the ECT could apply to the proposed LNG facility for 20 years after withdrawal from the ECT (EPRS, 2023). 
  
  

• The Council believes it is essential to formulate a long-term plan for strategic clean energy reserves in Ireland. Ireland’s system of strategic energy reserves should be reformed to deliver on national commitments to decarbonise the energy system and eventually phase out fossil fuels. Ireland’s system of strategic energy reserves must be enhanced in the coming years in the context of a rapidly evolving energy landscape by integrating renewable fuels such as green hydrogen, ammonia and biomethane.
  
  

•  …The development of strategic energy reserves based on low carbon fuels should be pursued in tandem with the development of a portfolio of long-duration energy storage solutions to build system resilience, including pumped-storage hydroelectric, compressed air storage, liquid air energy storage, and emerging long-duration battery storage technologies based on iron and sodium. Other measures include the retention as an available backup of Moneypoint in oil-fired mode for longer than previously anticipated, and the potential to increase the feasibility of distillate operation of gas plants, including by increasing storage and by connecting power plants to existing storage at suitable locations…

 

ENDS

 

Notes:

1. The report ‘International Trade Dependencies and the Energy Transition’ published by the National Economic and Social Council (NESC) is available here - https://s3.eu-west-1.amazonaws.com/files.nesc.ie/nesc_reports/en/169_energy_trade.pdf 
   The associated NESC press release including quotes is available here - https://www.nesc.ie/news-events/press-releases/council-report-169-trade-energy-transition/
   NESC is the national advisory body to the Taoiseach and Government, providing research and advice “that helps achieve Ireland’s sustainable economic, social and environmental development.” Members of the Council are appointed by the Taoiseach for a three to five year term. These members are representatives of business and employers’ organisations, trade unions, agricultural and farming organisations, community and voluntary organisations, and environmental organisations. Jerry Mac Evilly of Friends of the Earth is one of the environmental representatives on the Council. Heads of Government departments and independent experts are also represented. 
2. The Government approved a state-owned strategic and temporary terminal in 2025, while letting a standard US commercial terminal (Shannon LNG) proceed by removing the 2021 Government policy statement that had previously introduced a prohibition on the development of all LNG import terminals. The Shannon LNG development is now before An Coimisiún Pleanala again. The Irish Independent reported in July that An Coimisiún Pleanála wrote to Minister O’Brien, requesting clarity on the Government’s LNG policy before it makes a decision on the Shannon LNG proposal. https://www.independent.ie/irish-news/planners-seek-clarity-on-coalitions-gas-reserve-policy-before-deciding-fate-of-shannon-lng-plan/a1701387552.html
   The Government has underlined that it supports a state-owned temporary terminal to operate in accordance with climate law and not increase gas demand. https://www.oireachtas.ie/en/debates/question/2025-04-29/280/ . However, it has not stated that it has written to ACP to clarify that a standard long-term commercial terminal would go against such commitments.