The Irish public is aware that Ireland is unlikely to meet its target of halving our carbon emissions by 2030. KPMG’s Powering Tomorrow survey, released in February 2026, found that just six percent of people in Ireland believe we are on track to meet this goal.

Their concerns appear justified, as the latest Environmental Protection Agency projections show.

Ireland does still have an opportunity to turn things around, however, ensuring we do meet our Climate Act target to bring our carbon emissions to 51 percent below 2018 levels by 2030.

Cohesive tax policies backed by attractive tax incentives could drive the right kind of behaviour and play a part in improving Ireland’s emissions performance.

Targeted tax exemptions, tax deductions and tax credits, along with changes to the rules on benefits in kind (BIK) and value-added tax (VAT), could help to accelerate our green transition.

Mobilising private finance for green investment

We can encourage investment in green funds and green financial products by increasing tax-free pension lump sums if they come, at least in part, from investments in approved green funds (such as renewable energy, energy efficiency and forestry funds, etc).

We can also broaden the pool of private capital available for green projects and initiatives by providing a tax exemption on the interest income earned on green bonds by individual investors.

By encouraging private investor demand for green funds and green financial products, the Government can mobilise capital without relying solely on public budgets.

At a personal level, most people are keen to make greener choices. Our Powering Tomorrow 2026 survey found that four-in-five are willing to adopt energy-efficiency measures but three-in-five have not acted on this in the past year.

Our findings suggest people are motivated in principle but barriers like upfront cost are stopping many from following through.

Incentivising investment in green technology

There’s even more to gain from incentivising businesses to change.

Tax relief for companies investing in renewable energy and industrial decarbonisation projects should be introduced in Ireland (we had a similar scheme on the books, but it was discontinued in 2014).

The European Commission recently approved the introduction of a tax credit scheme for businesses in Finland aimed at fostering investment in green and decarbonisation projects, so a clear state aid precedent exists.

The greenest building is the one that already exists. Cement alone is responsible for close to eight percent of annual emissions, according to Ecocem. Any tax credit regime introduced should also include projects such as retrofitting and conversion of commercial buildings to help minimise emissions.

Alongside a new tax credit regime, we should also be thinking about introducing a super-deduction for businesses that invest in energy-efficient equipment, electric vehicle charging stations and on-site renewable energy installations.

There is a clear precedent for this within the European Union as the Netherlands provides a tax deduction of up to 145 percent for similar categories of expenditure by businesses.

At the same time, upping the research and development (R&D) tax credit rate for green spending would drive innovation, helping to create jobs while fuelling broader change.

Our research found that three-in-four people would back disruptive infrastructure projects if they created local jobs.

Catalysing rapid green investment

Tax policy measures are proven to be an extraordinarily powerful lever. We’ve seen before how they can drive rapid investment and change social behaviours.

You only have to look at the plastic bag tax or the successful incentives introduced to drive urban and rural regeneration, hotels and student housing construction and the creation of hubs for financial services and manufacturing, to find examples of tax policy driving investment into the right areas.

It’s also clear that countries and regions with strong access to financing, streamlined regulatory frameworks and appealing investment incentives, are leading the green transition.

While it is unfortunate to see the current US administration dismantling the 2022 Inflation Reduction Act (IRA), this legislation had instigated real change before its repeal, with many large manufacturing groups announcing plans to invest in clean energy equipment manufacturing in the US. Unfortunately, those plans have been shelved since the act was repealed.

US policy shifts have slowed its green transition, whereas Europe and Asia are powering forward. In 2024, global renewable power capacity rose 15 percent to almost 4,500 gigawatts, with Asia driving this growth and Europe close behind.

The renewable energy sector accounted for more than 90 percent of China’s investment growth in 2025.

Investment in renewable energy and green projects also reduces our dependency on imported oil and gas and, in this current geopolitical landscape, this can only be a positive.

On top of that, Brussels is backing the use of tax measures to drive the green transition.

In July 2025, the European Commission recommended the use of accelerated depreciation and targeted tax credits to promote investment in clean technologies, renewable energy and energy-efficient machinery.

Moving now to avoid costly climate penalties

Introducing new tax reliefs will cost the State in terms of current budget measures, but it will be cheaper in the long run if it prevents or mitigates the penalties Ireland would face for not meeting EU-mandated targets in the future.

That bill? Between €8 billion and €26 billion, according to a report issued by the Fiscal Advisory Council and Climate Change Advisory Council in March 2025.

Ireland can’t afford to pay those penalties, never mind the broader costs of climate change. Half of the people we surveyed say it is the Government’s responsibility to accelerate Ireland’s energy transition.

By acting now with effective green tax policy interventions, the future benefits will be exponential.

Paul O’Brien, Tax Lead, Energy, Utilities and Telecoms, KPMG in Ireland