COMMISSION STAFF WORKING DOCUMENT 2023 Country Report - Ireland Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the 2023 National Reform Programme of Ireland and delivering a Council opinion on the 2023 Stability Programme of Ireland
Date: 2023-05-24
Institutions: European Commission, Secretariat-General
Subjects: Ireland, circular economy, economic recovery, economic reform, energy policy, fiscal policy, investment, stability pact, stability programme, waste management

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 24.5.2023  SWD(2023) 607 final  COMMISSION STAFF WORKING DOCUMENT 2023 Country Report - Ireland Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the 2023 National Reform Programme of Ireland and delivering a Council opinion on the 2023 Stability Programme of Ireland {COM(2023) 607 final}  
 
 
 
 
 
 
 
 
 
 
 
ECONOMIC AND EMPLOYMENT SNAPSHOT 

The Irish economy continues its 
strong performance 

to 

Ireland 

Ireland’s  economy  continued  its  robust 
growth,  with  a  substantial  contribution 
from multinationals.  The  country  avoided  a 
recession  during  the  COVID-19  pandemic  and 
recorded double-digit GDP growth of 13.6% in 
2021  and  12.0%  in  2022.  Multinationals 
in 
headquartered 
contributed 
this  exceptionally  strong 
substantially 
growth,  as  exports  of 
information  and 
telecommunication  services  and  of  medical 
and  pharmaceutical  products  were  the  driving 
force behind the rapid real GDP expansion. The 
growth  performance  of  domestic  companies 
does  not  match  that  of  multinationals;  gross 
in  sectors  dominated  by 
value  added 
multinationals  grew  by  19.4% 
in  2022, 
compared  with  7.2%  in  other  sectors.  This  is 
also  reflected  in  marked  disparities  between 
regions  hosting  multinationals  (the  areas  in 
and  around  Dublin  and  Cork)  and  regions 
dominated by Irish-owned small and medium-
sized  companies  (see  Annex  17).  The  Irish 
financial  sector  is  among the  largest  globally, 
with  large  international  entities  using  Ireland 
as a gateway to the EU. Interlinkages with the 
Irish  domestic  economy  remain  limited.  Irish 
SMEs  and  households  mainly  access  finance 
through  the  local  retail  banking  sector.  The 
macroeconomic outlook remains positive, with 
real  GDP  growth  projected  at  5.5%  in  2023 
and 5.0% in 2024. 

foreign  companies  jumped  fourfold,  whereas 
domestic  labour  productivity  grew  by  30%. 
More  recently,  in  2021,  while  SMEs  in  Ireland 
grew  by  5%  in  value  added  and  1.2%  in 
employment, large enterprises grew by 20.2% 
and  3.3%  respectively.  Irish  SMEs  also  export 
less  than  their  European  counterparts.  Survey 
data  shows  the  percentage  of  SMEs  that  do 
not  export  fluctuated  between  58%  and  65% 
over  the  past  5 years  –  well  above  the  euro-
area average   (1). A significant share of public 
support  for  R&D  in  firms  is  through  a  tax 
credit – which reaches only a small proportion 
of  all  SMEs  –  rather  than  direct  support  to 
SMEs.  This  divergent  economic  performance 
has an impact on regional development; those 
regions  less  able  to  attract  foreign  firms  fall 
behind in terms of productivity, innovation and 
growth. 

in 

highlights 

The continued strong performance of the 
labour  market 
labour 
shortages.  The  unemployment  rate  fell  to 
near  historic  lows  of  4.3%  in  March  2023. 
the  multinational  sector 
Employment 
increased  by  9%  in  2022,  with  no  significant 
negative  impact  from  the  worldwide  staff 
reductions by big tech companies. While wage 
pressures  are  strong  given  the  tight  labour 
market,  nominal  compensation  per  employee 
grew  by  4.2%  in  2022,  which  is  well  below 
inflation.  As  a  result,  real  wages  declined  by 
3.6%  in  2022.  Many  sectors  (particularly 
construction,  ICT  and  hospitality)  experience 
labour  shortages  in  both  high  and  low-skilled 
employees. 

Disparities are evident for firms 
and social groups 

Ireland’s  dual  economy  is  marked  by 
divergent economic performance. Over the 
past  20  years,  labour  productivity  among 

Disadvantaged  groups  continue  to  face 
significant  labour  market  challenges  and 
disproportionately high poverty risks.  The 
social  scoreboard,  supporting  the  European 
Pillar of Social Rights (see Annex 14), indicates 
that  the  disability  employment  gap  stood  at 
41.3  percentage  points  in  2021,  among  the 

(1)  2022 Survey on the Access to Finance of Enterprises. 

2 

 
 
                                                 
requires  additional  social  spending  and  the 
provision  of  accommodation,  which  has  been 
challenging,  as  the 
long-standing  housing 
shortages  have  required  the  government  to 
rely  on  serviced  accommodation.  A  sizeable 
number  of  Ukrainians  –  around  15 000  by 
March  2023  –  have  found  jobs,  with  many 
hospitality,  manufacturing, 
working 
in 
This 
construction 
contributed  to  alleviating  some  pressures  on 
the tight Irish labour market. 

services. 

other 

and 

Graph 1.1: Inflation components 

highest in the EU. While  the employment rate 
of single parents has grown significantly in the 
last  decade,  it  was  still  the  second  lowest  in 
the EU in 2021. Similarly, a 2019 study on the 
Traveller  community  indicated  that  only  17% 
of women and 13% of men had paid jobs. At 
13%,  Ireland  has  the  highest  share  of  low 
work  intensity  households  in  the  EU  (often 
above-mentioned 
the 
overlapping  with 
groups).  These  disadvantaged  groups  also 
have  high  poverty  rates.  In  2021,  the  at-risk-
of-poverty  or  social  exclusion  rate  for  people 
with disabilities and single parents was nearly 
double  and 
the  general 
population,  respectively.  The  latest  data  on 
Travellers  indicated  that  40%  struggle  to 
make ends meet. The national minimum wage 
in  2023 
the  estimated 
minimum  living  wage;  however,  Ireland  is 
phasing  in  a  national  living  wage  that  will 
become  mandatory  in  2026   (2).  Poverty  risks 
are  exacerbated  by  high 
inflation  and 
increasing living costs. 

remains  below 

that  of 

triple 

The impact of Russia’s invasion of 
Ukraine endures 

Source: Eurostat 

While the Irish economy has limited direct 
trade or financial links with Russia, it has 
suffered indirectly from Russia’s invasion 
of  Ukraine.  The  increase  in  global  energy 
prices  and  supply  side  shortages  have  had  a 
negative  impact  on  Ireland.  Despite  Ireland’s 
limited  exposure  to  Russian  gas 
imports, 
energy  inflation  reached  41.3%  in  2022  – 
amid  a  policy  response  that  cushioned  the 
impact  of  high  prices  on  households  and 
businesses  while  mostly  preserving  the  price 
signal  (see  Box  1).  Food  prices  also  rose 
markedly  after  the  Russian  invasion  and  food 
inflation  exceeded  10%  (year-on-year)  in  the 
final  quarter  of  2022.  Furthermore,  around 
Ireland.  This 
80 000  Ukrainians  fled 

to 

(2)  The national minimum wage was increased to EUR 

11.30 per hour in 2023. The Low Pay Commission has 
set an indicative national living wage for 2023 of EUR 
13.10 per hour. The civil society organisation ‘Living 
Wage Technical Group,’ using the 'minimum essential 
standard of living’ approach, has estimated the 2023 
living wage at EUR 13.85 per hour.  

Challenges persist for pensions, 
healthcare and housing 

Ireland’s  public  finances  are  sustainable 
in  the  short  term,  but  reliance  on 
multinationals  presents  risks 
in  the 
longer  term.  Ireland’s  government  balance 
in  2022.  Thanks  to 
returned  to  surplus 
unexpectedly  strong  government 
revenue 
flows  and  EUR 6  billion  total  transfers  to  the 
risks  are 
National  Reserve  Fund, 
negligible  in  the  short  term.  However,  when 
tax 
stripping  out 
revenues 
the 
government  balance  moves  from  surplus  to 
deficit. Government debt, at 44.7% of GDP and 
83.3%  of  GNI* 
is  below  pre-pandemic 
levels   (3).  While  Ireland’s  tax  base  is  narrow, 

corporation 
to  multinationals, 

‘windfall’ 

linked 

fiscal 

(3)  Modified GNI (GNI*) excludes globalisation effects and 
more accurately reflects the income standards of Irish 

3 

-20246810Services excl. rentsRentsFood, alchohol and tobaccoEnergyNon-energy industrial goodsTotal HICP (y-o-y%)% 
                                                 
   
                                                 
Box 1: 

Energy policy response in Ireland 

Ireland adopted various support measures to cushion the  impact of energy price inflation on 
households  and  businesses.  The  Commission  2023  spring  forecast  projects  their  costs  to 
amount to 0.3% of GDP in 2023   (4). Most measures preserve the price signal, although they 
are  only  partly  targeted  at  the  most  vulnerable.  The  bulk  of  these  measures  was  originally 
introduced only for 2022 and then extended to 2023 (by the end of which they are expected to 
be tapered). 

The key measures include two payments of EUR 400 to all household electricity consumers in 
2022 and a further two in 2023; grant schemes to support businesses facing increases in their 
energy  costs;  and  the  extension  of  both  temporary  reductions  in  excise  duty  on  fuels  and 
temporary VAT cuts on gas and electricity. While the excise duty and VAT reduction do have the 
potential to distort the price signal, overall the price signal is preserved because the impact of 
the  other  measures  is  greater.  The  impact  of  the  policy  response  is  more  untargeted  than 
targeted.  This  is  due  to  the  large  cost  of  the  energy  credits  and  the  extension  of  the  VAT 
reduction for the hospitality sector, notwithstanding a significant share of targeted measures 
(such as payments to long-term social welfare recipients). 

Ireland  applies  the  EU  solidarity  contribution  in  application  of  Council  Regulation  (EU) 
2022/1854   (5). In November 2022, the government announced a cap on market revenues of 
non-gas  electricity  generators,  in  order  to  collect  excess  revenues  and  support  electricity 
consumers. In addition, a temporary solidarity contribution will be levied on companies active 
in fossil fuel production and refining for 2022 and 2023. The temporary solidarity contribution 
will be calculated based on the portion of a company’s taxable profits that are more than 20% 
above that company’s average taxable profits in the period 2018 to 2021. 

In  April  2022,  Ireland  launched  its  national  energy  security  framework  to  provide  a 
comprehensive response to Ireland’s energy security needs in the context of the war in Ukraine. 
This  framework  includes  the  establishment  of  an  Energy  Security  Emergency  Group.  It  also 
sets  out  areas  in  which  Ireland  aims  to  reduce  dependence  on  energy  imports.  In  addition, 
given that risks of an electricity generation shortfall are forecast for the coming years, Ireland 
launched  a  security  of  supply  review  in  September  2022.  At  the  same  time,  the  energy 
regulator set out a programme of measures related to energy demand so as to: (i) reduce peak 
usage; (ii) increase the use of batteries; and (iii) procure permanent capacity through capacity 
market  auctions.  A  new  electricity  interconnector  to  France  is  also  under  construction. 
Notwithstanding these actions, more immediate measures are required to address challenges 
to  short-term  energy  supply  security  and  to  secure  procurement  of  additional  temporary 
electricity generation for winter 2023. 

reforms on recurrent property taxes have been 
initiated (see Annex 19). At the same time, as 
part of its recovery and resilience plan, Ireland 
has  committed 
legal 
framework  on  withholding  taxes  imposed  on 
royalty 
outbound 
payments.  Finally,  the  pronounced  ageing  of 
the population will put pressure on the pension 

interest,  dividends  and 

tightening 

its 

to 

residents than GDP. See Central Statistics Office, 
‘modified GNI’ for more detail. 

4 

system’s  sustainability  in  the  absence  of 
targeted and effective reforms. 

(4)  For 2022, gross budgetary costs of measures amounted 
to 0.5% of GDP. Some of the measures outlined in this 
box were already in place in 2022. 

(5)  That is the application of a mandatory temporary 

solidarity contribution at a rate of at least 33% to the 
extraordinary and unexpected profits of businesses 
active in the extraction of crude petroleum, natural gas, 

 
                                                                        
 
                                                 
 
Graph 1.2: Housing developments 

Annualised data 
Source: Central Statistics Office, Department of Housing, 
Local Government and Heritage 

Climate and energy-related 
weaknesses remain 

to 

inequality 

Ireland  has  made  progress  on  the  UN’s 
Sustainable  Development  Goals  (SDGs), 
energy-related 
and 
climate 
but 
challenges  are  acute. 
Ireland  performs 
above  the  EU  average  on  many  SDGs  (see 
Annex 1) and is making progress on indicators 
(SDG  10),  poverty 
related 
(SDG 1),  inclusive  growth  (SDG  8),  health  and 
well-being  (SDG  3),  education  (SDG  4)  and 
gender  equality 
(SDG  5).  Nevertheless, 
Ireland’s  performance  is  worsening  for  a 
limited  number  of  SDGs, albeit  still  remaining 
above the EU average, such as on sustainable 
cities  and  communities  (SDG  11),  clean  water 
and  sanitation  (SDG  6),  and  life  on land  (SDG 
15).  In  spite  of  the  recent  adoption  of  a 
strengthened legislative framework for climate 
action  linked  to  ambitious  mitigation  targets 
and  the  climate  action  plan  2023,  Ireland  is 
yet  to  achieve  genuine  progress  in  curbing 
greenhouse gas emissions (SDG 13). Achieving 
national  and  EU  targets  will  be  a  major 
challenge that would require a transformation 
of many facets of the Irish economy. 

insurance  to  bypass 

The  health-  and  long-term  care  systems 
continue  to  face  long-standing  issues, 
despite  gradual  improvements.  The  public 
healthcare  system  faces  significant  capacity 
constraints. Almost half of the population uses 
private  health 
long 
waiting lists in the public system. Ireland also 
remains the only EU country without universal 
primary  care  coverage.  With  respect  to  long-
term  care,  the  public  system  focusses  on 
institutional care over home care; the former is 
relatively  costly  and  limits  accessibility.  The 
ageing  of  the  population  is  expected  to  put 
considerable  pressure  on  the  sustainability  of 
the health and long-term care systems. 

House  and  rental  price  growth  remained 
high  due  to  persistent  shortfalls 
in 
housing  supply. 
In  2022,  new  housing 
completions  increased  by  around  40%  on  the 
year  to  almost  30 000.  However,  this  was  in 
part  driven  by  pent-up  deliveries  due  to 
pandemic  delays.  Looking  ahead,  the  fall  in 
housing commencements (-12% year-on-year) 
and  planning  permissions  (-20.5%  year-on-
year)  in  the  second  half  of  2022  suggests 
completions might fall in 2023   (6). In addition, 
higher-than-expected demographic growth and 
the need to house people fleeing from Ukraine 
heightened  housing  demand,  leading  to  an 
extremely  tight  rental  market  and  soaring 
house  prices.  This  suggests  that  the  initial 
housing targets set in the ‘housing for all’ plan 
of 33 000 new homes per year might need to 
be revised upward substantially. In the short to 
medium term, the gap between housing supply 
and demand is thus expected  to remain wide. 
Shortages of social housing have created long 
waiting lists, have resulted in an over-reliance 
on  short-term  rent  supplement  solutions  for 
75 000  families,  and  have  contributed  to  a 
steep increase in homeless people (22% year-
on-year in March 2023).  Affordability remains 
low, especially for poorer cohorts, and is a key 
challenge  for  competitiveness,  as  it  hinders 
the recruitment of skilled foreign labour. 

coal, and refinery sectors. It is calculated on taxable 
profits, as determined under national tax rules in the 
fiscal year starting in 2022 and/or in 2023, which are 
above a 20% increase of the average yearly taxable 
profits in 2018-2021. 

(6)  Central Bank of Ireland (2023) March 2023 Quarterly 

Bulletin. 

5 

01020304050Planning permissionsCommencementsCompletionsthousands 
                                                                        
   
 
THE RECOVERY AND RESILIENCE PLAN IS UNDERWAY 

to 

Ireland’s  recovery  and  resilience  plan 
(RRP) aims to address the key challenges 
the  green  and  digital 
related 
transitions,  and 
the  social  and 
to 
economic  recovery.  It  consists  of  9  reforms 
and  16  investments  that  are  supported  by 
EUR 915 million  in  grants,  representing  0.3% 
of  2019  GDP  (see  Annex  3  for  more  details). 
The first payment request, which covers 46 of 
the  109  milestones  and  targets  in  the  RRP 
(see Graph 2.1), is in preparation.  

Graph 2.1: Number of milestones and targets 
by instalment 

Source: European Commission 

The implementation of Ireland’s recovery 
and resilience plan is underway, however 
with  significant  delays.  Ireland  submitted 
an  amendment  of  its  plan  in  May  2023. 
Limited 
insufficient 
prioritisation have led Ireland to fall behind in 
the implementation process. Ireland has yet to 
submit  its  first  payment  request.  Preparation 
of a REPowerEU chapter is ongoing.  

resources 

and 

The  following,  more  detailed 
review  of 
measures being implemented under the RRP in 
no way implies formal Commission approval or 
rejection of any payment requests. 

6 

kick-started 

Ireland 
to 

Progress  made  in  implementing  the  RRP 
contributes  to  accelerating  the  green 
transition of Ireland. In 2021, retrofitting of 
public buildings in Dublin and in several other 
regions  commenced  with  the  appointment  of 
the  main  contractor  by  the  Office  of  Public 
Works. 
its 
also 
investments 
foster  sustainable  public 
transport  through  signing  the  procurement 
contract for its zero-emission rolling stock and 
awarding the contract related to the upgrading 
of  Cork's  Kent  station.  Action  on  biodiversity 
and  climate  change  adaptation  has  been 
accelerated by starting rehabilitation works of 
39 bogs in peatland areas. The national grand 
challenges  programme  is  underway;  the  first 
calls  for  funding  for  research  and  innovation 
supporting  the  green  and  digital  transitions 
were  launched  in  2022.  Additional  actions 
undertaken 
improve 
wastewater  treatment,  as  more  than  10 
wastewater  treatment  stations  started  to  be 
upgraded in 2022. Lastly, Ireland adopted the 
Climate  Action  and  Low  Carbon  Development 
Act,  with  accompanying  measures  being  the 
first carbon budgets, the update of the climate 
action plan, and the 2021 and 2022 increases 
in the carbon tax rate. 

expected 

are 

to 

integrated 

completed 

Several  digital  infrastructure  and  skills-
related  measures  are  contributing  to 
productivity-related 
addressing 
the 
Ireland 
challenges. 
configuration  of  an 
financial 
management  system  to  support  effective 
management of the health service. In addition, 
contracts  for  building  an  ePharmacy  system 
and  a  shared  government  data  centre  were 
awarded.  Ireland  also  launched  a  call  for 
projects  to  drive  the  digital  transformation  of 
Irish  enterprises.  Ireland  developed  relevant 
guidelines  to  apply  an  SME  test;  this  aims  to 
reduce  regulatory  barriers  to  the  business 
activity  of  SMEs.  Several  actions  contributing 
to  enhancing  productivity  by  improving  digital 
skills  were  also  implemented.  These  include 

050100150200250300350400450051015202530354045501st2nd3rd4th5thinstallmentInvestmentsReformsValue (rhs)No. of milestones& targetsEUR million 
 
   
provision of private care in public hospitals. 

a 

have 

public 

sectoral 

publishing 

Anti-money 

Several  reforms  that  can  contribute  to 
macroeconomic  stability  and  the  quality 
been 
institutions 
of 
implemented. 
laundering 
supervision  was  bolstered  by  carrying  out 
trust  or  company  service 
inspections  of 
risk 
providers, 
assessment  of  them,  and completing  a  report 
on  expanding  the  enforcement  toolkit  with 
financial  sanctions.  The  relevant  legislative 
framework  has  been  amended,  and  an 
economic  analysis  and  a  public  consultation 
published,  to  better  tackle  aggressive  tax 
planning strategies.  Looking ahead,  legislation 
applying  to  outbound  payments  (interests, 
royalties,  and  dividends)  is  expected  to  enter 
into  force  to  prevent  double  non-taxation.  On 
pensions,  a  report  by  the  Interdepartmental 
Pensions Reform and Taxation Group has been 
published 
and 
harmonisation  of  the  supplementary  pension 
landscape. Finally, Irish authorities have put in 
place  a  repository  system  for  monitoring  RRP 
implementation  and  have  taken  steps  to 
ensure sufficient administrative capacity. 

simplification 

the 

on 

to  high-speed  broadband 
the  upgrade 
connectivity 
in  750  primary  schools  and 
funding for ICT infrastructure in 3 415 primary 
and  post-primary  schools.  Finally,  Ireland  also 
published  its  long-term  strategies  on  adult 
digital  literacy  and  a  digital  strategy  for 
schools,  while  providing  laptops  to  around 
21 500  disadvantaged  further  and  higher 
education students. Looking ahead, the RRP is 
also expected to improve the efficiency of the 
census  collection  process  by  testing  an  online 
response option. 

recovery 

training  events,  and 

The  RRP  is  contributing  to  improving 
fairness  through  measures  on  skills, 
housing,  and  healthcare.  Numerous  work 
skills 
placements, 
opportunities  were  made  available  under  the 
work  placement  experience  programme  and 
skills  programme. 
the  SOLAS 
However,  so  far,  their  take-up  is  significantly 
below initial expectations. To help increase the 
supply  of  social  and  affordable  housing,  a 
reform of Ireland’s Land Development Agency 
has  taken  place.  In  addition,  three  schemes 
have  been 
increase  housing 
affordability  for  low-  and  medium-income 
households.  The  first  houses  have  now  been 
made available under each of these schemes. 
The new ‘public-only’ employment contract for 
hospital  consultants  (i.e.  specialised  doctors) 
has  been  implemented.  This  is  expected  to 
improve 
cost-
effectiveness,  accessibility  and  resilience  by 
alleviating  shortages  of  doctors  in  public 
hospitals  and  transitioning  away  from  the 

the  healthcare 

launched  to 

system’s 

Box 2: 

Box on key deliverables in 2023-2024 

  Completion of the retrofit work of Tom Johnson House in Dublin and other regionally located 

public offices. 

  Commencement of the electrification and double tracking work on the railway line connecting 

Glounthaune to Midleton. 

  Building  and  configuration  of  the  core  technical  IT  functionality  for  a  digital  hospital 

ePharmacy solution. 

  Testing of the online response option for the census by a sample of citizens. 

  Upskilling  activities  or  improved  learning  conditions  for  at  least  4 000  staff  members  and 

9 600 students at technological universities. 

  Entry  into  force  of  legislation  applying  to  outbound  payments  (interests,  royalties,  and 

dividends) to prevent double non-taxation. 

7 

 
 
 
FURTHER PRIORITIES AHEAD 

(ii) 

(iii) 

energy; 

Beyond those tackled in the recovery and 
resilience  plan  (RRP),  as  outlined  above, 
Ireland  faces  additional  challenges  not 
sufficiently covered in the plan. Challenges 
remain  notably  with  regard  to:  (i)  climate 
environmental 
action; 
sustainability;  (iv)  housing;  (v)  pensions;  (vi) 
health and long-term care; (vii) domestic SME 
labour  market 
productivity; 
integration  of  vulnerable  groups.  Addressing 
these  challenges  will  also  help  make  further 
progress  in  achieving  the  SDGs  where  Ireland 
further 
currently 
improvement,  namely 
clean  water  and 
sanitation  (SDG  6),  sustainable  cities  and 
communities  (SDG  11),  and  climate  action 
(SDG 13). 

shows 

room 

(viii) 

and 

for 

Accelerating the green transition 
remains a priority 

plan 

the  objectives  set  under 
Achieving 
Ireland’s  climate 
law  and  under  EU 
legislation  will  be  a  major  undertaking. 
The  climate  action  plan  2023  highlights  the 
wide-ranging  nature  of  the  changes  required, 
and  sets  objectives  and  actions  across  all 
It  remains  an 
sectors  of  the  economy. 
ambitious 
some  major 
despite 
linked  to  unspecified 
weaknesses,  mainly 
mitigation efforts up to 2030. Looking ahead, 
key challenges relate to: the transformation of 
the  power  sector;  the  transition  towards 
sustainable 
the 
decarbonisation  of  the  building  sector  via  the 
use  of 
renewable  energies  and  energy 
efficiency; and further emissions reductions in 
industry. Fossil fuels still make up the most of 
Ireland's  energy  mix,  despite 
rapid 
expansion  in  the  use  of  renewable  electricity. 
In  2021,  oil  accounted  for  48%  of  Ireland's 
energy  consumption  and  natural  gas  31%, 
while  12%  came  from  renewable  sources. 

transport 

modes; 

the 

Reducing Ireland’s reliance on fossil fuels is an 
essential part of ensuring security of supply. 

Curbing  emissions  from  agriculture  and 
land  use  will  be  challenging.  The  sectoral 
carbon  budgets  and  the  climate  action  plan 
2023 envisage a reduction in greenhouse gas 
(GHG)  emissions  from  agriculture  of  25%  by 
2030 compared with 2018. Achieving this will 
require  fully  onboarding  the  sector  with  an 
increased  focus  on  sustainable  agriculture. 
Finally, a mitigation target is yet to be set for 
the  land-use  sector  which  continues  to  be  a 
significant  source  of  emissions.  Setting  a 
target  for  the  sector  and  designing  ways  to 
achieve  it  is  a  priority  if  the  national  and  EU 
climate targets are to be achieved. 

Graph 3.1: Sectoral GHG emissions, 2030 
national target vs 2018 

(1) The definition of sectoral emissions ceilings and a 
2030 target for the land use, land-use change and 
forestry sector has been deferred. 
(*) Unallocated savings amount to about 15% of total 
targeted emissions in 2030. 
Source: Government of Ireland, Sectoral Emissions 
Ceilings, September 2022. 

require 

Achieving  80%  renewable  electricity  by 
2030 and ensuring a stable energy supply 
will 
structural 
shortcomings.  The  power  system  showed 
signs  of  vulnerability  in  2022,  with  capacity 
emergency 
adequacy 

addressing 

requiring 

issues 

8 

-606121824Electricity (-75%)Transport (-50%)Buildings - residential (-40%)Buildings - commercial (-45%)Industry (-35%)Agriculture (-25%)Other (-50%)Unallocated required saving (*)Million tonnes CO2 eq.20302018 
 
   
target 

measures  at  a  high  cost  for  public  finances. 
Renewable  energy  auctions  have  awarded 
large  volumes  of  new  capacity.  In  addition, 
regulatory  instruments  are  being  developed, 
such  as  a  new  planning  and  consenting 
framework for offshore wind energy. However, 
the  new 
implies  an  accelerated 
deployment  of  wind  and  solar  photovoltaic 
systems  at  a  pace  that  would  require  faster 
permitting  and  grid  connection  processes.  It 
in 
requires  major  upgrades 
also 
the 
transmission, 
storage 
and 
distribution, 
infrastructure,  and  flexibility  options  such  as 
demand response to absorb the large volumes 
of  variable  generation  and  avoid  curtailment. 
The  growing  energy  demand  from  data 
centres  also  poses  a  concern,  partly  because 
they  do  not  yet  offer  credible  options  to 
contribute to system flexibility. 

in  particular  on 

Energy  efficiency  –  in  particular  home 
energy upgrades and retrofitting – is key 
to achieving climate objectives. Challenges 
implementation. 
remain 
Despite  gearing  up  its  ambition,  Ireland  fell 
short of its 2020 energy efficiency target and 
has  not  yet  reversed  the  trend  of  increasing 
energy  consumption.  The  climate  action  plan 
sets a target for reducing emissions from the 
residential sector by retrofitting the equivalent 
of 500 000 homes to a building energy rating 
installing 
of  B2/cost  optimal,  as  well  as 
400 000  heat  pumps  in  existing  homes  to 
replace older, less efficient heating systems by 
end-2030. This  will  entail  approximately  30% 
of  the  housing  stock  being  upgraded  to 
warmer,  safer  and  more  comfortable  homes, 
with lower energy bills and emissions, thereby 
adding  value  to  these  assets.  Despite  the 
publication of the national retrofit plan as part 
of 
the  climate  action  plan  2021,  key 
challenges  and  barriers  remain  in  terms  of 
capacity constraints, particularly related to the 
labour.  Successful 
availability  of  skilled 
implementation  of  the  plan  will  be  key  to 
achieving energy efficiency targets. 

Labour  shortages  in  key  sectors  for  the 
green transition have increased in recent 
years,  thus  creating  bottlenecks  in  the 
transition to a net-zero economy. In 2022, 
labour  shortages  were  reported  in  Ireland  for 
12  occupations  that  required  specific  skills  or 

in  2015 

knowledge  for  the  green  transition,  including 
professionals, 
protection 
environmental 
engineering 
electrical 
professionals  and 
engineers   (7).  The  job  vacancy  rate  increased 
across key sectors, such as construction (from 
0.8% 
in  2022)  and 
to  1.3% 
manufacturing (from 0.6% in 2015 to 1.0% in 
2022),  with  both  sectors  standing  below  the 
EU  2022  averages  of  4.0%  and  2.3%, 
respectively.  In  2022,  labour  shortages  were 
reported as a factor constraining production in 
industry (for 46.8% of firms) and construction 
(for  60.3%  of  firms).  Upskilling  and  reskilling 
for  the  green  transition,  including  for  people 
most  affected  by  it,  and  promoting  inclusive 
labour  markets  are  essential  policy  levers  to 
accelerate  the  transition  to  net-zero  and 
ensure its fairness (see Annex 8). 

The  number  of  zero-emission  passenger 
cars is growing, but the number of public 
charging  points  struggles  to  keep  pace. 
Ireland’s climate action plan 2021 sets out an 
target  of  845 000  passenger 
ambitious 
electric  vehicles  and  95 000  low-emission 
vans  on  the  road  by  2030.  The  national  car 
and  van  fleet  accounts  for  almost  60%  of  all 
land  transport  emissions.  A  transition  to  low-
emission vehicles, including electric vehicles, is 
therefore  a  necessary  step  to  substantially 
reduce  transport  emissions.  In  July  2022,  the 
government  established  a  new  initiative:  zero 
emission vehicles Ireland. This is to coordinate 
the  work  on  incentivising  switching  to  electric 
vehicles  and  to  create  an  electric  vehicle 
charging network capable of staying ahead of 
demand.  Decarbonisation  of  the  transport 
sector  remains  key  to  an  overall  reduction  in 
greenhouse gas emissions. 

(7)  Data on shortages is based on European Labour 

Authority (2023), EURES Report on labour shortages 
and surpluses 2022. National authorities report through 
a questionnaire, based on administrative data and other 
sources as submitted by the EURES National 
Coordination Offices (definitions of shortages differ, 
thus data is not comparable across countries and 
covers a wide variety of sectors). Skills and knowledge 
requirements are based on the ESCO (European Skills 
Competences and Occupations) taxonomy on skills for 
the green transition (for occupations at ISCO 4-digit 
level of which there are 436 in total). Examples are 
identified based on their ESCO ‘greenness’ score and 
relevant sectors. 

9 

 
                                                 
in 
(55%) 

specialised 
inhibit 

Some  barriers  remain  to  developing 
further 
industry. 
Ireland’s  clean  tech 
Ireland  is  a  leader  in  power  management 
systems,  with  some  Irish  companies  ranking 
among the biggest European manufacturers of 
uninterruptible  power  supply  systems,  power 
distribution  units,  smart  meters  and  inverters. 
According  to  the  European  Investment  Bank, 
businesses  in  Ireland  have  accelerated  their 
investment  in  clean  tech,  with  the  share  of 
firms  investing  in  improving  energy  efficiency 
increasing from 24% in 2021 to 46% in 2022. 
However,  labour  shortages  reported  by  firms 
in  electrical  equipment  manufacturing   (8) 
construction 
(33%)  and 
activities   (9) 
tech 
clean 
development  and its  roll-out.  Moreover,  public 
investment  in  energy  related  R&I  –  an  EU 
Energy  Union  priority   (10)  –  decreased  from 
0.022%  of  GNI*  in  2014  to  0.09%  in  2021 
(0.025%  of  GDP  for  EU  average).  In  order  to 
reverse  this  trend,  the  Sustainable  Energy 
Authority  of  Ireland  has  begun  publishing 
yearly calls to fund innovative energy research 
development  and  demonstration  projects. 
Hurdles 
complex 
permitting  procedures,  which  are  hampering 
In 
the  deployment  of  renewable  energy. 
addition, procedural barriers for new wind and 
solar energy projects include permitting delays 
in 
and 
(see 
installing  outdated 
Annex 12). 

suboptimal  outcomes 

technologies   (11) 

resulting 

lengthy 

include 

and 

Ireland’s  waste  generation  continues  to 
rise  and  remains  above  the  EU  average. 
Municipal waste generation in Ireland remains 
higher  than  the  EU  average.  The  recently 
adopted  waste  action  plan  for  a  circular 
improve  the  country’s 
economy  aims  to 

(8)  NACE 27 – ‘Manufacture of electrical equipment’ code 
is used as a proxy for clean energy manufacturing 
industry as many clean energy technologies fall under 
this category. 

(9)  NACE 43 – ‘Specialised construction activities’ is used 
as a proxy for clean tech installation for example heat 
pumps and solar panels. 

(10)  Includes renewables, smart systems, efficient systems, 
sustainable transport, carbon capture, utilisation and 
storage, and nuclear safety, COM(2015) 80 final 
(energy union package). 

(11)  Single Market Enforcement Task Force (2022) Report 

2021-2022. 

but 

updated  waste 
the 
performance, 
management  plan  has  not  yet  been  adopted. 
Although Ireland is well above the EU average 
in  terms  of  resource  productivity,  its  circular 
(secondary)  use  of  materials  is  the  second 
lowest  in  the  EU.  In  addition,  between  2014 
and  2020,  the  circular  economy,  including 
waste  management,  saw  a  financing  gap 
estimated  at  EUR 879  million  per  year. 
Additional  investment  in  areas  such  as  eco-
design,  repair,  reuse  and  remanufacturing,  as 
well  as  expanding  viable  recycling  activities, 
will  be  necessary  to  reach  the  EU’s  circular 
economy  objectives.  Additional  investment  is 
also  needed  to  improve  the  infrastructure  for 
separate waste collection and treatment so as 
to  divert  waste  from  landfill  and  incineration, 
with a particular focus on plastic and biowaste. 
The  implementation  of  a  high-level  whole-of-
government  circular  economy  strategy  began 
in 2022. 

An  ageing  infrastructure  and  decades  of 
underinvestment have an effect on water 
services. Infrastructure investment is needed 
in  wastewater  collection  and 
treatment, 
reduction  of 
leaks  from  drinking  water 
systems  and  drinking  water  supply,  better 
water quality  and quantity monitoring. Ireland 
has  one  of  the  EU's  highest  rates  for  pipe 
leakage. The quality of drinking water remains 
a problem in certain areas. Some progress can 
be expected in the quality of Ireland’s bathing 
waters  to  reach  the  EU  average  rate  of 
bathing  sites  qualified  as  of  excellent  quality. 
Significant  degradation  of  water  quality  from 
is  not  sufficiently 
agricultural  expansion 
addressed   (12).  According 
the  OECD, 
nutrient  enrichment  from  agriculture  and 
untreated sewage (i.e. inappropriate treatment 
or sewer overflow when rainfall occurs) is the 
main 
for  water 
quality   (13) 
(see  also  Annex  5).  Nitrate 
concentration  in  groundwater  is  an  issue, 
particularly in the south-east and south. 

compromising 

factor 

to 

(12)  These challenges are further corroborated by low 
resilience capacities in the area of ‘ecosystems, 
biodiversity, sustainable agriculture’. 

(13)  OECD (2022) Financing a Water Secure Future. 

10 

 
                                                 
                                                 
Addressing persistent social and 
affordable housing shortfalls 

Graph 3.2: Social housing new build 

Construction  of  social  housing  under  the 
‘housing  for  all’  plan  is  progressing,  but 
faces  significant  challenges  related  to 
construction  cost  increases  and  capacity 
constraints. Even though new social  housing 
units  built  in  2022  increased  by  more  than 
43%  year-on-year  to  around  7 500,  the 
government missed its initial target by around 
1 500  units.  This  was  mainly  due 
to 
construction  materials  inflation,  rising  energy 
costs  and  supply  chain  challenges,  which 
delayed many projects and public tenders   (14). 
In  May  2022,  the  government  issued  the 
‘inflation  -  supply  chain  delay  cooperation’ 
framework  to  absorb  70%  of  the  additional 
costs.  Social  housing  remains  high  on  the 
government  agenda  and  increasing  capital 
funding 
been 
for 
committed   (15).  Action 
this  area  will 
contribute  to  achieving  the  national  target  of 
reducing  poverty  by  at 
least  90 000 
individuals  by  2030 (see Annex  14).  However, 
risks  to  social  housing  delivery  in  the  coming 
years  remain  high  due  to  higher  financing 
costs and capacity constraints. 

builds 
in 

new 

has 

(1) New build excludes housing units delivered through 
leasing or acquisition of existing properties. 
(2) New build targets as originally included in the 
‘rebuilding Ireland’ and ‘housing for all’ plans. 
Source: Department of Housing, Local Government and 
Heritage 

role 

The  overall  capacity  of  the  construction 
sector  remains  a  significant  constraint 
requiring complex reforms. In response, the 
government  has  been  taking  a  much  more 
active 
the  Land 
in  housing,  using 
Development Agency to unlock land not being 
developed  by  the  private  sector  (also  as  part 
of  the  RRP)  and  building  on  state  lands, 
although  with  delays.  Recently  government 
funding has been made available to bridge the 
viability  gap  between  building  costs  and  the 
market sale price of selected projects. Looking 
ahead,  effective  implementation  of  several 
reforms  in  the  ‘housing  for  all’  plan  will  be 
essential,  particularly  for  those  related  to 
planning,  land  management,  vacant  housing, 
labour  force  attraction  from  abroad,  reskilling 
and  upskilling  of  the  available  labour  force, 
and diversifying production methods   (16). 

(14)  Department of Housing, Local Government and Heritage 

(2022) Overview of Activities and Structure. 

(15)  Department of the Taoiseach (2023) Housing for All – 

Q4 2022 Progress Report. 

(16)  Egan, Kenny and McQuinn (2022) Increasing future 

housing supply: what are the implications for the Irish 
Economy? 

11 

01 0002 0003 0004 0005 0006 0007 0008 0009 00010 0002016201720182019202020212022Social housing new buildTargethousingunits 
                                                 
   
                                                 
Graph 3.3: Main factors limiting building 
activity 

affordability gap, close and regular monitoring 
of  these  demand-based  measures  will  be 
crucial  so that they can be quickly adjusted if 
any inflationary pressures arise. 

Making the pension system robust 
to the costs of ageing 

July to December 2022 average. 
Box plots show five summary statistics: minimum, 25th 
percentile, median, 75th percentile, and maximum. 
Source: DG ECFIN - Business and consumer survey 

Housing 
further 
affordability 
deteriorated because of persistent supply 
shortages,  combined  with  higher-than-
expected  demographic  growth.  In  2022, 
rents  increased  by  9.8%  and  the  average 
monthly  rent  for  new  tenancies  in  Dublin 
reached EUR 2 000   (17). At the same time, the 
number  of  years  of  gross  disposable  income 
required  by  an  average  income  household  to 
buy  a  100 m2  dwelling  increased  to  17.3  in 
2022  –  the  second  highest  level  in  the  EU. 
Availability  of  affordable  housing  is  key  for 
social  cohesion and competitiveness. Business 
considers  affordability  the  single  greatest 
retaining 
impediment 
talented  workers   (18).  The  government  has 
responded  with  a  commitment  to  fund,  on 
average,  2 000  cost-rental  homes  per  year 
until  2030   (19).  In  addition,  the  government 
introduced  a  set  of  demand-based  measures 
aimed  at  first-time  buyers,  such  as  extending 
the  help-to-buy  scheme  and  introducing  the 
shared-equity  scheme.  A  set  of 
these 
measures  are  also  reflected  in  the  Irish  RRP. 
While  these  have  the  potential  to  bridge  the 

to  attracting  and 

(17)  Residential Tenancy Board (2022) Q2 Rental Index. 

(18)  IBEC (2023) Better Housing Better Business. 

(19)  Cost rental is a new form of public housing in Ireland, 
aimed at people who are above the social housing 
income limits, with a target to achieve rents at least 
25% below market level. 

The 

ageing 

projected 

increases 

population 

An 
requires 
safeguarding the pension system against 
rising  costs.  The  share  of  the  population 
older  than  64  relative  to  that  of  working-age 
population  (20-64)  is  projected  to  almost 
double  between  2019  and  2070.  Because  of 
this, public pension expenditure is projected to 
increase from 4.6% of GDP in 2019 to 7.6% in 
2070   (20). 
in 
expenditure are driven by the assumption that 
there will be no increases in pension age. The 
reform  announced  in  September  2022  keeps 
the  pension  age  at  66.  This  contrasts  with  a 
recommendation  by  an  independent  pension 
commission  to 
increase  the 
incrementally 
pension  age  by  3 months  each  year, 
commencing in 2028, to reach 67 in 2031. The 
same  proposals  also  envisage 
further 
increases  of  3 months  every  second  year 
thereafter, thus reaching 68 by 2039. Current 
government  policy  puts  the  entire  adjustment 
to  age-related  cost  pressures  on  higher 
pension contributions, alongside incentives for 
voluntarily  working  beyond  the  state  pension 
age  of  66.  In  2023,  the  government  will 
present  a  roadmap  for  a  gradual  increase  in 
social  insurance  contributions  between  2024 
and 2034. 

Increasing the accessibility and 
cost-effectiveness of health and 
long-term care 

The  public  healthcare  system  faces 
challenges 
capacity 
lack  of  universal 
constraints  and  a 
fiscal 
coverage, 

related 

raising 

also 

to 

(20)  European Commission (2021) Ageing Report. 

12 

0102030405060708090100InsufficientdemandShortage oflabour forceShortage ofmaterialand/orequipmentOtherfactorsFinancialconstraintsEuropean UnionIreland% of respondents 
   
                                                 
                                                 
sustainability  concerns.  Despite  significant 
improvements  over  the  past  decade,  Ireland 
still  faces  a  shortage  of  doctors,  with  fewer 
practising  doctors  than  the  EU  average  (see 
Annex  16).  Ireland  has  one  of  the  highest 
numbers  of  medical  graduates  per  capita. 
However,  few  of  these  graduates  remain  in 
Ireland; they are mainly international students 
faced with uncompetitive working conditions in 
the Irish healthcare system and limited options 
to  complete  their  postgraduate  practice  in 
Ireland.  The  shortage  of  doctors  limits  the 
healthcare  system’s  capacity  to  provide  care, 
resulting  in  long  waiting  lists  in  both  hospital 
and  outpatient  settings.  This  particularly 
affects  poorer  patients  who  cannot  afford 
private  health  services.  Shortages  can  also 
drive  costs  up  by  requiring  costly  temporary 
solutions  such  as  overtime  or  the  use  of 
agency workers. In addition, Ireland is the only 
EU  country  without  universal  primary  care 
coverage,  which  leads  to  an  overuse  of  more 
expensive  hospital  care. 
In  2020,  overall 
health  expenditure  per  capita  stood  slightly 
above the EU average   (21). Looking ahead, the 
healthcare  system  is  expected  to  come  under 
further  pressure  from  population  ageing,  with 
a  projected  1.4  percentage  points  of  GDP 
increase  in  public  expenditure  by  2070  vs  a 
0.9 percentage points of GDP increase for the 
EU   (22). 

in 

to  a 

Ireland 

care 
related 

faces 
Long-term 
challenges 
focus  on 
institutional  care  over  more  accessible 
and cost-effective home care. The share of 
the  inactive  population  for  reasons  of  caring 
responsibilities  was  27.2%,  above  the  EU 
average  of  21.4%   (23).  This  suggests  unmet 
needs,  especially  in  home  care.  At  the  same 
time, the public long-term care system focuses 
on  institutional  care  over  the  more  cost-
insufficient 
effective  home  care. 
provision  of  community-based  social  services 
often  means  people  with  disabilities  are 
dependent  on  institutional  care.  Long-term 
care  expenditure  in  Ireland  stood  at  2.9%  of 

Indeed, 

(21)  Health spending in Ireland stood at around 13.2% of 
GNI* (or 7.1% of GDP) in 2020 – compared to an EU 
average of 10.9% of GDP. 

(22)  European Commission (2021) Ageing Report. 

long-term  care 

GNI* (1.6% of GDP) in 2020, well above the EU 
average  of  1.8%  of  GDP.  As  with  healthcare, 
public  expenditure  on 
is 
expected  to  rise  due  to  an  ageing  population. 
This rise will be almost double the EU average 
by  2070,  at  1.9  percentage  points  of  GDP  in 
Ireland  vs  1.1  percentage  points  of  GDP  for 
the  EU   (24).  This  is  driven  by  one  of  the 
highest expected increases in the share of old-
age dependents in the EU. 

The  government 
is  taking  action  to 
address these long-standing challenges in 
health  and 
long-term  care.  Regarding 
healthcare,  the  RRP  contains  key  Sláintecare 
reforms, including the entry into operation of a 
new  ‘public-only’  employment  contract  for 
hospital  consultants  (see  Section  2).  At  the 
same time, the healthcare reforms included in 
the  RRP  do  not  address  the  lack  of  universal 
primary  care  coverage  and  only  partially 
address  fiscal  sustainability  concerns.  Outside 
the RRP, the ongoing Sláintecare reforms also 
aim  to  set  up  a  statutory  home  care  service, 
which  would  reduce  the  need  for  institutional 
care.  Fully 
the  Sláintecare 
reforms  has  the  potential  to  increase  the 
accessibility  of  health  and  long-term  care, 
thereby 
the  demand  for  more 
complex  and  costly  services.  However,  the 
timing, cost, and exact scope of some reforms 
are yet to be fully determined. 

implementing 

reducing 

Addressing productivity and 
employment gaps 

Ireland’s  SMEs  and  domestic  industry 
face  a  productivity  differential.  Labour 
productivity growth in Ireland is the highest in 
the EU, but the productivity gap between large 
enterprises  and  SMEs  is  large  and  widening. 
Challenges such as skills shortages and supply 
chain  disruptions  are  particularly  acute  in 
Ireland  and  weigh  asymmetrically  heavy  on 
the  growth  of  SMEs.  In  2022,  92%  of  firms 
reported a lack of skilled staff as a barrier to 
long-term  investment  –  one  of  the  highest 
percentages  in  the  EU.  In  addition,  more  than 

(23)  The proportion is even higher for women at 38.7%. 

(24)  European Commission (2021) Ageing Report. 

13 

 
                                                 
                                                 
in 

two  businesses  cited  materials 
one 
shortages in industry and construction. Various 
challenges  hold  back 
Ireland’s  SMEs  and 
domestic industries from tapping the potential 
of the single market. They relate to access to 
finance,  late  payments,  preparedness  for  the 
twin transitions, poor infrastructure, low levels 
of  R&D  investment,  and  dependence  on  tax 
credits (see Annexes 11 and 12). 

to 

the 

access 

increase 

potential 

sizeable 

challenges 

households 

of 
Intreo, 

People  with  disabilities,  single  parents, 
Travellers,  and  persons  living  in  very-
still 
low-work-intensity 
experience 
in 
accessing  labour  markets.  The  new  ‘early 
engagement’  method 
public 
if  sufficiently 
employment  service 
resourced  with  specialised  caseworkers,  has 
the 
to 
employment  for  disabled  jobseekers.  At  the 
same time, strengthening support services for 
employers  who  hire  people  with  disabilities 
could  facilitate  recruitment  and  retainment. 
Both  disabled  people  and  Travellers  tend  to 
have low qualifications, pointing to a need for 
a  more  inclusive  education  system.  Caring 
responsibilities  and  high  childcare  costs, 
in  recent 
despite  decreasing  significantly 
years,  remain  major  barriers  to  employment, 
areas   (25). 
especially 
Regulations  on  flexible  working  and  more 
sufficient  welfare  support  for  working  single 
parents 
labour  market 
increase 
participation.  The  government  has  launched 
several  actions  under  the  pathways  to  work 
2021-2025  strategy;  however,  in  many  cases 
jobseekers  has 
engagement  of  (potential) 
been 
and 
low.  Continuous  monitoring 
cooperation with stakeholders will be essential 
to  improve  the  take-up  and  effectiveness  of 
these  schemes.  As 
the  above-mentioned 
groups  face  disproportionate  risks  of  poverty 
and  social  exclusion,  improved  social  services 
and social protection will be key for Ireland to 
reach its poverty reduction commitment under 
the  European  Pillar  of  Social  Rights  action 
plan. 

disadvantaged 

could 

in 

(25)  Pobal (2022) Annual Early Years Sector Profile Report 

2020/2021, p. 40. 

14 

 
                                                 
Ireland  should  significantly  accelerate  the 
implementation  of  its  recovery  and  resilience 
plan, also by ensuring sufficient resources, and 
swiftly 
the 
REPowerEU  chapter  with  a  view  to  rapidly 
starting its implementation. 

the  addendum  and 

finalise 

Beyond  the  reforms  and  investments  in 
the RRP, Ireland would benefit from: 

  fostering investment in electricity networks, 
flexibility  and storage capacity to absorb a 
higher  share  of  power  generated  from 
variable sources of energy and to mitigate 
increasing electricity demand; 

  improving  permitting,  planning  and  grid 
connection  procedures  to  accelerate  the 
roll-out of renewables; 

reducing  waste 

  addressing  financing  gaps  to  increase  the 
the  waste  management 
efficiency  of 
system, 
production, 
increasing  reused  and  recycled  content, 
achieving lower incineration, and separating 
more efficiently the collection of recyclable 
waste; 

  supporting  productivity  growth  for  SMEs 

and domestic industries; and 

  further  promoting  skills  needed  for  the 

green transition.  

KEY FINDINGS 

Ireland’s  recovery  and  resilience  plan 
(RRP)  includes  measures  to  address  a 
series  of 
its  structural  challenges 
through: 

  accelerating  retrofitting  and  improving  the 

energy efficiency of buildings; 

  promoting  safer  and  cleaner  wastewater 

management systems; 

  ensuring  that  the  expected  increase  in 
pension  costs  is  financed  in  a  structural 
and transparent manner; 

  tackling aggressive tax planning; 

  strengthening 
supervision; 

anti-money 

laundering 

  increasing 

the  supply  of  social  and 
affordable  housing,  in  particular  through 
implementing  the  national  ‘housing  for  all’ 
plan effectively; 

  implementing  the  Sláintecare  reforms,  in 
particular the parts related to improving the 
cost-effectiveness 
healthcare 
of 
system,  workforce  planning,  and  long-term 
care,  and  ensuring  universal  access  to 
health services; 

the 

  increasing 

the 

level  of  public  R&D 
investment  and  reducing  the  dependence 
on  tax  credits,  in  favour  of  direct  support 
for R&D activities; and 

employment 

and 
including  through  the 

  supporting 
social 
inclusion, 
labour 
market  integration  of  vulnerable  groups 
and by developing skills. 

At  the  same  time,  due  to  the  modest  size  of 
the  plan,  further  efforts  on  the  above-
mentioned  challenges  beyond  the  RRP  are 
needed. 

15 

 
 
ANNEXES 

 
 
 
 
LIST OF ANNEXES 

Cross-cutting indicators 

A1.  Sustainable Development Goals 

A2.  Progress in the implementation of country-specific recommendations 

A3.  Recovery and resilience plan - overview 

A4.  Other EU instruments for recovery and growth 

A5.  Resilience 

Environmental sustainability 

A6.  European Green Deal 

A7.  Energy security and affordability 

A8.  Fair transition to climate neutrality 

Productivity 

A9.  Resource productivity, efficiency and circularity 

A10.  Digital transformation 

A11.  Innovation 

A12.  Industry and single market 

A13.  Public administration 

Fairness 

A14.  Employment, skills and social policy challenges in light of the European Pillar of Social Rights 

A15.  Education and training 

A16.  Health and health systems 

A17.  Economic and social performance at regional level 

Macroeconomic stability 

A18.  Key financial sector developments 

A19.  Taxation 

A20.  Table with economic and financial indicators 

A21.  Debt sustainability analysis 

22 

22 

24 

27 

29 

31 

32 

32 

37 

41 

43 

43 

46 

48 

50 

54 

56 

56 

59 

61 

63 

65 

65 

68 

70 

71 

19 

 
 
  
 
LIST OF TABLES 

A2.1. 
Summary table on 2019-2022 CSRs 
A3.1. 
Key elements of the Irish RRP('s) 
A5.1. 
Resilience indices summarising the situation across RDB dimensions and areas 
A6.1. 
Indicators tracking progress on the European Green Deal from a macroeconomic perspective 
A7.1. 
Key Energy Indicators 
A8.1. 
Key indicators for a fair transition in Ireland 
A9.1. 
Overall and systemic indicators on circularity 
A10.1.  Key Digital Decade targets monitored by DESI indicators 
A11.1.  Key innovation indicators 
A12.1. 
Industry and the Single Market 
A13.1.  Public administration indicators 
A14.1.  Social Scoreboard for Ireland 
A14.2.  Situation of Ireland on 2030 employment, skills and poverty reduction targets 
A15.1.  EU-level targets and other contextual indicators under the European Education Area strategic framework 
A16.1.  Key health indicators 
A17.1.  Selected indicators at regional level in Ireland 
A18.1.  Financial soundness indicators 
A19.1.  Taxation indicators 
A20.1.  Key economic and financial indicators 
A21.1.  Debt sustainability analysis - Ireland 
A21.2.  Heat map of fiscal sustainability risks - Ireland 

LIST OF GRAPHS 

A1.1. 
Progress towards the SDGs in Ireland in the last 5 years 
A2.1. 
Ireland’s progress on the 2019-2022 CSRs (2023 European Semester) 
A3.1. 
Share of RRF funds contribution to each policy pillar 
A4.1. 
Cohesion policy funds 2021-2027 in Ireland: budget by fund 
A4.2. 
Synergies between cohesion policy funds and the RRF with its six pillars in Ireland 
A4.3. 
Cohesion policy funds contribution to the SDGs in 2014-2020 and 2021-2027 in Ireland 
A6.1. 
Thematic – greenhouse gas emissions from the effort sharing sectors in Mt CO2eq, 2005-2021 
A6.2. 
Energy mix (top) and electricity mix (bottom), 2021 
A6.3. 
Thematic – environmental investment needs and current investment, p.a. 2014-2020 
A7.1. 
Share of gas consumption per sector, 2021 
A7.2. 
Venture capital investments in climate tech start-ups and scale-ups in Ireland 
A8.1. 
Fair transition challenges in Ireland 
A8.2. 
Distributional impacts of energy prices due to rising energy expenditure (2021-2023) 
A9.1. 
Trend in material use 
A9.2. 
Treatment of municipal waste 
A11.1.  EIS performance 2015-2022 
A11.2.  Public expenditure on R&D as % of GDP and GNI* 
A12.1.  Labour productivity comparison for the foreign and domestic sectors 
A12.2.  Business environment and productivity drivers 
A13.1. 
A16.1.  Life expectancy at birth, years 
A16.2.  Projected increase in public expenditure on healthcare over 2019-2070 
A17.1.  Average GDP per capita growth (2011-2020) vs GDP per capita in 2010 
A17.2.  Real GVA per worker (2000-2020) 
A19.1.  Outbound foreign direct investment (FDI) payments from Ireland and the rest of the EU-27 relative to the size of their 
economies (in % of GDP and GNI * on the left) and in absolute terms (in billions of euro on the right), in 2021 

Ireland. a) Regulatory impact assessment, b) Stakeholder engagement and c) Ex post evaluation of legislation 

A19.2.  Tax wedge for single and second earners as a % of total labour costs, 2022 

25 
28 
31 
32 
37 
41 
43 
46 
48 
50 
55 
56 
57 
59 
61 
63 
65 
68 
70 
73 
73 

23 
24 
27 
29 
29 
30 
32 
33 
34 
37 
39 
41 
42 
43 
43 
48 
48 
50 
52 
55 
61 
61 
63 
63 

69 
69 

20 

 
 
 
LIST OF MAPS 

A17.1.  Regional Competitiveness Index 2022 

64 

21 

 
 
 
 
CROSS-CUTTING INDICATORS 
ANNEX 1: SUSTAINABLE DEVELOPMENT GOALS 

This  Annex  assesses  Ireland’s  progress  on 
the  Sustainable  Development  Goals  (SDGs) 
along  the  four  dimensions  of  competitive 
sustainability.  The  17  SDGs  and  their  related 
indicators  provide  a  policy  framework  under  the 
UN’s  2030  Agenda  for  Sustainable  Development. 
The  aim  is  to  end  all  forms  of  poverty,  fight 
inequalities  and  tackle  climate  change  and  the 
environmental crisis, while ensuring that no one is 
left  behind.  The  EU  and  its  Member  States  are 
committed  to  this  historic  global  framework 
agreement  and  to  playing  an  active  role  in 
maximising  progress  on  the  SDGs.  The  graph 
below  is  based  on  the  EU  SDG  indicator  set 
developed  to monitor progress  on  the  SDGs  in  an 
EU context. 

While  Ireland  is  improving  on  most  of  the 
indicators  related  to  environmental 
SDG 
sustainability, it is moving away from SDG 6 
(Clean  water  and  sanitation),  SDG  11 
(Sustainable  cities  and  communities)  and 

SDG  15  (Life  on  land).  It  needs  to  catch  up 
with the EU average, in particular on SDG 13 
(Climate  action)  and  SDG  12  (Responsible 
consumption and production). Ireland has made 
some progress on climate mitigation, including on 
net greenhouse gas emissions (SDG 13; from 15.1 
tonnes per capita in 2016 to 13.8 tonnes in 2021). 
Nevertheless,  it  remains  above  the  EU  average 
(7.4  tonnes  per  capita  in  2021).  In  addition,  net 
greenhouse gas emissions from land use, land use 
change  and  forestry  have  also  increased  (from 
93.5  tonnes  CO2  eq.  per  km3  in  2016  to  109.9 
tonnes  in  2021)  and  remain  significantly  higher 
than  the  EU  average  (-50.1  tonnes).  Ireland’s 
ambitions  in  tackling  climate  challenges  have 
increased  with  its  climate  action  plan,  which  was 
introduced  in  2019  and  updated  annually.  On 
waste generation and management (SDG 12), the 
circular  material  use  rate  increased  further  from 
1.7%  in  2015  to  2.0%  in  2021,  but  remains 
significantly  lower  than  the  EU  average  (11.7%). 
Ireland’s material footprint decreased  (from 11.2 

Graph A1.1: Progress towards the SDGs in Ireland in the last 5 years 

For detailed datasets on the various SDGs, see the annual Eurostat report ‘Sustainable development in the European Union’; for 
details on extensive country-specific data on the short-term progress of Member States: Key findings – Sustainable development 
indicators – Eurostat (europa.eu). The status of each SDG in a country is the aggregation of all indicators for the specific goal 
compared to the EU average. A high status does not mean that a country is close to reaching a specific SDG, but signals that it is 
doing better than the EU on average. The progress score is an absolute measure based on the indicator trends over the past 5 
years. The calculation does not take into account any target values as most EU policy targets are only valid for the aggregate EU 
level. Depending on data availability for each goal, not all 17 SDGs are shown for each country. 
Source: Eurostat,  latest update of early April 2023, except for the EU Labour Force Survey (LFS) indicators released on 27 April 
2023. Data mainly refer to 2016-2021 or 2017-2022. 

22 

 
 
 
 
 
 
tonnes  per  inhabitant  in  2015  to  10.8  tonnes  in 
2020),  below  the  EU  average  (13.7  tonnes  in 
2020). In 2020, Ireland introduced a waste action 
plan  for  a  circular  economy,  which  set  out  its 
overall  policy  on  the  transition  to  a  circular 
economy  and  waste  prevention.  On  SDG  11 
(Sustainable  cities  and  communities),  Ireland  is 
moving away from the goal due to a deterioration 
in the quality of life in cities and communities. The 
severe  housing  deprivation  rate  increased  from 
1.2% of the population in 2015 to 1.4% in 2020, 
although  this  is  lower  than  the  EU  average  of 
is  a  higher  percentage  of  the 
4.3%.  There 
population  reporting  crime,  violence  or  vandalism 
in their area (11.3% compared to the EU  average 
of  10.7%  in  2020).  Ireland  also  has  a  lower 
percentage of the population connected to at least 
secondary wastewater treatment (SDG 6; 61.9% in 
2019  compared  to  an  EU  average  of  81.1%  in 
2020. Ireland is also moving away from target of 
SDG  15  (life  on  land)  as  the  percentage  of  total 
land  area  covered  by  forests  decreased  from 
22.4% in 2015 to 19.0% in 2018. 

Ireland  performs  well  on  SDG  indicators 
related to fairness (SDGs 1, 3, 4, 5, 7, 8, 10). 
The  country  performs better  than  the  EU  average 
and  is  making  progress  on  several  indicators 
related  to  inequality,  poverty,  inclusive  growth, 
health  and  well-being,  education  and  gender 
equality.  Ireland  performs  well  on  the  severe 
material and social deprivation rate (SDG 1), as it 
fell from 8.0% of the population in 2016 to 5.1% 
in  2021  compared  to  the  EU  average  of  6.3%  in 
2021.  In  addition,  the  in  work  at-risk-of-poverty 
rate decreased (SDG 1; 4.3% in 2021 compared to 
5.1%  in  2016).  The  country  has  improved  on 
several  fairness-related  indicators  such  as  self-
reported  unmet  needs  for  medical  care  (SDG  3; 
2.0%  in  2021  compared  to  2.5%  in  2016)  and 
early leavers from education and training (SDG 4; 
3.7%  in  2022  compared  to  5.0%  in  2017).  There 
were  improvements  in  the  population  unable  to 
keep their  homes  adequately  warm  (SDG  7;  3.2% 
in  2021  compared  to  5.9%  in  2016,  against  the 
EU  average  of  6.9%  in  2021)  and  the  long-term 
unemployment  rate 
in  2022 
compared  to  3.0%  in  2017),  while  the  income 
share  of  the  bottom  40%  of  the  population  (SDG 
10)  increased  to  23.3%  of  income  in  2021  from 
21.6% in 2016.  

(SDG  8;  1.3% 

is 

Ireland 
improving  on  some  SDGs  on 
productivity (SDGs 4 and 8), but still needs to 
catch  up  with  the  EU  average  in  some  (SDG 

9).  The  percentage  of  adults  with  at  least  basic 
digital skills (SDG 4; 70.5% in 2021) is above the 
EU  average  (53.9%),  although  this  leaves  almost 
one-third  of  the  population  aged  16-74  lacking 
basic  digital  skills.  On  SDG  8  (Decent  work  and 
economic growth), the percentage of young people 
not in employment, education or training aged 15-
29 dropped from 12.8% in 2017 to 8.7% in 2022 
and  is  below  the  EU  average  (11.7%  in  2022). 
However, Ireland is lagging behind the EU average 
on SDG 9 (Industry, innovation and infrastructure). 
The  Irish  research  and  innovation  system  suffers 
from  underinvestment,  as  shown  by  gross 
domestic  expenditure  on  R&D  (SDG 9;  1.06%  of 
GDP  in  2021  compared  to  the  EU  average  of 
2.26%).  However,  when  looking  at  modified  gross 
national income (GNI*), R&D expenditure (1.93% of 
GNI*) (26) was nearer to the EU average (see Annex 
11). The Irish RRP includes significant reforms and 
investments  aimed  at  boosting  innovation  and 
digital  skills.  In  particular,  the  National  Grand 
Challenges  programme  incentivises  innovation  in 
green, climate and digital solutions.  

increased 

Ireland  performs  well  on  SDG  indicators 
related  to  macroeconomic  stability  (SDGs  8 
and  16).  The  country  performs  well  on  SDG  8 
(Decent  work  and  economic  growth)  and  SDG  16 
(Peace, justice and strong institutions). Ireland has 
enjoyed  significant  growth  in  real  GNI*  per  capita 
(SDG 8; from EUR 40 410 in 2016 to EUR 50 889 
from 
in  2021).  GDP  per  capita 
EUR 53 400  in  2017  to  EUR 77 490  in  2022, 
compared  with  the  EU  average  of  EUR 28 820. 
Despite  these  improvements,  Ireland  still  faces 
challenges,  particularly  on  the  sustainability  of 
public  finances.  The  Irish  RRP  includes  several 
measures related to taxation and pensions. Ireland 
continues to improve on the quality of institutions 
(SDG 16). As for access to justice (SDG 16), Ireland 
has 
total 
improved  on  general  government 
expenditure  on  law  courts,  increasing  it  from  EUR 
125  in  2016  to  EUR  150  per  capita  in  2021  (EU 
average EUR 107 in 2021).  

As the SDGs form an overarching framework, any 
links  to  relevant  SDGs  are  either  explained  or 
depicted with icons in the other Annexes. 

(26)  GNI* excludes globalisation effects and more accurately 

reflects the income standards of Irish residents than GDP. 
See Central Statistics Office, Modified GNI for more details. 

23 

 
 
                                                 
ANNEX 2: PROGRESS IN THE IMPLEMENTATION OF COUNTRY-SPECIFIC 
RECOMMENDATIONS 

Graph A2.1: Ireland’s progress on the 2019-2022 
CSRs (2023 European Semester) 

The Commission has assessed the 2019-2022 
country-specific  recommendations  (CSRs) (53) 
addressed to Ireland as part of the European 
Semester.  These  recommendations  concern  a 
wide  range  of  policy  areas  that  are  related  to  15 
of  the  17  Sustainable  Development  Goals  (see 
Annexes  1  and  3). The  assessment  considers  the 
policy  action  taken  by  Ireland  to  date (54)  and  the 
commitments  in  its  recovery  and  resilience  plan 
(RRP) (55).  At  this  stage  of  RRP  implementation, 
83%  of  the  CSRs  focusing  on  structural  issues 
from  2019-2022  have  recorded  at  least  ‘some 
progress’,  while  17%  recorded  ‘limited  progress’ 
(see  Graph  A2.1).  As  the  RRP  is  implemented 
further,  considerable  progress 
in  addressing 
structural CSRs is expected in the years to come. 

Source: European Commission. 

(53)  2022 CSRs: EUR-Lex - 32022H0901(07) - EN - EUR-Lex 

(europa.eu) 
2021 CSRs: EUR-Lex - 32021H0729(07) - EN - EUR-Lex 
(europa.eu) 
2020 CSRs: EUR-Lex - C:2020:282:TOC - EN - EUR-Lex 
(europa.eu) 
2019 CSRs: EUR-Lex - 32019H0905(07) - EN - EUR-Lex 
(europa.eu) 

(54)  Including policy action reported in the national reform 

programme and in Recovery and Resilience Facility (RRF) 
reporting (twice a year reporting on progress in implementing 
milestones and targets and resulting from the payment 
requests assessment). 

(55)  Member States were asked to effectively address all or a 

significant subset of the relevant country-specific 
recommendations issued by the Council in 2019 and 2020 in 
their RRPs. The CSR assessment presented here considers the 
degree of implementation of the measures included in the 
RRP and of those carried out outside of the RRP at the time 
of assessment. Measures laid down in the Annex of the 
adopted Council Implementing Decision on approving the 
assessment of the RRP, which are not yet adopted or 
implemented but considered credibly announced, in line with 
the CSR assessment methodology, warrant ‘limited progress’. 
Once implemented, these measures can lead to 
‘some/substantial progress or full implementation’, 
depending on their relevance. 

24 

Limited progress17%Some progress52%Substantial progress19%Full implementation12% 
 
                                                 
 
             
 
 
 
Table A2.1: Summary table on 2019-2022 CSRs 

(Continued on the next page) 

25 

IrelandAssessment in May 2023*RRP coverage of CSRs until 2026Relevant SDGs2019 CSR 1Limited ProgressAchieve the medium-term budgetary objective in 2020. Use windfall gains to accelerate the reduction of the general government debt ratio.Not relevant anymoreNot applicableSDG 8, 16Limit the scope and number of tax expenditures, and broaden the tax base. Limited ProgressSDG 8, 10, 12Continue to address features of the tax system that may facilitate aggressive tax planning, and focus in particular on outbound payments.Limited ProgressRelevant RRP measures being planned as of 2020SDG 8, 16Addresstheexpectedincreaseinage-relatedexpenditurebymakingthehealthcaresystemmorecost-effectiveandbyfullyimplementingpensionreformplans.Some ProgressRelevant RRP measures being planned as of 2020, 2021SDG 3, 82019 CSR 2Some ProgressProvide personalised active integration support and facilitate upskilling, in particular for vulnerable groups and people living in households with low work intensity.Some ProgressRelevant RRP measures being planned as of 2021SDG 4, 8, 10Increase access to affordable and quality childcare.Substantial ProgressSDG 4, 52019 CSR 3Some ProgressFocus investment-related economic policy on low carbon and energy transition, the reduction of greenhouse gas emissions, Substantial ProgressRelevant RRP measures being planned as of 2020, 2021, 2022SDG 7, 9, 10, 11, 13sustainable transport,Some ProgressRelevant RRP measures being planned as of 2022SDG 10, 11water, Some ProgressRelevant RRP measures being planned as of 2021, 2022SDG 6, 10, 11, 12, 15digital infrastructure Some ProgressRelevant RRP measures being planned as of 2021, 2022, 2023SDG 9, 10, 11and affordable and social housing, taking into account regional disparities.Some ProgressRelevant RRP measures being planned as of 2021SDG 1, 2, 8, 10, 11Implement measures, including those in the Future Jobs strategy, to diversify the economy and improve the productivity of Irish firms – small and medium enterprises in particular - by using more direct funding instruments to stimulate research and innovation Some ProgressRelevant RRP measures being planned as of 2025SDG 8, 9and by reducing regulatory barriers to entrepreneurship.Some ProgressRelevant RRP measures being planned as of 2022SDG 8, 92020 CSR 1Some ProgressTakeallnecessarymeasures,inlinewiththegeneralescapeclauseoftheStabilityandGrowthPact,toeffectivelyaddresstheCOVID-19pandemic,sustaintheeconomyandsupporttheensuingrecovery.Wheneconomicconditionsallow,pursuefiscalpoliciesaimedatachievingprudentmedium-termfiscal positions and ensuring debt sustainability, while enhancing investment.Not relevant anymoreNot applicableSDG 8, 16Improveaccessibilityofthehealthsystemandstrengthenitsresilience,includingbyrespondingtothehealthworkforce’sneedsandensuringuniversalcoverage for primary care.Some ProgressRelevant RRP measures being planned as of 2021SDG 32020 CSR 2Some ProgressSupport employment through developing skills.Some ProgressRelevant RRP measures being planned as of 2021SDG 4Address the risk of digital divide, including in the education sector.Substantial ProgressRelevant RRP measures being planned as of 2021SDG 4Increase the provision of social and affordable housing.Some ProgressRelevant RRP measures being planned as of 2021SDG 1, 2, 8, 102020 CSR 3Some ProgressContinue to provide support to companies, in particular SMEs, especially through measures ensuring their liquidity.Substantial ProgressSDG 8, 9 Front-load mature public investment projects Full ImplementationRelevant RRP measures being planned as of 2021, 2022SDG 8, 16and promote private investment to foster the economic recovery.Some ProgressRelevant RRP measures being planned as of 2021, 2022SDG 8, 9Focusinvestmentonthegreenanddigitaltransition,inparticularoncleanandefficient production and use of energy, Substantial ProgressRelevant RRP measures being planned as of 2020, 2021, 2022SDG 7, 9, 13sustainable public transport, Some ProgressRelevant RRP measures being planned as of 2022SDG 11water supply and treatment, Some ProgressRelevant RRP measures being planned as of 2021, 2022SDG 6, 12, 15research and innovation Some ProgressRelevant RRP measures being planned as of 2025SDG 9and digital infrastructure.Some ProgressRelevant RRP measures being planned as of 2021, 2022, 2023SDG 92020 CSR 4Limited ProgressBroaden the tax base.Limited ProgressSDG 8, 10, 12Stepupactiontoaddressfeaturesofthetaxsystemthatfacilitateaggressivetax planning, including on outbound payments.Limited ProgressRelevant RRP measures being planned as of 2020SDG 8, 16Ensureeffectivesupervisionandenforcementoftheanti-money-launderingframework as regards professionals providing trust and company services.Some ProgressRelevant RRP measures being planned as of 2021SDG 8, 16 
 
 
 
  
 
Table (continued) 

Note:            
* See footnote (55). 
** RRP measures included in this table contribute to the implementation of CSRs. Nevertheless, additional measures outside the 
RRP are necessary to fully implement CSRs and address their underlying challenges. Measures indicated as 'being implemented' 
are only those included in the RRF payment requests submitted and positively assessed by the European Commission.  
Source: European Commission 

26 

2021 CSR 1Substantial ProgressIn2022,pursueasupportivefiscalstance,includingtheimpulseprovidedbytheRecovery and Resilience Facility, and preserve nationally financed investment. Full ImplementationNot applicableSDG 8, 16Wheneconomicconditionsallow,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositionsandensuringfiscalsustainabilityinthemedium term.Full ImplementationNot applicableSDG 8, 16Atthesametime,enhanceinvestmenttoboostgrowthpotential.Payparticularattentiontothecompositionofpublicfinances,onboththerevenueandexpendituresidesofthenationalbudget,andtothequalityofbudgetarymeasuresinordertoensureasustainableandinclusiverecovery.Prioritisesustainableandgrowth-enhancinginvestment,inparticularinvestmentsupporting the green and digital transition.Substantial ProgressNot applicableSDG 8, 16Giveprioritytofiscalstructuralreformsthatwillhelpprovidefinancingforpublicpolicyprioritiesandcontributetothelong-termsustainabilityofpublicfinances,including,whererelevant,bystrengtheningthecoverage,adequacyandsustainability of health and social protection systems for allSome ProgressNot applicableSDG 8, 162022 CSR 1Substantial ProgressIn2023,ensurethatthegrowthofnationallyfinancedprimarycurrentexpenditureisinlinewithanoverallneutralpolicystance,takingintoaccountcontinuedtemporaryandtargetedsupporttohouseholdsandfirmsmostvulnerabletoenergypricehikesandtopeoplefleeingUkraine.Standreadytoadjust current spending to the evolving situation.Full ImplementationNot applicableSDG 8, 16Expandpublicinvestmentforthegreenanddigitaltransitions,andforenergysecuritytakingintoaccounttheREPowerEUinitiative,includingbymakinguseof the Recovery and Resilience Facility and other Union funds.Substantial ProgressNot applicableSDG 8, 16Fortheperiodbeyond2023,pursueafiscalpolicyaimedatachievingprudentmedium-term fiscal positions.Full ImplementationNot applicableSDG 8, 16Addresstheexpectedincreaseinage-relatedpensionexpenditurebyensuringthe fiscal sustainability of the state pension system.Limited ProgressRelevant RRP measures being planned as of 2020SDG 82022 CSR 2Proceedwiththeimplementationofitsrecoveryandresilienceplan,inlinewiththemilestonesandtargetsincludedintheCouncilImplementingDecisionof8September 2021.Submitthe2021-2027cohesionpolicyprogrammingdocumentswithaviewtofinalisingtheirnegotiationswiththeCommissionandsubsequentlystartingtheirimplementation.2022 CSR 3Limited ProgressFocuseffortsonboostingthecirculareconomy.Inparticular,developbothinfrastructureandpoliciestopreventwasteandincreasereusedandrecycledcontent,anddevelopamoreeffectivesystemfortheseparatecollectionofrecyclable waste, including biodegradable waste.Limited ProgressNot applicableSDG 6, 12, 15Promote safer and cleaner waste water circuits.Limited ProgressRelevant RRP measures being planned as of 2022SDG 6, 12, 152022 CSR 4Some ProgressReduce overall reliance on fossil fuels.Some ProgressRelevant RRP measures being planned as of 2020 and 2021SDG 7, 9, 13Acceleratethedeploymentofrenewableenergy,inparticularoffshorewind,includingbyintroducingreformstoimprovetheefficiencyoftheplanningandpermit system, particularly by reducing the duration of procedures.Substantial ProgressNot applicableSDG 7, 8, 9, 13Upgradeenergyinfrastructure,includingforstorageandenhancethestabilityofthe grid.Some ProgressNot applicableSDG 7, 9, 13Ensure the fast implementation of deep building retrofits.Some ProgressRelevant RRP measure being planned as of 2021SDG 7Acceleratetheelectrificationoftransport,includingbyinstallingchargingfacilities.Some ProgressRelevant RRP measure being planned as of 2021SDG 11RRP implementation is monitored by assessing RRP payment requests and analysing reports published twice a year on the achievement of the milestones and targets. These are to be reflected in the country reports. Progress on the cohesion policy programming documents is monitored under the EU cohesion policy. 
 
  
 
ANNEX 3: RECOVERY AND RESILIENCE PLAN - OVERVIEW 

Graph A3.1: Share of RRF funds contribution to each policy pillar 

Note: Each measure contributes towards two policy areas of the six pillars, therefore the total contribution to all pillars displayed 
on this chart amounts to 200% of the estimated cost of the RRP. The bottom part represents the amount of the primary pillar, the 
top part the amount of the secondary pillar. 
Source: RRF Scoreboard  

The  Recovery  and  Resilience  Facility  (RRF)  is 
the centrepiece of the EU’s efforts to help it 
recover  from  the  COVID-19  pandemic,  speed 
up  the  twin  transition  and  strengthen 
resilience  against  future  shocks.  The  RRF 
also  contributes  to  implementation  of  the 
SDGs  and  helps  to  address  the  Country 
Specific  Recommendations 
(see  Annex 4). 
Ireland submitted its initial recovery and resilience 
plan  (RRP)  on  25 May 2021.  The  Commission’s 
positive  assessment  on  16 July 2021  and 
Council’s  approval  on  8 September 2021  paved 
the way for disbursing 989 million in grants under 
the RRF over the 2021-2026 period.   

into  force  of  the  RRF 
Since  the  entry 
Regulation  and  the  assessment  of  the 
national  recovery  and  resilience  plans, 
geopolitical  and  economic  developments 
have caused major disruptions across the EU. 
In  order  to  effectively  address  these  disruptions, 
the  (adjusted)  RRF  Regulation  allows  Member 
States to amend their recovery and resilience plan 
for  a  variety  of  reasons.  In  line  with  article  11(2) 
of the RRF, the maximum financial contribution for 
Ireland was moreover updated on 30 June 2022 to 
an amount of EUR 915 billion in grants. 

In  this  context,  Ireland  submitted  an  amended 
RRP  to  the Commission  on  22  May  2022  due 
to objective circumstances that make it no longer 

possible to achieve certain milestones and targets 
in  the  RRP  in  line  with  Article  21  of  the  RRF 
Regulation.  The  update  to  Ireland’s  plan  is  of  a 
technical  nature.  It  concerns  two  measures  in 
Ireland’s plan, one related to a guarantee scheme 
that  aims  to  encourage  private  investment  in 
energy  efficiency  (postponement  of  completion 
dates  due  to  unforeseen  difficulties 
in  the 
implementation of the measure), and the other to 
increasing  the  supply  of  social  and  affordable 
housing (postponement of completion dates due to 
construction delays, as well as the identification of 
a  manifestly  better  alternative  approach  for  one 
housing scheme). 

Ireland’s progress in implementing its plan is 
published  in  the  Recovery  and  Resilience 
Scoreboard (30).  The  Scoreboard  also  gives  an 
overview  of  the  progress  made  in  implementing 
the RRF as a whole, in a transparent manner. The 
graphs below show the current state of play of the 
milestones  and  targets  to  be  reached  by  Ireland 
and  subsequently  assessed  as  satisfactorily 
fulfilled by the Commission. 

(30)  https://ec.europa.eu/economy_finance/recovery-and-

resilience-scoreboard/country_overview.html 

27 

0%10%20%30%40%50%60%Green transitionDigitaltransformationSmart,sustainable andinclusive growthSocial andterritorialcohesionHealth, andeconomic, socialand institutionalresiliencePolicies for thenext generation 
 
                                                 
   
 
Table A3.1: Key elements of the Irish RRP('s) 

Source: RRF Scoreboard   

28 

Current RRPScope Initial planCID adoption date 8 September 2021Total allocation EUR 989 million in grants (0.23% of 2021 GDP)Investments and reforms 16 investments and 9 reforms Total number of milestones and targets109 
 
   
 
ANNEX 4: OTHER EU INSTRUMENTS FOR RECOVERY AND GROWTH 

The  EU  budget  of  over  EUR  1.2  trillion  for 
2021-2027  is  geared  towards  implementing 
the  EU’s  main  priorities.  Cohesion  policy 
investment amounts to EUR 392 billion across the 
EU and represents almost a third of the overall EU 
budget, including around EUR 48 billion invested in 
line with REPowerEU objectives. 

Graph A4.1: Cohesion policy funds 2021-2027 in 
Ireland: budget by fund 

(1) million EUR in current prices, % of total; (total amount 
including EU and national co-financing) 
Source: European Commission, Cohesion Open Data 

universities, 

technological 

In  2021-2027,  in  Ireland,  cohesion  policy 
funds (31)  will  invest  EUR  496  million  in  the 
green  transition  and  EUR  10  million  in  the 
digital  transformation  as  part  of  the 
country’s  total  allocation  of  EUR  2.1  billion. 
In  particular,  the  European  Regional  Development 
Fund  (ERDF) will  strengthen  regional  innovation 
ecosystems  and  foster  knowledge  creation  and 
transfers between higher education institutions, in 
particular 
and 
companies.  This  will  help  over  10 000  firms 
become  more  competitive.  More  than  5 000 
homes  will  benefit 
improved  energy 
efficiency,  leading  to  an  overall  reduction  of 
primary  energy  consumption  of  about  113  500 
Mwh/year.  Particular  attention  should  be  paid  to 
maintaining  strong  regional  and  local  ownership 
during  programme 
implementation.  The  Just 
Transition  Fund  will  support  Ireland’s  efforts  to 
phase  out  peat  burning.  The  programme  will 
contribute 
to  further  economic 
diversification  in  the  Midlands,  to  the  restoration 
of  degraded  peatlands  and  the  repurposing  of 
former  industrial  heritage  assets.  The  European 
Social  Fund  Plus  (ESF+)  programme  in  Ireland 
earmarks  EUR  242  million  for  fostering  active 

in  particular 

from 

(31)  European Regional Development Fund (ERDF), European 
Social Fund+ (ESF+), Just Transition Fund (JTF) excluding 
Interreg programmes. The total amount includes national 
and EU contributions. Data source: Cohesion Open Data. 

29 

social 

integration, 

inclusion, 
and  material 
assistance.  Moreover,  Ireland  allocated  EUR  132 
million  to  education  and  skills,  including  EUR  39 
million to the development of digital skills. 

Of  the  investments  mentioned  above,  EUR 
264  million  will  be  invested  in  line  with 
REPowerEU objectives. This is on top of the EUR 
60  million  dedicated  to  REPowerEU  under  the 
2014-2020 budget.  

Graph A4.2: Synergies between cohesion policy 
funds and the RRF with its six pillars in Ireland 

(1) million EUR in current prices (CP funds: total amount, 
including EU and national co-financing)   
Source: European Commission  

In  2014-2020,  cohesion  policy  funds  made 
EUR 1.1 billion available to Ireland (32) with an 
national 
absorption 
financing, the total investment amounted to EUR 2 
billion - around 0.1% of GDP for 2014-2020.  

of  89% (33). 

Including 

flexibility 

Ireland  continues  to  benefit  from  cohesion 
policy 
support  economic 
to 
recovery,  step  up  convergence  and  provide 
vital support to regions following the COVID-
19  pandemic.  The  Recovery  Assistance  for 
Cohesion and the Territories of Europe instrument 
(REACT-EU) (34)  under  NextGenerationEU  provides 
EUR  142  million  on  top  of  the  2014-2020 
cohesion  policy  allocation  for  Ireland.  The  initial 
amount  of  REACT-EU  support  was  used  for  the 
reopening  of  schools  following  the  COVID-19 
pandemic and to provide laptops to disadvantaged 
students  in  further  and  higher  education.  The 
second  amount  was  used  to  address  migratory 

(32)  Cohesion policy funds include the ERDF, ESF and the Youth 
Employment Initiative (YEI). ETC programmes are excluded 
here. According to the ‘N+3 rule’, the funds committed for 
2014-2020 must be spent by 2023. REACT-EU is included in 
all figures. The total amount includes EU and national co-
financing. Data source: Cohesion Open Data. 

(33)  2014-2020 Cohesion policy EU payments by MS is updated 

daily on Cohesion Open Data.   

(34)  REACT-EU allocation on Cohesion Open Data. 

88141%1,08151%1698%ERDFESF+JTF162116982622320 49610487761226020040060080010001200Green transitionDigitaltransformationSmart, sustainableand inclusivegrowthSocial and territorialcohesionHealth, economic,social andinstitutionalresiliencePolicies for the nextgenerationEU CP 2014-2020 (million EUR)EU CP 2021-2027 (million EUR) 
 
  
                                                 
   
                                                 
 
 
challenges  resulting  from  the  Russian  military 
aggression in Ukraine.  In addition, EUR 1.2 billion 
was  provisionally  allocated  to  Ireland  through  the 
Brexit  Adjustment  Reserve  (BAR),  of  which  IE 
requested  in  March  2023  to  transfer  EUR  150 
million to the REPowerEU chapter of the RRP. With 
SAFE  (Supporting  Affordable  Energy),  the  2014-
2020 cohesion policy funds may also be mobilised 
by  Ireland  to  support  vulnerable  households,  jobs 
and  companies  particularly  affected  by  high 
energy prices. 

In both 2014-2020 and 2021-2027, cohesion 
policy  funds  have  contributed 
the 
Sustainable Development Goals (SDGs). These 
funds  support  11  of  the 17  SDGs,  notably  SDG  1 
‘no  poverty’  and  SDG  9  ‘industry,  innovation  and 
infrastructure’ (35). 

to 

Graph A4.3: Cohesion policy funds contribution to 
the SDGs in 2014-2020 and 2021-2027 in Ireland 

(1) 5 largest contributions to SDGs in million (EUR) current 
prices 
Source: European Commission  

Other  EU  funds  make  significant  resources 
available  for  Ireland.  The  common  agricultural 
policy  (CAP)  made  available  EUR  4.9  billion  in 
2014-2022  and  will  keep  supporting  Ireland  with 
EUR 7.5 billion in 2023-2027. The two CAP Funds 
(European  Agricultural  Guarantee  Fund  and 
Rural 
European 
Development),  contribute  to  the  European  Green 
Deal while ensuring long-term food security. They 
promote  social,  environmental  and  economic 
sustainability  and  innovation  in  agriculture  and 
rural  areas,  in  coordination  with  other  EU  Funds. 
The  European  Maritime  and  Fisheries  Fund  made 
EUR 148 million available to Ireland in 2014-2020 

Agricultural 

Fund 

for 

and 
the  European  Maritime,  Fisheries  and 
Aquaculture  Fund  allocates  EUR  142  million  in 
2021-2027. 

Ireland  also  benefits 
from  other  EU 
programmes,  notably  the  Connecting  Europe 
Facility,  which  under  CEF  2  (2021-2027)  has  so 
far  allocated  EU  funding  of  EUR  12.6  million  to 
seven  specific  projects  on  strategic  transport 
networks.  Similarly,  Horizon  Europe  has  so  far 
allocated more than EUR 253 million for Irish R&I 
on top of the EUR 1.2 billion earmarked under the 
previous  programme  (Horizon  2020).  The  Public 
Sector  Loan  Facility  set  up  under  the  Just 
Transition  Mechanism  makes  EUR  6.41  million  of 
grant  support  from  the  Commission  available  for 
projects  located  in  Ireland  for  2021-2027,  which 
will  be  combined  with  loans  from  the  EIB  to 
support  investments  by  public  sector  entities  in 
just transition regions. 

for 

temporary 

unemployment 

Ireland  received  support  under  the  European 
to 
instrument 
mitigate 
an 
emergency  to  finance  short-time  work  schemes 
to  mitigate  the  impact  of  COVID-19.  The  Council 
granted  financial  assistance  to  Ireland  of  EUR  2 
473 million in loans, which supported around 23% 
of workers and 37% of firms in 2020. 

support 
in 

risks 

include 

support 

Ireland 

significant 

Instrument 
designing 

since 
strengthening 

(TSI) 
The  Technical  Support 
and 
in 
supports 
implementing  growth-enhancing 
reforms, 
including those set out in its RRP.  Ireland has 
2018. 
received 
Examples (36) 
policy 
development  and  foresight  in  the  public  service, 
designing  the  deep  energy  renovation  of  historic 
buildings  and 
the  most  suitable 
reforms and investments linked to the REPowerEU 
plan.  The  TSI  is  also  helping  Ireland  implement 
specific  reforms  and  investments  included  in  its 
reforming  marine  management, 
RRP, 
in 
strengthening  environmental  considerations 
public 
investment  management  and  health 
workforce planning. 

identifying 

e.g. 

(35)  Other EU funds contribute to the implementation of the 
SDGs. In 2014-2022, this includes both the European 
Agricultural Fund for Rural Development (EARDF) and the 
European Maritime and Fisheries Fund (EMFF). 

(36)  Country factsheets on reform support are available here. 

30 

298651205013295604782792412260100200300400500600SDG 1 No povertySDG 9 Industry,innovation,infrastructureSDG 7 Affordableand clean energySDG 8 Decent workand economicgrowthSDG 4 QualityeducationEU CP 2014-2020 (millions EUR)EU CP 2021-2027 (millions EUR) 
   
                                                 
                                                 
ANNEX 5: RESILIENCE 

illustrates 

This  Annex 
Ireland’s  relative 
resilience capacities and vulnerabilities using 
the  Commission’s 
resilience  dashboards 
(RDB) (37).  Comprising  a  set  of  124  quantitative 
indicators,  the  RDB  provide  broad  indications  of 
Member  States’  ability  to  make  progress  across 
four interrelated dimensions: social and economic, 
green, digital, and geopolitical. The indicators show 
vulnerabilities (38)  and  capacities (39)  that  can 
become  increasingly  relevant,  both  to  navigate 
ongoing  transitions  and  to  cope  with  potential 
future shocks. To this end, the RDB help to identify 
areas  that  need  further  efforts  to  build  stronger 
and  more  resilient  economies  and  societies.  They 
in  Table  A5.1  as  synthetic 
are  summarised 
resilience 
illustrate  the  overall 
relative  situation  for  each  of  the  four  dimensions 
and their underlying areas for Ireland and the EU-
27 (40). 

indices,  which 

shows 

dimensions. 

Compared  to  the  EU  average,  Ireland  shows 
an  overall  similar  level  of  capacities  across 
all  RDB  indicators.  Ireland  has  overall  medium-
low  resilience  capacities  in  the  green  dimension, 
but  medium-high  to  high  capacities  in  the  other 
three 
stronger 
Ireland 
capacities  than  the  EU  average  in  the  areas 
‘Inequalities  and  social  impact  of  the  transitions’ 
financial  stability  and 
and 
sustainability’  of 
the  social  and  economic 
dimension as well as in the areas ‘sustainable use 
of  resources’,  ‘digital  for  personal  space’,  ‘digital 
for  industry’  and  ‘financial  globalisation’.  There  is 
clearly room for improving capacities compared to 
the  EU  in  the  areas  'ecosystems,  biodiversity, 
sustainable  agriculture’  and  ‘raw  material  and 
energy supply’. 

‘economic  and 

Table A5.1: Resilience indices summarising the 
situation across RDB dimensions and areas 

in 

shows 

Ireland 

EU  average. 

According  to  the  set  of  resilience  indicators 
under  the  RDB,  Ireland  generally  displays  a 
similar  level  of  vulnerabilities  compared  to 
high 
the 
vulnerabilities in the geopolitical dimension of the 
resilience  dashboards,  medium-low  vulnerabilities 
in  the  green  and  digital  dimensions  and  medium 
the  social  and  economic 
vulnerabilities 
dimension.  Compared  to  the  EU  level,  it  shows 
significantly  higher  vulnerabilities,  for  instance 
related 
‘climate  change  mitigation  and 
adaptation’,  ‘cybersecurity’  and  ‘raw  material  and 
energy supply’. Ireland also has high vulnerabilities 
in  the  area  ‘value  chains  and  trade’.  It  shows 
clearly  lower  vulnerabilities  compared  to  the  EU 
average  in  the  areas  ‘inequalities  and  social 
impact 
‘ecosystems, 
biodiversity,  sustainable  agriculture’  and  ‘digital 
for personal space’.  

transitions’, 

the 

of 

to 

(1) Data are for 2021, and EU-27 refers to the value for the 
EU as a whole.  Data underlying EU-27 vulnerabilities in the 
area ‘value chains and trade’ are not available as they 
comprise partner concentration measures that are not 
comparable with Member States’ level values. 
Source: JRC Resilience Dashboards - European Commission 

(37)  For details see https://ec.europa.eu/info/strategy/strategic-
planning/strategic-foresight/2020-strategic-foresight-
report/resilience-dashboards_en; see also 2020 Strategic 
Foresight Report (COM(2020) 493). 

(38)  Vulnerabilities describe features that can exacerbate the 

negative impact of crises and transitions, or obstacles that 
may hinder the achievement of long-term strategic goals. 

(39)  Capacities refer to enablers or abilities to cope with crises 
and structural changes and to manage the transitions.  

(40)  This Annex is linked to Annex 1 on SDGs, Annex 6 on the 
green deal, Annex 8 on the fair transition to climate 
neutrality, Annex 9 on resource productivity, efficiency and 
circularity, Annex 10 on the digital transition and Annex 14 
on the European pillar of social rights. 

31 

IEEU-27IEEU-27Vulnerabilities IndexHighMedium-highMediumMedium-lowLowNot availableCapacities IndexHighMedium-highMediumMedium-lowLowNot availableDimension/AreaVulnerabilitiesCapacitiesSocial and economicHealth, education and workInequalities and social impact of the transitionsGreenEconomic & financial stability and sustainabilitySustainable use of resourcesClimate change mitigation & adaptationDigitalEcosystems, biodiversity, sustainable agricultureDigital for industryDigital for personal spaceCybersecurityDigital for public spaceRaw material and energy supplyGeopoliticalValue chains and tradeFinancial globalisationSecurity and demography 
 
                                                 
 
  
 
 
 
ENVIRONMENTAL SUSTAINABILITY 
ANNEX 6: EUROPEAN GREEN DEAL 

Ireland’s  green  transition  requires  continued 
action  on  several  aspects  including  cutting 
greenhouse gas emissions through promoting 
energy  efficiency  and  sustainable  transport. 
Implementation  of  the  European  Green  Deal  is 
underway 
Ireland;  this  Annex  provides  a 
snapshot of the key areas involved (41).  

in 

Ireland  has  not  yet  defined  all  the  climate 
policy  measures  it  needs  to  reach  its  2030 
target  for  the  effort  sharing 
climate 
sectors. (42). Data for 2021 are expected to show 
that  in  these  sectors  the  country  generated  more 
greenhouse  gas  emissions 
its  annual 
emission allocations (43). Current policies in Ireland 
are  projected  to  reduce  these  emissions  by  -11% 
relative  to  2005  levels  in  2030,  not  a  sufficient 
reduction  to  reach  the  effort  sharing  target  even 
before  the  target  was  raised  to  meet  the  EU’s 
55%  objective,  let  alone  Ireland’s  new  target  to 
reduce  emissions  by  -42%. (44).  In  late  2022, 
Ireland  published  its  climate  action  plan  2023, 
prepared under the Climate Action and Low Carbon 

than 

(41)  The overview in this Annex is complemented by information 
provided in Annex 7 on energy security and affordability, 
Annex 8 on the fair transition to climate neutrality and 
environmental sustainability, Annex 9 on resource 
productivity, efficiency and circularity, Annex 11 on 
innovation, and Annex 19 on taxation. 

(42)  Member States’ greenhouse gas emission targets for 2030 
(‘effort sharing targets’) were increased by Regulation (EU) 
2023/857 (the Effort Sharing Regulation) amending 
Regulation (EU) 2018/842, aligning the action in the 
concerned sectors with the objective to reach EU-level, 
economy-wide greenhouse gas emission reductions of at 
least 55% relative to 1990 levels. The Regulation sets 
national targets for sectors outside the current EU Emissions 
Trading System, notably: buildings (heating and cooling), road 
transport, agriculture, waste, and small industry. Emissions 
covered by the EU ETS and the Effort Sharing Regulation are 
complemented by net removals in the land use sector, 
regulated by Regulation (EU) 2018/841 (the Land Use, Land 
Use Change and Forestry (LULUCF) Regulation) amended by 
Regulation (EU) 2023/839. 

(43)  Ireland's annual emission allocations for 2021 were some 

about 42.6 Mt CO2eq, and its approximated 2021 emissions 
were at 45.2 Mt (see European Commission, Accelerating the 
transition to climate neutrality for Europe’s security and 
prosperity: EU Climate Action Progress Report 2022, 
SWD(2022)343). Greenhouse gas emissions in the effort 
sharing sectors above the annual emission allocations do not 
imply non-compliance with the Effort Sharing Regulation, as 
the latter provides for specific flexibility instruments that 
may be used for compliance. 

(44)  See the information on the distance to the 2030 climate 

policy target in Table A6.1. Existing and additional measures 
as of 15 March 2022.  

the  national  objective  of  cutting 

Development (Amendment) Act 2021 (45). The plan 
–  a  milestone  in  Ireland’s  ambition  on  climate 
mitigation  –  contains  measures  to  cut  overall 
domestic  greenhouse  gas  emissions,  including 
from  the  land  use  sector,  by  -43%  in  2030, 
compared to 2018 levels. However, this falls short 
of 
these 
emissions by -51%. Ireland’s emissions are yet to 
be  put on a sustained downward trend;  therefore, 
rolling out the measures in the plan will be critical. 
In  its  recovery  and  resilience  plan  (RRP),  Ireland 
allocates  42 %  of  its  Recovery  and  Resilience 
Facility  grants  to  key  reforms  and  investments  to 
attain climate objectives (46).  

Graph A6.1: Thematic – greenhouse gas emissions 
from the effort sharing sectors in Mt CO2eq, 
2005-2021 

Source: European Environmental Agency. 

Ireland’s  land  use  sector  is  a  net  emitter  of 
greenhouse  gases,  at  levels  significantly 
above 
its  2030  target  for  that  sector. 
Ireland’s  land  use,  land  use  change  and  forestry 
(LULUCF)  sector  is  currently  a  significant  net 
source of emissions due to the small  presence of 
forests  and  the  large  emissions  from  grasslands 
on  organic  soils.  Action  is  being  taken  to  protect 
and 
improve 
management of soils, including with support from 
EU  funds.  Ireland’s  target  under  the  Land  Use, 
Land  Use  Change  and  Forestry 
(LULUCF) 
Regulation implies to reduce land sector emissions 

peatlands 

restore 

and 

to 

(45)  The WEM (‘with existing measures’) and WAM (‘with 

additional measures’) projections in Table A6.1. do not take 
the measures of the climate action plan 2023 into account. 

(46)  For example, increasing the carbon tax and reforming climate 
governance, promoting investments in energy efficiency, 
decarbonising the business sector, promoting sustainable 
railway transport, rehabilitating peatlands, improving 
wastewater treatment, and promoting green research and 
development.  

32 

0510152025303540455020052021Domestic transport (excl. aviation)Buildings (under ESR)AgricultureSmall industryWaste 
 
 
                                                 
   
                                                 
 
 
to  below  3 728  ktCO2e  (see  Table  A6.1) (47). 
Ireland’s  climate  action  plan  2023  deferred  the 
setting  of  a  target  for  the  sector,  pending  the 
completion of the planned land use review.  

Graph A6.2: Energy mix (top) and electricity mix 
(bottom), 2021 

The energy mix is based on gross inland consumption, and 
excludes heat and electricity. The share of renewables 
includes biofuels and non-renewable waste.  
Source: Eurostat 

Fossil  fuels  still  make  up  the  most  of 
Ireland's  energy  mix,  despite  the  rapid 
expansion in the use of renewable electricity. 
In 2021, oil accounted for 48% of Ireland's energy 
consumption  and  natural  gas  31%,  while  12% 
came  from  renewable  sources.  38%  of  Ireland's 
electricity  already  came  from  renewables,  but 
progress  in  the  decarbonisation  of  heating  has 
been very limited. Ireland set itself very ambitious 
targets to  transform its  energy  system,  with  peat 

(47)  This value is indicative and will be updated in 2025 (as 

mandated by Regulation (EU) 2023/839). 

33 

and  coal  fired  power  production  being  rapidly 
phased  out  and  heating  and  transport  being 
electrified  combined  with  an  extremely  fast 
deployment of wind and solar PV, to reach its 80% 
renewable  electricity 
target  by  2030.  This 
increased  reliance  on  electricity  and  on  variable 
energy  sources,  combined  with  structural  issues 
such  as  an  ageing  generation  fleet,  inadequate 
transmission 
limited 
interconnections,  poses  challenges  in  terms  of 
security of supply. 

infrastructure 

and 

The  climate  action  plan  2023  sets  very 
ambitious  targets  for  wind  and  solar  power 
and for heat pumps. Ireland’s target of 34.1% of 
share  of  energy  from  renewable  sources  in  gross 
final energy consumption by 2030 included in the 
NECP  was  considered  sufficiently  ambitious. 
Ireland will need to increase its renewable energy 
target  in  the  updated  NECP  to  reflect  the  more 
ambitious EU climate and energy targets in the Fit 
for  55  Package  and  in  the  REPowerEU  Plan.  If 
achieved,  the  80%  renewable  electricity  target, 
based  on  9GW  of  onshore  wind,  8GW  of  solar  PV 
and at least 5GW of offshore wind, and a target of 
680 000  heat  pumps,  will  result  in  an  energy 
system  largely  based  on  renewable  energy  by 
2030. The recovery and resilience plan focuses on 
developing renewable electricity and on developing 
renewable  energy  for  thermal  needs  of  buildings, 
services, and industry. Ireland has begun to put in 
place  required  regulatory  tools,  including  new 
support  schemes  for  renewable  electricity  and 
heat  and  a  regulatory  framework  for  offshore 
energy.  To  stay  on  course  with  the  trajectory, 
accelerating  the  permitting  procedures  and  grid 
connection  and  rapidly  building  up  skills  and 
supply  chains  will  be  needed.  Large  investments 
will  be 
the  power 
infrastructure  and  provide  storage  and  flexibility 
technologies  to  support  the  very  high  levels  of 
variable generation. 

to  upgrade 

required 

its  2020  energy 
Ireland  fell  short  of 
efficiency  target  and  has  not  yet  reversed 
the  trend  of 
increasing  overall  energy 
consumption.  Ireland’s  NECP  targets  for  primary 
and final energy consumption (PEC and FEC) were 
considered  of 
the  2020 
low  ambition 
Commission  assessment.  Based  on  the  energy 
consumption  trajectory  for  2018-2021,  Ireland  is 
expected  to  be  on  track  to  meet  its  2030  target 
for  PEC  and  for  FEC,  as  these  were  notified in  its 

in 

9%31%48%12%Solid fossil fuels,peat and oil shaleGasOilRenewables9%48%5%38%Solid fossil fuels,peat and oil shaleGasOilRenewables 
      
                                                 
to 

NECP (48).  One  major  factor 
the  energy 
efficiency  gap  in  Ireland  is  the  lack  of  awareness 
of the potential for energy savings. Another factor 
is a lack of access to  financing in order to afford 
the upfront cost of energy efficiency investments. 
The climate action plan 2023 seeks to address the 
poor  efficiency  of  the  building  stock  with  an 
ambitious  residential  retrofit  plan  (aiming  to 
upgrade 500 000 homes, representing 30% of the 
housing  stock,  by  2030  through  grants  of  up  to 
50% of the cost of a deep retrofit) and ambitious 
targets  for  new  buildings 
(Near  Zero-Energy 
Building  standard  by  2025  and  Zero-Emission 
Building 
Ireland  also 
announced  a  ban  of  oil  boilers  for  new  buildings 
starting  in  2023  and  gas  boilers  by  2025.  While 
Ireland  aims  to  decarbonise  its  industry  through 
electrification  and  energy  efficiency,  absolute 
energy  consumption  remains  bound  to  increase 
due  to  data  centres,  which  jeopardises  energy 
saving  targets  and  puts  additional  stress  on  the 
energy system. 

standard  by  2030). 

On sustainable mobility, much remains to be 
done  in  Ireland.  The  number  of  zero-emission 
passenger cars in the Irish fleet is growing rapidly, 
but the density of public charging points struggles 
to  keep  pace.  Just  over  100  kms  of  railroads  are 
electrified, making Ireland the EU country with the 
lowest  share  of  electrified 
railways.  Road 
congestion  puts  a  high  and  increasing  burden  on 
commuters’  time.  Air  quality  is  generally  good, 
with  exceptions.  However,  specific  actions  under 
the  national  air  pollution  control  programme  are 
still  to  be  rolled  out,  and  reductions  of  nitrogen 
oxide,  ammonia  and  volatile  organic  compounds 
emissions are needed. 

Ireland would benefit from investing more in 
environmental protection and in measures to 
tackle  pollution,  to  protect  biodiversity,  and 
to promote the circular economy (49). Between 
2014  and  2020,  environmental  investment  needs 
were  estimated  at  EUR  3.3  billion  while  actual 
investment  stood  at  about  EUR  1.3  billion,  with  a 

(48)  After the conclusion of the negotiations for a recast EED, the 
ambition of both the EU and national targets as well as of 
the national measures for energy efficiency to meet these 
targets is expected to increase 

(49)  Environmental objectives include pollution prevention and 

gap  of  2  billion,  per  year  (see  Graph  A6.3) (50). 
Under  Natura  2000  and  national  designations, 
Ireland  legally  protects  13.9%  of  its  land  areas 
and  2.3%  of  its  marine  areas (51).  However,  there 
are significant knowledge and designation gaps in 
Ireland’s  marine  Natura  2000  network.  There  are 
still  concerns  about  special  areas  of  conservation 
for  raised  and  blanket  bogs.  Furthermore,  Ireland 
is  confronted  with  an  ageing  infrastructure  and 
decades  of  under-investment  in  the  water  sector. 
The  expanding  dairy  sector  has  a  significant 
impact on water and air quality, pushing Ireland to 
exceeding  the  ammonia  levels under  the  National 
Emission Reduction Commitments Directive. 

Graph A6.3: Thematic – environmental investment 
needs and current investment, p.a. 2014-2020 

Source: European Commission. 

It 

identified 

framework. 

Ireland  has  a  well-established  climate 
key 
adaptation 
exposures  to  extreme  weather  events  (floods, 
droughts,  and 
first  national 
storms).  The 
adaptation  framework,  from  2018,  was  followed 
by  adaptation  plans  in  12  key  sectors,  including 
natural  capital,  critical  infrastructure,  water  and 
flood  risk  management,  and  public  health.  The 
climate action plan 2023 identifies several priority 
actions  on  adaptation,  including  updating  the 
framework  and  the  sectoral  plans,  improving  the 
resilience  of 
infrastructure,  and 
incorporating  adaptation  into  investment  projects 

its  water 

(50)  When also accounting for needs estimated at EU level only 

(e.g., water protection, higher circularity, biodiversity 
strategy). 

control, water management and industries, circular economy 
and waste, biodiversity and ecosystems (European 
Commission, 2022, Environmental Implementation Review, 
country report Ireland). 

(51)  In 2021, Ireland had 13.9% terrestrial protected areas 

(Natura 2000 and nationally designated areas), against the 
EU average of 26.4% (European Environment Agency, 2023, 
Natura 2000 Barometer). 

34 

23625874121795817639668292060.0200.0400.0600.0800.01000.01200.0Pollutionprevention andcontrolWater (industries,excl. protection)Circular economy(incl. waste)Biodiversity andecosystemsR&I&D and otherEUR million (at current prices)Current investmentTotal need 
                                                 
       
                                                 
for key gas and power infrastructure. The Climate 
Action and Low Carbon Development (Amendment) 
Act  2021  requires  all  local  authorities  to  develop 
climate  action  plans  covering  both  mitigation  and 
adaptation.  

Ireland  provides  fossil  fuel  and  other 
environmentally harmful subsidies that could 
be  considered  for  reform,  while  ensuring 
food  and  energy  security  and  mitigating 
social  effects.  Despite  a  fall in direct  fossil  fuel 
subsidies  in  recent  years,  various  forms  of  direct 
support to end-users’ fossil fuel consumption have 
remained. Environmentally harmful subsidies have 
been  identified,  via  an  initial  assessment,  in  the 
agriculture,  forestry  and  fishing,  electricity,  gas, 
steam  and  air  conditioning,  transportation  and 
storage,  mining  and  quarrying,  real  estate  and 
services  sectors.  Examples  of  such  subsidies 
include  the  reduced  VAT  rate  for  fertilisers  and 
pesticides, the excise tax exemption and tax relief 
for  natural  gas  for  industrial  consumers,  the 
reimbursement  of  excise  duty  on  diesel  used  in 
freight,  other  categories  of  passenger  transport 
and  direct  subsidies  for  intensive  meat  and  dairy 
production systems (52). Ireland recently undertook 
a  review  of  fossil  fuel  subsidies  and  other 
potentially climate harmful supports, as part of its 
efforts  to  implement  green  budgeting  on  a  wide 
basis (53).  This  is  a  significant  first  step,  and  a 
mapping  of  all  environmentally  harmful  subsidies 
would help prioritise candidates for reform. 

Ireland  could  apply  tax 
instruments  to 
promote  resource  efficiency  and  further 
apply  the  polluter  pays  principle.  It  has  a 
broad-based  carbon  tax  and  has  recently  passed 
legislation  to  provide  for annual  rate  increases  to 
EUR  100  per  tonne  of  CO2  in  2030,  with  the 
current  rate  at  EUR  48.5.  In  2021,  energy-  and 
transport-related  environmental  taxes  accounted 
for  the  64.7%  and  35.1%  of  total  environmental 

(52)  Fossil fuel figures in EUR of 2021 from the 2022 State of 

the Energy Union report. Initial assessment of 
environmentally harmful subsidies done by the Commission 
in the 2022 toolbox for reforming environmentally harmful 
subsidies in Europe, using OECD definitions, and based on the 
following datasets: OECD Agriculture Policy Monitoring and 
Evaluations; OECD Policy Instruments for the Environment 
(PINE) Database; OECD Statistical Database for Fossil Fuels 
Support; IMF country-level energy subsidy estimates. Annex 4 
of the toolbox contains detailed examples of subsidies on 
the candidates for reform. 

(53)  Ireland has undertaken and published an analysis of fossil 
fuel subsidies and climate harmful spending (2023). 

taxes,  respectively.  However,  taxes  on  pollution 
and resources are limited (54) (see Annex 19). This 
leaves  significant  room  to  use  tax  instruments  to 
drive  behavioural  change.  As  part  of  its  climate 
action  plan,  Ireland  has  indicated  that  a  review 
and  possible  reform  of  key  environmental  taxes 
will take place. 

(54)  European Commission, 2021, Green taxation and other 

economic instruments – Internalising environmental costs to 
make the polluter pay, Ensuring that polluters pay.  

35 

 
                                                 
                                                 
Table A6.1: Indicators tracking progress on the European Green Deal from a macroeconomic perspective 

Sources: (1) Historical and projected emissions, as well as Member States’ climate policy targets and 2005 base year emissions 
under the Effort Sharing Decision (for 2020) are measured in global warming potential (GWP) values from the 4th Assessment 
Report (AR4) of the Intergovernmental Panel on Climate Change (IPCC). Member States’ climate policy targets and 2005 base 
year emissions under the Effort Sharing Regulation (for 2030) are in GWP values from the 5th Assessment Report (AR5). The 
table above shows the base year emissions 2005 under the Effort Sharing Decision, using AR4 GWP values. Emissions for 2017-
2021 are expressed in percentage change from 2005 base year emissions, with AR4 GWP values. 2021 data are preliminary. The 
table shows the 2030 target under Regulation (EU) 2023/857 that aligns it with the EU’s 55% objective, in percentage change 
from 2005 base year emissions (AR5 GWP). Distance to target is the gap between Member States’ 2030 target (with AR5 GWP 
values) and projected emissions with existing measures (WEM) and with additional measures (WAM) (with AR4 GWP values), in 
percentage change from the 2005 base year emissions. Due to the difference in global warming potential values, the distance to 
target is only illustrative. The measures included reflect the state of play as of 2022.  
(2) Net removals are expressed in negative figures, net emissions in positive figures. Reported data are from the 2023 
greenhouse gas inventory submission. 2030 value of net greenhouse gas removals as in Regulation (EU) 2023/839 
amending Regulation (EU) 2018/841 (LULUCF Regulation) – Annex IIa, kilotons of CO2 equivalent, based on 2020 submissions. 
(3) Renewable energy and energy efficiency targets and national contributions are in line with the methodology established under 
Regulation (EU) 2018/1999 (Governance Regulation).  
(4) Percentage of total revenue from taxes and social contributions (excluding imputed social contributions). Revenue from the EU 
Emissions Trading System is included in environmental tax revenue.  
(5) Expenditure on gross fixed capital formation for the production of environmental protection services (abatement and 
prevention of pollution) covering government, industry, and specialised providers.  
(6) European Commission, Study on energy subsidies and other government interventions in the European Union, 2022 edition.  
(7) The climate protection gap refers to the share of non-insured economic losses caused by climate-related disasters. This 
indicator is based on modelling of the current risk from floods, wildfires and windstorms as well as earthquakes, and an 
estimation of the current insurance penetration rate. The indicator does not provide information on the split between the 
private/public costs of climate-related disasters. A score of 0 means no protection gap, while a score of 4 corresponds to a very 
high gap (EIOPA, 2022).  
(8) Sulphur oxides (SO2 equivalent), ammonia, particulates < 10 µm, nitrogen oxides in total economy (divided by GDP).  
(9) Battery electric vehicles (BEV) and fuel cell electric vehicles (FCEV). 

36 

2030200520172018201920202021target/valueWEMWAMGreenhouse gas emission reductions in effort sharing sectors (1)Mt CO2eq; %; pp47.1-7%-4%-3%-5%--42%-31-12Net carbon removals from LULUCF (2)kt CO2eq7 6917 4396 2646 6577 0427 3383728n/an/a200520172018201920202021Share of energy from renewable sources in gross final consumption of energy (3)%300%11%11%12%16%13%34.1%Energy efficiency: primary energy consumption (3)Mtoe14.914.414.614.713.413.913.7Energy efficiency: final energy consumption (3)Mtoe12.611.812.412.411.211.411.2201620172018201920202021201920202021Environmental taxes (% of GDP)% of GDP1.91.81.61.41.21.22.42.22.2Environmental taxes (% of GNI*)% of GNI*3.02.92.62.42.32.1Environmental taxes (% of total taxation) (4)% of taxation 8.07.87.06.46.15.55.95.65.5Government expenditure on environmental protection% of total exp.1.61.61.61.61.41.41.71.61.6Investment in environmental protection (5) % of GDP0.20.10.20.2--0.40.40.4Investment in environmental protection (5) % of GDP0.30.20.30.3-----Fossil fuel subsidies (6)EUR2021bn2.32.02.01.71.6-53.050.0-Climate protection gap (7) score 1-40.71.21.5Net greenhouse gas emissions1990 = 100111.0117.0119.0114.0106.0111.076.069.072.0Greenhouse gas  emission intensity of the economykg/EUR'100.320.300.280.260.210.260.310.300.26Energy intensity of the economykgoe/EUR'100.060.060.050.050.04-0.110.11-Final energy consumption (FEC)2015=100103.8104.7109.4109.498.8100.7102.994.6-FEC in residential building sector2015=100103.5100.4106.9104.5112.6107.7101.3101.3106.8FEC in services building sector2015=100101.5101.5112.5113.9115.2114.3100.194.4100.7Smog-precursor emission intensity (to GDP) (8)tonne/EUR'100.80.70.70.60.5-0.90.9-Smog-precursor emission intensity (to GNI*) (8)tonne/EUR'101.21.21.11.01.0-Years of life lost due to air pollution by PM2.5per 100.000 inh.112.266.9153.3146.1119.7-581.6544.5-Years of life lost due to air pollution by NO2per 100.000 inh.44.231.645.541.611.6-309.6218.8-Nitrates in ground watermg NO3/litre12.712.812.814.413.9-21.020.8-Land protected areas% of total13.413.8-13.813.813.926.226.426.4Marine protected areas% of total2.3--2.3-2.310.7-12.1Organic farming% of total utilised agricultural area1.71.71.71.61.72.08.59.1-201720182019202020212021202020212022Share of zero-emission vehicles (9)% in new registrations0.51.03.14.58.314.75.48.910.7Number of AC/DC recharging points (AFIR categorisation)---114410382166188626330028432518Share of electrified railways%5.75.35.3n/an/a2.856.6n/a56.6Hours of congestion per commuting driver per year35.035.336.036.1n/an/a28.7n/an/aMobility'Fit for 55'DistanceProgress to policy targetsNational contribution to 2030 EU targetIreland EUFiscal and financialindicatorsEnergyPollutionBiodiversityClimate 
 
     
 
ANNEX 7: ENERGY SECURITY AND AFFORDABILITY 

invaded  Ukraine, 

Before  Russia 
Ireland 
already  had  no  direct  exposure  to  Russian 
gas  and  oil.  However,  it  is  highly  dependent 
on  imported  fossil  fuels  in  general.  This 
makes  its  economy  particularly  sensitive  to 
global  price  developments,  requiring  it  to 
step up efforts on the energy transition. This 
Annex (55) sets out actions carried out by Ireland to 
including 
the  REPowerEU  objectives, 
achieve 
through  the  implementation  of  its  recovery  and 
resilience plan, in order to improve energy security 
and  affordability  while  accelerating  the  clean 
energy  transition,  ,  and  contributing  to  enhancing 
the  EU’s  competitiveness  in  the  clean  energy 
sector (56).  

in  2020. 

Ireland’s  gas 

Ireland has no exposure to Russian crude oil 
and gas imports. However, it depends heavily 
on  these  energy  sources  for  its  energy 
supply.  Natural  gas  production  has  decreased  by 
43% since 2018 due to the closure of the Kinsale 
Area  gas  fields,  reaching  2  billion  cubic  metres 
(bcm) 
imports  have 
increased by almost 70% since 2018, reaching 3.4 
bcm in 2020 to cover decreasing production. From 
2010  to  2015,  they  fluctuated  between  4  and  5 
bcm.  Imports  account  for  60%  of  gas  consumed 
(2020)  and  all  come  from  the  UK.  In  April  2022, 
Ireland  published  its  national  energy  security 
framework. It aims to ensure security of supply in 
the  near  term,  reducing  Ireland’s  dependency  on 
compensating 
imported 
households  and  businesses  exposed  to  higher 
energy costs.  

fossil 

fuels 

and 

Ireland  has  reviewed  its  energy  security 
policy.  The  main  issues  for  the  security  of  its 
energy  supply  are  related  to  the  structural  stress 
its power system is under. On 19 September 2022, 
to 
the  government 
support  the  review  of  Ireland’s  medium-term 
energy  security  to  2030.  Measures  to  mitigate 
potential  supply  risks  include  additional  import 

launched  a  consultation 

(55)  It is complemented by Annex 6 as the European Green Deal 
focuses on the clean energy transition, by Annex 8 on the 
actions taken to mitigate energy poverty, including the most 
vulnerable ones, by Annex 9 as the transition to a circular 
economy will unlock significant energy and resource savings, 
further strengthening energy security and affordability, and 
by Annex 12 on industry and single market complementing 
ongoing efforts under the European Green Deal and 
REPowerEU. 

(56)  in line with the Green Deal Industrial Plan COM(2023) 62 
final, and the proposed Net-Zero Industry Act COM(2023) 
161 final 

37 

electricity 

interconnection, 

capacity,  reducing  energy  use,  energy  storage, 
fuel 
additional 
diversification  and  renewable  gases  (such  as 
biomethane  and  hydrogen).  This  review  will 
consider,  among  other  things,  the  possibility  of 
opening  liquefied  natural  gas  terminals.  There 
were significant tensions over electricity supply in 
2022.  Ireland  issued  an  early  warning  in  August 
2022 and expects these difficult circumstances to 
Irish 
persist  for  the  next  few  winters.  The 
authorities  have  entered  into  dialogue  with  the 
Commission to seek ways of addressing this issue. 

Graph A7.1: Share of gas consumption per sector, 
2021 

Source: Eurostat 

the 

Lack  of  awareness  of  the  potential  for 
energy  savings  and 
lack  of  access  to 
financing  are  a  major  factor  for  the  energy 
efficiency gap. Many people are not aware of the 
cost-effective  measures  and 
financial 
incentives and programmes available to help them 
make energy-efficient upgrades. In May 2020, the 
Irish  government  launched  a  new  nationwide 
public information campaign – 'Reduce Your Use' – 
to  promote  energy  efficiency  and  highlight  the 
range  of  support  available  to  households  and 
businesses.  Another  reason  is  a  lack  of  access  to 
financing for the upfront cost of energy efficiency 
investments.  Ireland’s  National  Retrofit  Plan  was 
launched  in  February  2022  to  upgrade  500 000 
homes, representing 30% of the housing stock, by 
2030  with  grants  of  up  to  50%  of  the  cost  of  a 
deep  retrofit,  while  the  country’s  one-stop  shops 
assist  with 
Ireland 
announced  a  ban  on  oil  boilers  for  new  buildings, 
starting  this  year,  and  gas  boilers  by  2025.  Over 
the period August 2022 – March 2023, 0% of gas 
consumption  has been  saved  in  Ireland  compared 
to the previous 5-years average. Ireland is carrying 
out  a  number  of  checks  on  products  covered  by 

project  management. 

55.6%22.8%0.3%7.7%13.6%0.0%EnergyIndustryTransportServices and public sectorHouseholdsAgriculture, forestry andfishery 
 
                                                 
   
 
 
ecodesing  and  energy  labelling,  that  may  be  too 
low.  This  generates  with  respect  to  the  level 
playing  field  among  economic  operators  and 
uncertainty  as  to  the  compliance  levels  of  the 
concerned products, and therefore possible missed 
energy and CO2 savings (57). 

is 

further  upgrading 

Ireland 
its  grid 
infrastructure.  The  forthcoming  electricity 
interconnection  between  France  and  Ireland 
is a major part of the upgrade. This will make 
it  possible  to  accommodate  higher  shares  of 
renewable  generation,  reduce  curtailment  and 
make Ireland’s energy supply more secure. This is 
a Project of Common Interest that has reached the 
construction  stage  and is expected to  be  ready  in 
2027.  With  high  offshore  wind  potential,  Ireland 
could  play  a  major  role  in  the  generation  of 
renewable  hydrogen,  provided  the  appropriate 
infrastructure  were 
the 
hydrogen  to  demand  centres  in  Europe,  given  the 
quite low demand there is for it in Ireland. 

to  deliver 

in  place 

electricity  after  natural  gas.  Ireland  increased  its 
2030 renewable electricity target to 80% in 2022. 
To  reach  this  target,  Ireland  will  have  to  rely 
heavily  on 
the  accelerated  development  of 
onshore  and  especially  offshore  wind.  The  2023 
Climate  Action  Plan  also  considerably  raised  the 
2030  objective  for  solar  PV.  A  low  wind  year  for 
renewable generation in 2021 meant Ireland used 
more  coal  and  oil  for  electricity  generation, 
bringing  down  its  share  of  renewables  in  gross 
final  energy  consumption  to  12.55%,  from  about 
13.5% in 2020 (16.16% with statistical transfers). 
In March 2022, the government announced a new 
planning  regime  to  enable  the  development  of 
more offshore wind farms, vital for it to reach its 
80%  renewable  electricity  target.  On  7  October 
introduced  planning 
2022, 
exemptions  for  the  installation  of  solar  panels  on 
rooftops  to  bring  Ireland  into  line  with  the  EU’s 
solar rooftops initiative.  

the  government 

Graph A7.2: Ireland´s retail energy prices for 
industry (top) and households (bottom) 

Ireland  has  introduced  a  broad  range  of 
support  instruments  to  mitigate  the  impact 
of  soaring  energy  prices  on  households  and 
industry.  Wholesale  gas  prices,  and  to  a  lesser 
extent  electricity,  increased  more  moderately  in 
Ireland than in the rest of the EU  in 2022 due to 
Ireland’s  limited  exposure  to  Russian  gas  imports 
and  because  prices  had  already 
increased 
significantly  in  2021.  In  addition  to  the measures 
taken at the end of 2021 to mitigate the impact of 
a  sharp  rise  in  retail  electricity  prices,  which  hit 
households 
and  medium-sized 
enterprises  hardest,  the  government  put  various 
measures 
include 
in  place 
electricity  cost  credits,  VAT 
reductions,  fuel 
allowances,  a  temporary  business  energy  support 
scheme  and  protection  measures  for  vulnerable 
customers.  In  addition,  a  national  energy  security 
framework adopted in the wake of the invasion of 
Ukraine includes more structural measures such as 
grants  for  vulnerable  households  to  install  solar 
panels. 

in  2022.  These 

small 

and 

Ireland  has  high  ambitions  to  make  a  fast 
transition  to  a  power  system  based  on 
renewables.  It  is  putting  regulatory  reforms 
to  match  its  ambitions  in  place.  Renewable 
energy,  representing  over  40%  of  electricity 
production,  is  now  the  second  largest  source  of 

(57)  The internet-supported information and communication 
system for the pan-European market surveillance 

(1) On electricity, the band consumption is DC for households 
and ID for industry 
(2) On gas, the band consumption is D2 for households and I4 
for industry 
Source: Eurostat 

important 
Renewable  gases  can  be  an 
complement  to  renewable  electricity  and 
there  are  untappedpotential  to  explore. 
Ireland’s  hydrogen  strategy,  still  in  the  making,  is 

38 

 
                                                 
   
 
important  for  bridging  the  gap  between  R&I  and 
market  uptake,  helping  to  make  the  EU  more 
competitive.  In  an  effort  to  step  up  its  support 
towards  innovative  energy  companies,  Ireland’s 
SEAI has since 2021 published yearly calls to fund 
innovative  energy  Research  Development  and 
Demonstration  projects  which  will  help  accelerate 
Ireland's  transition  to  a  clean  and  secure  energy 
future. 

Graph A7.2: Venture capital investments in climate 
tech start-ups and scale-ups in Ireland 

Source: JRC elaboration based on PitchBook data (06/2022) 

in 

Ireland’s  green 
transition  necessitates 
reskilling  and  upskilling  of  the  workforce. 
Despite having a relatively low share of workers in 
energy-intensive  industries  (1.39%  versus  3.06% 
in  the  EU),  Ireland’s  move  away  from  carbon-
towards  more 
intensive  sources  of  energy 
sustainable, renewable energy sources is expected 
to  affect  jobs  in  the  Midlands  and  its  electricity-
generating  industry,  with  upskilling  and  reskilling 
there  being  particularly 
the  workforce 
of 
important.  Employment 
the  environmental 
goods  and  services  sector  is  still  relatively  low 
(1.7% versus 2.2% in the EU), and wind and solar 
energy  potential,  as  well  as  energy  efficiency 
improvements,  offer  further  opportunities  for 
green  jobs.  On  the  other  hand,  the  availability  of 
qualified  workers  may  also  become  a  bottleneck 
given  the  pace  of  change  required  for  Ireland  to 
achieve  its  objectives.  Ireland  currently  shows 
comparatively  low  unemployment  rates  and  high 
labour  shortages  in  the  industry  sector:  Ireland 
ranks  among  top  EU  countries 
in  terms  of 
proportion  of  businesses  in  clean  energy  relevant 
manufacturing  experiencing  labour  shortages  that 
limit their production.  

renewables 

penetration 

further  upscaling 

needed to determine the role hydrogen can play in 
its 
future  energy  system  and  guide 
the 
deployment and use. There is also still potential to 
see what can be done in key sectors to reach the 
country’s 
and 
decarbonisation  targets.  This  would  include  in 
particular 
its  biomethane 
production. Ireland has set an indicative target for 
domestic  biomethane  production  of  1.6  TWh  by 
2030. Considering the Irish agricultural sector, the 
waste  and  by-streams  of  whose  livestock  and 
dairy  industry  are  suitable  for  biogas,  potential  is 
significantly higher. It is estimated that it could be 
around  12.53  TWh.  It  follows  that,  in  view  of  the 
REPowerEU  objectives  and  the  current  high  prices 
of  methane,  this  indicative  target  should  be 
increased,  and  the  policies  and 
significantly 
measures necessary for it to be reached should be 
specified  in  the  revised  national  energy  and 
climate plan. 

a 
base 

traditionally 
of 

strong 
Ireland 
has 
manufacturing 
low-carbon 
technologies  and  components  (in  particular 
is  set  to  be 
for  offshore  wind).  This 
strengthened, given the deployment needs in 
order  to  achieve  decarbonisation  objectives. 
Ireland  is  also  among  the  European  countries 
leading  world  export  for  power  management 
systems. The transition to clean energy is mineral 
intensive.  It  will  therefore  require  a  considerable 
supply  of  many  critical  minerals  (Annex  5).  Some 
Irish  companies  are  among  the  biggest  European 
manufacturers  of  uninterruptible  power  supply 
systems,  power  distribution  units,  smart  meters 
and  inverters.  Irish  companies  are  also  major 
players 
the  power  management  systems 
research  and  innovation  (R&I)  field.  However, 
public  investment  in  R&I  as  an  EU  Energy  Union 
priority (58)  decreased  from  0.022%  in  2014  to 
0.009%  in  2021  as  a  share  of  GNI*  (0.017%  to 
0.005%  as  a  share  of  GDP).  There  was  also  a 
downward  trend  in  venture  capital  investment  in 
climate  tech  start-ups  and  scale-ups  (9.5%  in 
2021 compared to 17.1% in 2020 as a percentage 
of  total  venture  capital  investment),  with  Ireland 
representing nearly 2.5% of the EU’s total venture 
capital  investments  in  climate  tech  start-ups  and 
scale-ups (6.3% in 2020). More public and private 
investments  in  clean  energy  R&I,  scale-up  and 
affordable  deployment  are  crucial.  They  are  also 

in 

(58)  Renewables, smart systems, efficient systems, sustainable 

transport, carbon capture, utilisation and storage, and nuclear 
safety, COM(2015) 80 final (Energy Union Package).  

39 

0,1%1,3%23,6%98,2%22,6%99,9%0,5%53,3%0,5%0%10%20%30%40%50%60%70%80%90%100%201920202021[% per sector]Built EnvironmentIndustry & Carbon techFood & Land useEnergy - Generation & Grid techTransport & Mobility20,8197,4170,30,025,050,075,0100,0125,0150,0175,0200,0225,0[Investments VC Investments in climate tech firms[EUR mln] 
                                                 
  
Table A7.1: Key Energy Indicators 

(1) The ranking of the main supliers is based on the latest available figures (for 2021) 
(2) includes FSRU 
(3) Venture Capital investments include Venture Capital deals (all stages) and Private Equity Growth/Expansion deals (for 
companies that have previously been part of the portfolio of a VC investment firm) 
Source: Eurostat, Gas Infrastructure Europe (Storage and LNG Transparency Platform), JRC SETIS (2022), JRC elaboration based 
on PitchBook data (06/2022) 

40 

EU20182019202020212018201920202021Import Dependency [%] 68%69%71%77%58%61%57%56%of Solid fossil fuels 113%68%56%106%44%44%36%37%of Oil and petroleum products 98%99%103%98%95%97%97%92%of Natural Gas 39%53%64%71%83%90%84%83%Dependency from Russian Fossil Fuels [%]of Hard Coal 1%6%22%81%40%44%49%47%of Crude Oil0%0%0%0%30%27%26%25%of Natural Gas 0%0%0%0%40%40%38%41%20152016201720182019202020212022Gross Electricity Production (GWh)28,39130,51330,87631,13930,96232,27631,872-Combustible Fuels20,72023,38722,52521,54619,77119,44020,968-Nuclear0000000-Hydro1,0959738959321,1321,2241,036-Wind6,5736,1477,4448,64010,01911,5499,776-Solar 461222406293-Geothermal 0000000-Other Sources0000000-Net Imports of Electricity (GWh)673-712-679-28645-1521,588-   As a % of electricity available for final consumption 2.62%-2.70%-2.53%-0.10%2.29%-0.53%5.35% -Electricity Interconnection (%)--7.4%7.1%6.3%6.6%0.0%0.0%20152016201720182019202020212022Gas Consumption (in bcm)4.45.15.35.45.45.55.25.8Gas Imports - by type (in bcm)4.22.01.72.02.93.43.7-Gas imports - pipeline4.22.01.72.02.93.43.7-Gas imports - LNG0.00.00.00.00.00.00.0-Gas Imports - by main source supplier (in bcm) (1)United Kingdom4.22.01.72.02.93.43.7-2019202020212022LNG TerminalsNumber of LNG Terminals (2)0000LNG Storage capacity (m3 LNG)0000Underground StorageNumber of storage facilities0000Operational Storage Capacity (bcm)00002019202020212022VC investments in climate tech start-ups and scale-ups (EUR Mln) (3)20.8197.4170.3n.a.as a % of total VC investments in Ireland4.1%17.1%9.5%n.a.Research & Innovation spending in Energy Union R&i priorites Public R&I (EUR mln)25.122.423.3n.a.Public R&I (% GDP)0.007%0.006%0.005%n.a.Private R&I (EUR mln)150.5n.a.n.a.n.a.Private R&I (% GDP)0.04%n.a.n.a.n.a.ELECTRICITYIRELANDENERGY DEPENDENCECLEAN ENERGYDIVERSIFICATION OF GAS SUPPLIES 
 
   
 
ANNEX 8: FAIR TRANSITION TO CLIMATE NEUTRALITY 

This  Annex  monitors  Ireland’s  progress  in 
ensuring  a  fair  transition  towards  climate 
neutrality  and  environmental  sustainability, 
notably  for  workers  and  households 
in 
vulnerable situations. The number of jobs in the 
green  economy  has  recently  risen  in  Ireland.  To 
ensure  a  fair  green  transition  in  line  with  the 
Council  Recommendation (59), 
and 
reskilling  measures  will  promote  smooth  labour 
market  transitions  and  the  implementation  of 
REPowerEU.  Ireland’s  recovery  and  resilience  plan 
(RRP) outlines crucial reforms and investments for 
a  fair  green  transition (60),  complementing  the 
territorial 
transition  plan  and  actions 
supported  by  the  European  Social  Fund  Plus 
(ESF+). 

upskilling 

just 

in 

intensity  of 

(GHG)  emissions 

Employment 
Ireland’s  sectors  most 
affected  by  the  green  transition  remains 
almost  stable,  but  workers 
in  declining 
activities need active support. The greenhouse 
gas 
Ireland’s 
workforce  declined  from  27.8  to  22.8  tonnes  per 
worker  between  2015  and  2021.  Yet  it  continues 
to be above the EU average of 13.7 in 2020. (see 
Graph A8.1  and  Table A8.1).  Agriculture  is  the 
largest  contributor 
to  greenhouse  emissions, 
followed  by  the  transport  and  energy  industries 
and the residential sector. Employment in Ireland’s 
energy-intensive  industries  (EII)  represented  a 
share  of  0.9%  of  total  employment  in  2021  (in 
2020:  1.10  vs  3.0%  in  the  EU).  Employment  in 
mining  and  quarrying  decreased  by  28.5%  since 
2015 (to around 5 000 workers). Total jobs in the 
environmental  goods  and  services  sector  grew  by 
56.7%  (to  38 096)  during  2015-19  (EU:  8.3%), 
reaching  1.6%  of  total  employment  (EU:  2.2%) 
(see Annex 9 for circular jobs specifically). The job 
vacancy  rate  in  construction,  which  is  key  for  the 
green transition, is relatively low, 1.3% vs 4.0% in 
the  EU  in  2022.  Young  workers  (18-24  years), 
people  with  disabilities,  ethnic  minorities  (e.g. 
Roma  and  Travellers),  single  parents  and  those 
with  lower  educational  background  face  greater 
challenges  with  regards  to  job  transitions/job 
changes when compared to the general population 
(see  Annex  14).  The  RRP  includes  a  measure  to 

equip workers with green skills, aiming to improve 
their employability.  

jobs 

Upskilling  and  reskilling  in  declining  and 
transforming  sectors 
represent  a  key 
challenge.  Skills  are  key  for  smooth  labour 
market 
in 
transitions  and  preserving 
transforming  sectors.  In  Ireland,  35%  of  citizens 
believe  they  do  not  have  the  necessary  skills  to 
contribute  to  the  green  transition  (EU:  38%)  (61) 
(cf.  Annex  15).  To  promote  skills  development, 
specific  investment  under  the  RRP  and  the  Just 
for 
Transition  Mechanism  provide 
reskilling  workers  in  regions  affected  by  the 
transition, together with a broader training offer at 
national  level under  the  SOLAS  recovery  skills 
programme (62).  In  Ireland,  2.3%  of  ESF+  funding 
contributes to green skills and jobs. The European 
Agricultural  Fund  for  Rural  Development  (EAFRD) 
also  helps  improve  access  to  knowledge  and 
innovation for the rural community. 

training 

Graph A8.1: Fair transition challenges in Ireland 

Source: Eurostat, EMPL-JRC GD-AMEDI/AMEDI+ projects and 
World Inequality Database (see Table A8.1).           

While  energy  poverty 
indicators  were 
improving between 2015 and 2021, the spike 
in  energy  prices  can  be  expected  to 
aggravate  the  situation (63).  The  share  of  the 
total  population  unable  to  keep  their  homes 
adequately  warm  declined  from  9%  in  2015  to 
3.2%  in  2021  (below  the  EU  average  of  6.9%  in 

(59)  Council Recommendation of 16 June 2022 on ensuring a fair 
transition towards climate neutrality (2022/C 243/04) covers 
employment, skills, tax-benefit and social protection 
systems, essential services and housing. 

(61)  Special Eurobarometer 527. Fairness perceptions of the 

green transition (May – June 2022). 

(62)  Department of Public Expenditure and Reform (2021) 
Ireland's 2021 National Recovery and Resilience Plan 

(60)  See 2022 Country Report Annex 6 and Annex 3 for an 

(63)  Economic and Social Research Institute (2022) Energy 

overview. 

poverty at highest recorded rate 

41 

00.20.40.60.811.21.41.61.82GHG per workerEmployment EIIEducation &training EIIEnergy povertyTransportpoverty(proxy)CarboninequalityEU LatestIE Latest (vs EU Latest)IE 2015 (vs EU Latest) 
 
                                                 
  
                                                 
 
Table A8.1: Key indicators for a fair transition in Ireland 

Source: Eurostat (env_ac_ainah_r2, nama_10_a64_e, ilc_mdes01), EU Labour Force Survey (break in time series in 2021), EMPL-
JRC GD-AMEDI/AMEDI+ projects and World Inequality Database (WID). 

2021) (64). In particular, 8.1% of the population at 
risk  of  poverty  in  2021  (EU:  16.4%  in  2021)  and 
3.8%  of  lower  middle-income  households  (in 
deciles  4-5)  were  affected  in  2021  (EU:  8.2%  in 
2021). Before the energy price hikes, an estimated 
18.8%  of  the  total  population  and  45.9%  of  the 
(AROP) 
(expenditure-based) 
population  had  residential  expenditure  budget 
shares  on  electricity,  gas,  and  other  fuels (65) 
above  10%  of  their  household budget (still  below 
the  estimated  EU  average  of  26.9%  and  48.2%, 
respectively).  

at-risk-of-poverty 

the 

The  increased  energy  prices  in  2021-2023 
negatively  affect  households’  budgets,  in 
particular  for  low-income  groups.  As  a  result 
of energy price changes during the August 2021 to 
January  2023  period  relative  to  the  18  months 
prior (cf. Annex 7), in the absence of policy support 
and  behavioural 
fraction  of 
responses, 
individuals living in households which spend more 
than  10%  of  their  budget  on  energy  would  have 
increased  by  21.7  percentage  points (pps)  for  the 
whole  population  and  by  24.9  pps  among  the 
(expenditure-based)  AROP  population,  more  than 
the  EU-level  increases  of  16.4  pps  and  19.1  pps, 
respectively (66).  Expenditure  shares  of  low  and 
lower-middle income groups would have increased 
the most, which is most pronounced for electricity, 
as  shown  in  Graph A8.2.  Among  the  (expenditure-
based)  AROP  population,  the  share  of  individuals 
living in households with budget shares for private 
fuels (67)  above  6%  would  have 
transport 
increased less than the EU average (3.7 pps vs 5.3 

(64)  Energy poverty is a multi-dimensional concept. The indicator 
used focuses on an outcome of energy poverty. Further 
indicators are available at the Energy Poverty Advisory Hub.   

(65) Products defined according to the European Classification of 
Individual Consumption according to Purpose (ECOICOP): 
CP045. 

(66)  EMPL-JRC GD-AMEDI/AMEDI+ ; see details in the related 

technical brief.  

(67)  ECOICOP: CP0722. 

pps), reaching 43.6% in January 2023 (EU: 37.1%) 
due to the increase in transport fuel prices.  

Access to public transport displays an urban-
rural divide. Citizens perceive public transport to 
be  relatively  available  (49%  vs  55%  in  the  EU), 
affordable  (57%  vs  54%  in  the  EU)  and  of  good 
quality (58% vs 60% in the EU). As regards these 
perceptions,  rural  areas  were  below  the  EU 
average  on  all  three  dimensions. (68)  The  average 
carbon  footprint  of  the  top  10%  of  emitters 
(households with the highest incomes) among the 
population in Ireland is 5.9 times higher than that 
of the bottom 50% (see Graph A8.1), while the EU 
average is 5.0 times higher.  

Graph A8.2: Distributional impacts of energy prices 
due to rising energy expenditure (2021-2023) 

Mean change of energy expenditure as a percentage (%) of 
total expenditure per income decile (D) due to observed price 
changes (August 2021 – January 2023 relative to the 18 
months prior), excl. policy support and behavioural responses. 
Source: EMPL-JRC GD-AMEDI/AMEDI+ projects, based on 
Household Budget Survey 2015 and Eurostat inflation data 
for CP0451 and CP0452. 

(68)  EU (rural): 46%, 48%, 55%. Special Eurobarometer 527. 

42 

0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%4.0%ElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasD1D2D3D4D5D6D7D8D9D10IE GasIE ElectricityEU GasEU ElectricityIndicatorDescriptionIE 2015IE LatestEU LatestGHG per workerGreenhouse gas emissions per worker - CO2 equivalent tonnes27.822.8 (2021)13.7 (2021)Employment EIIEmployment share in energy-intensive industries, including mining and quarrying (NACE B), chemicals (C20), minerals (C23), metals (C24), automotive (C29) - %1.21.1 (2020)3 (2020)Education & training EIIAdult participation in education and training (last 4 weeks) in energy-intensive industries - %9.9 (2018)10.4 (2022)Energy povertyShare of the total population living in a household unable to keep its home adequately warm - %93.2 (2021)6.9 (2021)Transport poverty (proxy)Estimated share of the AROP population that spends over 6% of expenditure on fuels for personal transport - %39.943.6 (2023)37.1 (2023)Carbon inequalityAverage emissions per capita of top 10% of emitters vs bottom 50% of emitters6.45.9 (2020)5 (2020) 
                                                 
   
 
                                                 
 
  
 
PRODUCTIVITY 
ANNEX 9: RESOURCE PRODUCTIVITY, EFFICIENCY AND CIRCULARITY 

The  circular  economy  transition  is  key  to 
climate  and 
delivering  on 
the  EU’s 
environmental  goals  and  provides 
large 
socio-economic  benefits. It  spurs  job  growth, 
innovation  and  competitiveness  and 
fosters 
resilience  and  resource  security.  The  circularity 
transition  of  industry,  the  built  environment  and 
agri-food  can  generate  significant  environmental 
improvements (see Annex 6), as they rank among 
the most resource-intensive systems. 

Ireland’s  circular  economy  transition  needs 
accelerating  to  meet  the  EU’s  circular 
economy goals. The EU’s 2020 circular economy 
action  plan  (CEAP)  aims  at  doubling  the  circular 
material  use  rate  between  2020  and  2030. 
Ireland’s circular use of material slightly increased 
from 1.7% in 2016 to 2% in 2021, well below the 
EU  average  of  11.7%.  As  its  growth  was  lower 
than that of the EU-27 overall, the gap with the EU 
average  has  widened.  The  CEAP  also  aims  to 
significantly  decrease  the  EU’s  material  footprint. 
In  2020,  Ireland’s  material  footprint  (10.8%)  was 
below  the  2020  EU-27  average  (13.7%)  and 
experienced a drop in its upward trend since 2016. 
As regards health and safety in circular jobs, fatal 
accidents  in  waste  management  and  materials 
recovery  are  above  the  average  of  all  economic 
sectors in Ireland and above the EU average (69). 

Ireland  recently  adopted  new  policies  to 
address  circular  economy  challenges,  but 
more  measures  are  needed.  In  2020,  Ireland 
adopted  the  Waste  Action  Plan  for  a  Circular 
Economy to improve the country’s performance in 
waste  prevention  and  management.  However, 
Ireland  does  not  yet  have  an  updated  waste 
management  plan  in  line  with  the  new  Waste 
Framework  Directive. 
for 
Government,  Our  Shared  Future,  and  the  new 
2020-2025  Waste  Action  Plan:  A  Waste  Action 
Plan  for  a  Circular  Economy  (September  2020) 
committed  to  a  range  of  actions  to  support  the 
transition to a circular economy. This included the 
adoption  of  a  high-level  whole-of-government 
circular  economy  strategy  that  was  launched  in 
December  2021  for  implementation  in  2022.  The 
Circular Economy and Miscellaneous Provisions Act 
2022  was  signed  into  law  in  July  2022.  The  new 

The  Programme 

(69)  Eurostat HSW_N2_02 for NACE Rev. 2 sector E38; 14.33 

fatal accidents p. 100 000 employed in 2018-2020 vs 1.69 
for all sectors in IE; 6.33 in the EU-27 for sector E38 

national  waste  management  plan  for  a  circular 
economy is expected at the beginning of 2023. 

Graph A9.1: Trend in material use 

Source: Eurostat 

Graph A9.2: Treatment of municipal waste 

Source: Eurostat 

The  recycling  performance  in  Ireland  has 
been  stagnating  for  several  years.  Ireland’s 
recycling  rate  for  municipal  waste  was  40.8%  in 
2020,  and  it  missed  the  EU  target  for  recycling 
50%  of  municipal  waste  by  2020.  While 
improvements  in  waste  management  are  being 
made,  Ireland  is  at  risk  of  missing  the  2025 
recycling target of 55% for municipal solid waste. 
In  addition,  with  27.5%  recycling  of  plastic 
packaging,  it  is  also  at  risk  of  missing  the  50% 

43 

0.050.0100.0150.0200.0250.0300.0350.0400.0450.0500.00.02.04.06.08.010.012.014.016.0201620172018201920202021kg/capitatonnes/capitaMaterial footprint Ireland (tonnes/capita)Material footprint EU-27 (tonnes/capita)Trade in recyclable raw materials Ireland (imports extra EU, kg/capita)Trade in recyclable raw materials EU-27 (imports extra EU, kg/capita)581576598625644010020030040050060070020162017201820192020Kg per capita Difference waste generated/treatmentLandfill/disposalTotal incineration (including energy recovery)Composting and digestionMaterial recyclingEU-27 
 
 
                                                 
          
 
        
 
 
Table A9.1: Overall and systemic indicators on circularity 

(1) Persons employed in the circular economy only tracks direct jobs in selected sub-sectors of NACE codes E, C, G and S; (2) the 
circular material use rate measures the share of material recovered and fed back into the economy in overall material use; (3) the 
recovery rate of construction and demolition waste includes waste which is prepared for reuse, recycled or subject to material 
recovery, including through backfilling operations; (4) soil sealing: 2016 column refers to 2015 data; (5) food waste includes 
primary production, processing and manufacturing, retail and distribution, restaurants and food services, and households.  
Source: Eurostat, European Environment Agency 

target  for  plastic  packaging  waste.  Ireland  will 
need to make further efforts to meet the recycling 
targets  by  2035 
in 
through 
separate collection and treatment of waste.  

improvements 

industry, 

The industrial system is increasingly circular. 
The  economy,  particularly 
is  more 
efficient  at  using  materials  than  the  EU  average, 
with  a  resource  productivity  of  3.2  purchasing 
power standard per kilogramme vs 2.3 for the EU 
in  2021,  further  increasing  Ireland’s  resilience (70) 
(see  Annex  5).  After  some  stagnation,  there  is  an 
increasing trend since 2020, indicating potential to 
boost  repair,  reuse  and  the  us  of  secondary  raw 
materials. 

The  built  environment  system  continues  to 
exacerbate 
resources 
the  depletion  of 
despite  recent  improvements.  The  recovery 
rate  of  construction  and  demolition  waste  has 
increased  since  2016  and  was  above  the  EU 
average.    However,  this  needs  to  be  nuanced  as 
the  data  are  not  available  for  2019,  2020  and 
2021.  Soil  sealing  progressed  between  2015  and 

(70)  Resource productivity is defined as the ratios GDP at 

purchase power parity over domestic material consumption. 
However, in some cases, modified GNI (GNI*), which excludes 
globalisation effects, might more accurately reflect the 
income standards of Irish residents than GDP. Nominal GNI* 
was 54,8% of GDP in 2021. See Central Statistics Office, 
‘Modified GNI’ for more detail. 

2018 at a lower rate than the EU average. There is 
scope for renovating existing buildings in line with 
resource  and  energy  efficiency  measures  and 
improving  their  use  instead  of  building  new  ones, 
as  well  as  increasing  the  share  of  secondary  raw 
materials  used  in  construction.  The  Irish  recovery 
and  resilience  plan  provides  for  energy  efficiency 
investments in private and public buildings.  

The  agri-food  system  needs  to  further 
develop  initiatives  to  tackle  food  waste. 
Ireland’s  composting  and  anaerobic  digestion  per 
head  has  increased  moderately  since  2016  but 
remained below the EU-27 average in 2020 at 70 
kg  per  head  vs  97  kg.  Increasing  anaerobic 
digestion 
strategic 
autonomy  by  generating  biomethane  and/or 
producing  organic 
fertilisers.  The  new  CAP 
strategic  plan  provides  for  some  support  for 
producers to make investments in reducing waste. 

could  enhance 

Ireland’s 

There remains a financing gap in the circular 
economy, 
including  waste  management.  
Additional  investments  will  be  required  to 
address  growing  needs.  The  financing  gap  was 
estimated  at  EUR  879  million  per  year  between 
2014  and  2020.  Over  this  period,  investment 
needs  were  estimated  to  be  at  least  EUR  966 
million  per  year,  while  investment  baselines  were 
EUR 87 million per year (see Annex 6). Investment 
areas  such  as  eco-design,  repair,  reuse  and 

44 

AREA201620172018201920202021EU-27 Latest year EU-27Overall state of the circular economyMaterial footprint (tonnes/capita)12.412.712.914.410.8-13.72020YoY growth in persons employed in the circular economy (%)1------2.92019Water exploitation index plus (WEI+) (%)0.70.70.70.6--3.62019IndustryResource productivity (purchasing power standard (PPS) per kilogram)2.32.32.42.42.73.22.32021Circular material use rate (%)21.71.71.61.61.72.011.72021Recycling rate (% of municipal waste)40.740.437.737.440.8-49.62021Built environmentRecovery rate from construction and demolition waste (%)396.0-100.0---89.02020Soil sealing index (base year = 2006)4103.4-107.9---108.32018Agri-foodFood waste (kg per capita)5----155.0-131.02020Composting and digestion (kg per capita)40.051.050.060.070.0-100.02021 
                                                 
 
     
 
remanufacturing  as  well  as  the  uptake  of  new 
business  models  will  be  necessary  to  reach  the 
EU’s  circular  economy  objectives.  Additional 
investments  are  needed  in  improving  separate 
waste  collection  and  treatment  infrastructure  to 
divert waste from landfilling and incineration. 

45 

 
ANNEX 10: DIGITAL TRANSFORMATION 

transformation  by  2030, 

Digital  transformation  is  key  to  ensuring  a 
resilient and competitive economy. In line with 
the  Digital  Decade  Policy  Programme,  and  in 
particular  with  the  targets  in  that  Programme  for 
digital 
this  Annex 
describes  Ireland’s  performance  on  digital  skills, 
digital 
the 
digitalisation  of  businesses  and  public  services. 
Where relevant, it makes reference to progress on 
implementing  the  Recovery  and  Resilience  Plan 
(RRP).  Ireland  allocates  32%  of  its  total  RRP 
budget to digital (EUR 0.3 billion) (71). 

infrastructure/connectivity 

and 

The  Digital  Decade  Policy  Programme  sets 
out a pathway for Europe’s successful digital 
transformation  by  2030.  The  Programme 
provides  a  framework  for  assessing  the  EU’s  and 
Member States’ digital transformation, notably via 
the  Digital  Economy  and  Society  Index  (DESI).  It 
also  provides  a  way  for  the  EU  and  its  Member 
States  to  work  together,  including  via  multi-
country  projects,  to  accelerate  progress  towards 
the  Digital  Decade  digital  targets  and  general 
objectives (72).  More  generally,  several  aspects  of 
digital  transformation  are  particularly  relevant  in 
the current context. In 2023, the European Year of 
Skills, building the appropriate skillset to make full 
use of the opportunities that digital transformation 
offers  is  a  priority.  A  digitally  skilled  population 
increases the development and adoption of digital 
technologies  and  leads  to  productivity  gains (73). 
Digital  technologies,  infrastructure  and  tools  all 
play  a  role  in  the  fundamental  transformation 
needed to adapt the energy system to the current 
structural challenges (74). 

Ireland scores highly on all indicators related 
to  digital  skills.  In  Ireland,  the  share  of  the 
population that has at least basic digital skills and 
the  percentage  of  ICT  specialists  is  above  the  EU 

(71)  The share of financial allocations that contribute to digital 
objectives has been calculated using Annex VII of the RRF 
Regulation. 

(72)  The Digital Decade targets as measured by DESI indicators 
and complementary data sources are integrated to the 
extent currently available and/or considered particularly 
relevant in the MS-specific context.  

(73)  See for example OECD (2019): OECD Economic Outlook, 

Digitalisation and productivity: A story of complementarities, 
OECD Economic Outlook, Volume 2019 Issue 1 | OECD 
iLibrary (oecd-ilibrary.org). 

(74)  The need and possible actions for a digitalisation of the 
energy system are laid out in the Communication 
‘Digitalisation the energy system – EU action plan’ 
(COM(2022)552. 

average.  The  RRP  includes  several  measures  to 
further  improve  basic  digital  skills,  in  particular 
those  of  students,  and  to increase  the  number  of 
ICT graduates. 

For 

Ireland  performs  well  in  the  area  of  digital 
infrastructure/connectivity. 
instance, 
Ireland scores above the EU average both in fixed 
(5G)  broadband 
(optical  fibre)  and  wireless 
coverage,  but  at  least  1  Gbps  broadband  take-up 
is  low  (7.5%  compared  to  the  EU  average  of 
13.8%) (75).  The  RRP  envisages  building  a  low-
latency  edge  platform  to  harness  5G  technology 
for the benefit of public services. 

Irish  businesses  have 
integrated  digital 
technology well. The share of SMEs with at least 
a  basic  level  of  digital  intensity  is  considerably 
above  the  EU  average.  Businesses  in  Ireland  are 
good  at  making  use  of  available  digital 
technologies.  For  example,  use  of  big  data  and 
cloud  computing  services  are  above  the  EU 
average  and  the  use  of  artificial  intelligence  by 
Irish companies is at par with the EU average. The 
RRP  includes  several  measures  to:  (i)  support  the 
digitalisation of businesses (including the creation 
of  Irish  European  Digital  Innovation  Hubs);  (ii) 
advance  digital  capabilities  through  developing  a 
shared  government  data  centre;  and  (iii)  promote 
digital-related investment in R&D. 

in 

Ireland  are  highly 
Public  services 
digitalised. This is true for services provided both 
to businesses and to citizens. To facilitate people's 
interaction with public services, Ireland has set up 
an  electronic  identification  (eID)  scheme  called 
MyGovID.  However,  Ireland  has  not  yet  notified 
this  scheme  to  the  Commission  under  the  eIDAS 
Regulation. Currently no access opportunities exist 
for citizens in Ireland that allow access to routine 
healthcare  information  in  a  digital  environment. 
The RRP aims to create an online response option 
for  the  population  census  and  includes  a  suite  of 
eHealth projects. 

(75)  Communications Committee based on iDATE. 

46 

 
 
                                                 
                                                 
 
Table A10.1: Key Digital Decade targets monitored by DESI indicators 

(1) The 20 million target represents about 10% of total employment. 
(2) The Fibre to the Premises coverage indicator is included separately as its evaluation will also be monitored separately and 
taken into consideration when interpreting VHCN coverage data in the Digital Decade. 
(3) At least 75 % of Union enterprises have taken up one or more of the following, in line with their business operations: (i) cloud 
computing services; (ii) big data; (iii) artificial intelligence.   

Source: Digital Economy and Society Index 

47 

EUDigital Decade target by 2030 DESI 2021DESI 2022DESI 2023DESI 2023(EU)Digital skillsAt least basic digital skillsNA70%70%54%80%% individuals2021202120212030ICT specialists (1)5.7%6.3%6.3%4.5%20 million% individuals in employment aged 15-7420202021202120212030Digital infrastructure/connectivityFixed Very High Capacity Network (VHCN) coverage67%78%84%73%100%% households20202021202220222030Fibre to the Premises (FTTP) coverage (2)48%62%72%56%-% households20202021202220222030Overall 5G coverage30%72%84%81%100%% populated areas202020212022202220305G coverage on the 3.4-3.8 GHz spectrum bandNANA56%41%-% populated areas202220222030Digitalisation of businessesSMEs with at least a basic level of digital intensityNANA85%69%90%% SMEs202220222030Big data (3)23%23%23%14%75%% enterprises20202020202020202030Cloud (3)NA47%47%34%75%% enterprises2021202120212030Artificial Intelligence (3)NA8%8%8%75%% enterprises2021202120212030Digitalisation of public servicesDigital public services for citizensNA808177100Score (0 to 100)2021202220222030Digital public services for businessesNA10010084100Score (0 to 100)2021202220222030Access to e-health recordsNANA071100Score (0 to 100)202320232030Ireland 
 
 
  
 
 
 
ANNEX 11: INNOVATION 

This  Annex  provides  a  general  overview  of  the 
performance  of  Ireland’s  research  and  innovation 
system,  which  is  essential  for  delivering  the  twin 
green and digital transition. 

is  a 

innovator’  with 
‘strong 
Ireland 
performance  at  118.9%  of  the  EU  average 
and  above  the  average  of  the  strong 
innovators  (114.5%) (76).  Ireland’s  performance 
is  increasing  (by  7.1 percentage  points  between 
2015 and 2022) although at a lower rate than the 
EU’s during the same period (9.9 pps) and its lead 
include 
over  the  EU 
employment  in  knowledge-intensive  activities  and 
the  percentage  of  people  with  tertiary  education, 
while  the main  weakness is  the  low  level  of  R&D 
both in the public and business sector. 

is  shrinking.  Strengths 

innovation 

research 
in 

The 
and 
(R&I) 
recovery  and 
Ireland’s 
investments 
resilience  plan  can  be  expected  to  boost 
overall  R&D  intensity.  The  National  Grand 
Challenge  measure  uses  challenge-based  funding 
to 
innovation  and 
incentivises  researchers  to  focus  on  projects  with 
potential  to  contribute  to  the  climate,  healthcare 
and  agriculture  sectors,  and  facilitate  the  green 
and digital transition. 

research  and 

support 

Graph A11.2: Public expenditure on R&D as % of 
GDP and GNI* 

Graph A11.1: EIS performance 2015-2022 

Source: Eurostat 

Source: European Innovation Scoreboard 2022 

Ireland’s  R&D  intensity  (R&D  expenditure  as 
a  percentage  of  GDP)  in  2021,  at  1.06  %,  
was  among  the  lowest  in  the  EU.  This  is  a 
significant  fall  from  1.23%  in  2020,  although the 
large increase in Ireland’s GDP in 2021 (13%) had 
an impact and gross domestic expenditure on R&D 
(GERD)  in  nominal  terms  fell  only  marginally 
(-2%). In terms of modified gross national income 
(GNI*),  which  excludes  distortions  from  foreign-
owned firms, Ireland’s R&D intensity in 2021 was 
1.93%.  Nevertheless,  research  intensity  in  Ireland 
has  been  on  a  declining  trend  since  2010  (-3.7% 
per annum) while public R&D intensity, at 0.21% in 
2021 (0.38% in GNI*), is also among the lowest in 
the EU. 

in 

the 

reflected 

Ireland  has  a  relatively  well-developed  R&I 
system and a strong public science base. This 
level  of  high-quality 
is 
in  science  and 
publications,  new  graduates 
engineering,  and  employment 
in  fast-growing 
companies.  Ireland’s  new  R&I  strategy,  Impact 
2030,  aims  to  deliver  system-wide  impacts  and 
add  value  to  the  activities  of  R&I  performers  and 
funders (77).  However,  the  very  low  level  of  public 
R&D intensity may be placing this performance at 
risk. 

Innovation  policy  tends  towards  tax  credits 
as  the  preferred  means  of  stimulating  firm-
level  R&D  investments.  These  tax  credits  are 
effective  but  might  not  be  as  useful  to  start-ups 
and innovative young firms in emerging sectors, as 
highlighted 
recently  published  smart 
specialisation  strategy (78).  Though  most  R&D  tax 
credit  recipients  are  small  and  medium-sized 
enterprises  (SMEs),  they  only  account  for  a  small 
percentage of SMEs, and receive little support. In  

the 

in 

(76)  2022 European Innovation Scoreboard, Country profile: 

Ireland ec_rtd_eis-country-profile-i.e.pdf (europa.eu) The EIS 
provides a comparative analysis of innovation performance 
in the EU countries, including the relative strengths and 
weaknesses of their national innovation systems (also 
compared to the EU average). 

(77)  Impact 2030: Ireland’s research and innovation strategy 
(2022) gov.i.e. - Impact 2030: Ireland’s Research and 
Innovation Strategy (www.gov.i.e.). 

(78)  National smart specialisation strategy for innovation 2022-
2027 (p. 79) national-smart-specialisation-strategy-for-
innovation-2022-2027.pdf (enterprise.gov.ie). 

48 

809010011012013014020152016201720182019202020212022EUIE00.10.20.30.40.50.60.70.80.920102015201620172018201920202021EUIEIE (GNI*) 
 
   
                                                 
   
                                                 
 
Table A11.1: Key innovation indicators 

(1) EU average for the latest available year or the year with the highest number of country data. 
Source: Eurostat, OECD, DG JRC, Science-Metrix (Scopus database and EPO’s Patent Statistical database), Invest Europe, CSO 

2020,  large  companies  accounted  for  11%  of 
those taking part in the tax credit scheme but 71% 
of  the  cost  to  the  Exchequer (79).  Greater  use  of 
direct  funding  instruments  could  thus  help  to 
stimulate research and innovation and improve the 
productivity of Irish firms, especially SMEs. 

(79)  Ireland’s Competitiveness Challenge 2022 (p. 43) National 

Competitiveness and Productivity Council. 

49 

EUaverage(1)R&D intensity (GERD as % of GDP)1.591.181.231.231.062.26R&D intensity (GERD as % of GNI*)2.061.922.082.291.93Public expenditure on R&D as % of GDP0.500.330.310.320.210.76Public expenditure on R&D as % of GNI*0.650.540.520.600.38Business enterprise expenditure on R&D (BERD) as % of GDP1.100.850.910.910.841.49Business enterprise expenditure on R&D (BERD) as % of GNI*1.431.381.541.701.53Scientific publications of the country within the top 10% most cited publications worldwide as % of total publications of the country 11.612.611.4::9.8Patent Cooperation Treaty patent applications per billion GDP (in PPS)2.31.91.5::3.3Public-private scientific co-publications as % of total publications7.39.49.39.18.47.1Public expenditure on R&D financed by business enterprise (national) as % of GDP0.0110.0090.012::0.054Public expenditure on R&D financed by business enterprise (national) as % of GNI*0.010.010.02::New graduates in science & engineering per thousand pop. aged 25-3417.818.224.126:16Total public sector support for BERD as % of GDP0.180.320.21::0.19Total public sector support for BERD as % of GNI*0.230.510.36::R&D tax incentives: foregone revenues as % of GDP0.130.270.18::0.10R&D tax incentives: foregone revenues as % of GNI*0.170.440.30::Share of environment-related patents in total patent applications filed under the Patent Cooperation Treaty (%)9.410.28::13.3Venture capital (market statistics) as % of GDP0.040.040.060.070.060.07Venture capital (market statistics) as % of GNI*0.050.070.100.130.11Employment in fast-growing enterprises in 50% most innovative sectors6.67.110.8::5.52021Ireland2010201520192020Finance for innovation and economic renewalKey indicators Quality of the R&I systemAcademia-business cooperationHuman capital and skills availabilityPublic support for business enterprise expenditure on R&D (BERD)Green innovation  
 
                                                 
 
   
 
ANNEX 12: INDUSTRY AND SINGLE MARKET 

Graph A12.1: Labour productivity comparison for 
the foreign and domestic sectors 

Ireland’s  small  open  economy  model  has 
in  the  face  of 
proved  to  be  robust 
overlapping  global  risks  including  Brexit, 
COVID-19 and supply and energy disruptions 
caused  by  Russia’s  invasion  of  Ukraine. 
Having  weathered 
the  COVID-19  pandemic, 
Ireland’s real GDP in 2022 grew by 12.0% year on 
year. Even accounting for the distorting effects of 
companies,  modified  domestic 
multinational 
demand  grew  by  8.2%  in  2022.  Despite  this 
steady  performance,  and  in  part  due  to  its 
economic  structure,  challenges  that  are  common 
across  Member  States  such  as  supply  chain 
disruptions  and  skills  shortages,  as  well  as  local 
issues  such  as  infrastructure,  access  to  finance, 
and  late  payments,  are  asymmetrically  weighing 
on Ireland’s SMEs and indigenous industry.   

created  a 

While  Ireland’s  economy  has  been  robust,  a 
productivity  gap  between  large  and  small 
two-speed 
enterprises  has 
economy  (Graph  A12.1).  Labour  productivity  in 
Ireland has been one of the highest in the EU over 
the  past  five  years  thanks  to  a  small  number  of 
foreign-owned  multinational  enterprises  operating 
in a limited number of sectors. Between 2017 and 
2019,  the  share  of  value  added  attributed  to 
foreign-owned  multinationals  was  43.2%,  nearly 
four  times  greater  than  the  EU  average.  In  2021, 
while SMEs in Ireland grew by 5% in value added 
and  1.2%  in  employment,  large  enterprises  grew 
by  20.2%  and  3.3%  respectfully.  Real  labour 
productivity  in  industry  grew  by  11.7%  between 
2018  and  2021,  way  above  the  EU  average  of 
0.95%.,  propelled  by  the  pharmaceutical  and 
information/communications sectors. The presence 
of multinationals in a sector can have positive and 
negative  spillover  effects.  Industries  that  are 
dominated  by  multinationals  are  associated  with 
the  huge 
fewer  domestic  entrants  due 
capability  gap,  whereas  linkages  in  overlapping 
domestic-multinational  sectors  can  enhance  the 
economy’s  resilience (80).  Ireland’s  White  Paper  on 
Enterprise  highlights  the  country’s  aspirations  to 
strengthen  linkages  ‘between  MNEs  and  SMEs  by 
developing  ecosystems  and  mentoring  which  can 
help  local  firms,  including  High  Potential  Start 
Ups’.   

to 

Source: CSO 

and 

factors 

communication 

levels  greater 

The shortage of labour and materials are the 
biggest 
Irish  business 
limiting 
activity.  Ireland’s  rapid  recovery  in  employment 
than  pre-pandemic  has 
to 
exacerbated  labour  and  skills  shortages.  Despite 
the  vacancy  rate  in  Ireland  scoring  below  the  EU 
average, half of firms in the services sector report 
labour shortages compared with an EU average of 
30%.  In  particular,  there  is  a  critical  shortage  in 
information 
analysists, 
engineers,  and  construction  workers.  Higher 
frequency data suggests that the total number of 
postings are 63% higher post-pandemic at the end 
of 2022, than pre-pandemic. According to the EIB 
Investment  Survey,  92%  of  Irish  firms  cite  a 
dearth  of  skilled  staff  as  a  barrier  to  investment, 
one  of  the  highest  in  the  EU.  This  challenge  can 
also  hold  back 
innovation.  Lack  of  qualified 
personnel  was  cited  as  one  of  the  most  common 
factors hampering innovation activities in 2020. As 
well  as  labour  shortages, materials  shortages  are 
a major limiting factor for activity. In 2022, more 
in  the 
in 
than  half  of  firms 
construction  sector  reported  materials  shortages, 
way  above  EU  averages.  While  two  in  five  firms 
had  difficulties  sourcing  materials  due  to  COVID-
19,  the  United  Kingdom  as  the  most  popular 
sourcing destination suggests Brexit is creating the 
main  supply  bottleneck;  54%  of  firms  had  been 
impacted by an increased regulatory burden due to 
Brexit (81).   

industry  and 

(80)  The role of relatedness and strategic linkages between 
domestic and MNE sectors in regional branching and 
resilience (2022) Landman, Ojanpera, Kinsella, and O’Clery 

(81)  CSO Ireland, Global Value Chains 2021  

50 

05010015020025030035040020012003200520072009201120132015201720192021Labour Productivity (GVA per Hour Worked)Labour Productivity Comparison for the Foreign and Domestic SectorsDomestic and OtherForeign SectorTotal Economy 
 
                                                 
   
                                                 
 
 
While  COVID-19  accelerated  the  digital 
transformation,  Ireland  must  intensify  its 
green transition to boost its competitiveness 
in light of global energy risks (see annex 6). 
While  a  large  proportion  of  Irish  firms  are  aware 
of  climate  risks,  few  are  prepared  –  69%  of 
businesses  have  no  climate  action  plan  for  the 
future (82).  The  results  are  starker  when  looked  at 
by firm size, with 73% of SMEs having no climate 
action  plan  whatsoever,  compared  to  34%  of 
larger  enterprises.  59%  of  SMEs  indicate  they 
have  no  plans  to  invest  in  energy  efficiency  over 
the  next  year (83).  Measures  under  the  Irish  RRP 
aim to tackle the decarbonisation of the enterprise 
sector but limit their focus to manufacturing.  

Delays in payments to Irish business hamper 
their  ability  to  operate  and  invest  in  the 
future. In 2022, it took businesses an average of 
54 days to receive payment from other businesses 
(B2B),  and  74  days  from  the  public  sector.  The 
payment  gap  between  the  terms  offered  to 
businesses  and  the  actual  payment  is  one  of  the 
widest in the EU. On average, there is a gap of 14 
days for B2B payments, and 19 days for payments 
from  the  public  sector.  This  is  in  comparison  to 
figures  in  2019  of  a  1-day  and  3-day  payment 
gap  respectively.  Despite  decreasing  since  2021, 
more  than  half  of  Irish  businesses  are  more 
concerned  than  ever  about  debtor’s  ability  to  pay 
on  time  and  75%  of  firms  stated  that  faster 
payments would enable their company to pay their 
suppliers on time.   

Access 
to  competitively  priced  finance 
remains a high barrier for Irish SMEs, slowing 
their growth.  Despite increasing its score on the 
EIF  Access  to  Finance  Index  over  the  past  four 
years,  Ireland’s  performance  is  hampered  by  its 
expensive  credit  costs.  Interest  rates  in  Ireland 
remain  among  the  highest  in  the  euro  area  and 
second  only  to  Greece  for  the  costliest  borrowing 
conditions  for  SMEs.  This  perception  is  increasing, 
with the percentage of SMEs feeling that there are 
no  financing  obstacles  having  decreased  by  5.5 
percentage  points 
in  2022.  Costly  financing 
conditions  can  be  partly  explained  by  the  lack  of 
competition  in  domestic  banks,  which  is  set  to 

worsen  with  two  banks  exiting  the  Irish  market 
(see annex 18).   

Ireland’s 

its 
performance 

Delivering investment in infrastructure is key 
to  boosting  Ireland’s  competitiveness.  While 
the  2022  IMD  World  Competitiveness  Rankings 
show  Ireland  as  one  of  the  most  competitive 
countries  in  the  world,  ranking  fifth  among  EU 
member  states,  it  highlights  that  Ireland  lags 
levels  of 
behind  the  top  economies  for 
infrastructure. 
on 
infrastructure deteriorated to 23rd place, falling ten 
places  since  2021  and  scoring  particularly  poorly 
in  basic  infrastructure  (41st).  With  its  National 
Development  Plan 
Ireland  has  committed  to 
spending  €165  billion  over  2021-2030.  However, 
Ireland’s planning system has been highlighted as 
a key barrier to the timely delivery of strategically 
important  infrastructure,  such  as  energy  and 
housing (84). Evidence from a recent survey showed 
that 40% of developers set aside 11-15 months to 
receive planning permission, while 61% expect an 
additional  12  months  for  appeals  and  judicial 
reviews (85). 

Some  barriers  to  the  Single  Market  remain. 
Ireland reported a transposition deficit (percentage 
of all directives not transposed) of 2.2% in 2021. 
It  is  one  of  six  Member  States  whose  deficit  is 
more  than  doubled  the  1%  target  set  by  the 
European  Council.  Having  had  a  perfect  score  in 
2012, it is now one of the Member States with the 
highest transposition deficit. In addition, it did not 
transpose  10  of  the  26  single  market  directives 
(38%)  due  to  have  been  transposed  in  the  6 
months before the cut-off date for calculating the 
deficit  (1  June  to  30  November  2021).  On 
regulated  professions,  restrictions  are  higher  than 
the  EU  average  for  real  estate  agents  and  civil 
engineers. The fragmented system regulating civil 
engineers  hinders 
free  movement  of 
professional  and  impacts  on  the  efficiency  of 
service.  

the 

(82)  Kren and Lawless (2023) Firm-level attitudes and actions to 
the “Twin Transition” challenges of digitalisation and climate 
change 

(84)  National Competitiveness and Productivity Council, Ireland’s 

Competitiveness Challenge 2022 

(83)  Department of Finance, SME Credit Demand Survey 

(85)  OECD Economic Surveys Ireland 2022 

51 

 
                                                 
 
                                                 
Graph A12.2: Business environment and 
productivity drivers 

Source: 1) % of GDP, 2021 Eurostat;  
2) composite indicator, 2021 European Investment Fund 
access to finance index;  
3) average payment delay in number of days, 2022 Intrum;  
4) % of firms in manufacturing facing constraints, 2022 
European Commission business consumer survey;  
5) proportion of contracts awarded with a single bidder, 2022 
Single Market Scoreboard. 

While trade with Russia is limited, secondary 
effects  will  have  an  asymmetric  impact  on 
producer  prices.  Owing  to 
its  geographical 
location direct trade links with Russia, Belarus, and 
Ukraine  are  small  and  thus  direct  macroeconomic 
risks  are  limited.  Nevertheless,  some  industries 
which  are  reliant  on  fertilisers  and  specialised 
energy  inputs  are  exposed  to  specific  shocks.  The 
share  of  coal,  coke  and  briquettes  coming  from 
Russia  is  between  60-70%  and  25%  of  Ireland’s 
fertiliser 
Russian 
manufacturers (86),  increasing  prices  by  15.4%  in 
February 2023 when compared to 2022 (87). 

imports 

came 

from 

(86)  OECD Economic Surveys Ireland 2022 

(87)  CSO Ireland, Agricultural Price Indices February 2023  

52 

1) Businessinvestments2) EIF access tofinance index3) Payment gap- G2B3) Payment gap- B2B4) Materialshortage4) Labourshortage5) Single bidsEuropean UnionIreland 
   
 
 
                                                 
 
 
 
 
Table A12.1: Industry and the Single Market 

(*) last available year 
Source: (1) AMECO, (2) Eurostat, (3) ECFIN BCS, (4) Eurostat, (5) COMEXT and Commission calculations, (6) Eurostat, (7) Eurostat, 
(8) OECD, (9) Single Market Scoreboard, (10) EIB survey, (11) Eurostat: (12) Intrum, (13) SAFE Survey, (14) EIF SME Access to 
Finance Index. 

53 

POLICY AREAINDICATOR NAME20182019202020212022EU27 average (*)Net private investment, level of private capital stock, net of depreciation, % GDP (1)2.82813-3.72.23.7Net public investment, level of public capital stock, net of depreciation, % GDP (1)0.70.910.70.90.4Real labour productivity per person in industry (% yoy)(2)12.3-0.620.514.717.81.4Cost competitive-nessNominal unit labour cost in industry (% yoy)(2)-2.44.9-17.8-10.8-11.42.9Material shortage (industry), firms facing constraints, % (3)171314385247Labour shortage using survey data (industry), firms facing constraints, % (3)16179254728Vacancy rate (business economy)(4)1.110.71.31.53.1Concentration in selected raw materials, Import concentration index based on a basket of critical raw materials (5)0.160.140.140.150.160.18Installed renewables electricity capacity, % of total electricity produced (6)39.543.344.745.6n.a.50.8Single Market integrationEU trade integration, % (7)33.132.630.132.835.445.8RestrictionsEEA Services Trade Restrictiveness Index (8)0.040.040.040.040.040.05Public procurement Single bids, % of total contractors (9)141614152129Investment obstaclesImpact of regulation on long-term investment, % of firms reporting business regulation as major obstacle (10)20.116.113.518.41729.6Bankruptcies, Index (2015=100)(11)n.a.n.a.n.a.n.a.n.a.86.8Business registrations, Index (2015=100) (11)117118.793.1102.381.4121.2Payment gap - corporates B2B, difference in days between offered and actual payment (12)-8116131413Payment gap - public sector, difference in days between offered and actual payment (12)12320111915Share of SMEs experiencing late payments in past 6 months, % (13)n.a.43.239.334.938.643EIF Access to finance index - Loan, Composite: SME external financing over last 6 months, index values between 0 and 1 (14)0.250.210.220.24n.a.0.46EIF Access to finance index - Equity, Composite: VC/GDP, IPO/GDP, SMEs using equity, index values between 0 and 1 (14)0.190.20.130.16n.a.0.23BUSINESS ENVIRONMENT - SMEsBusiness demographyLate paymentsAccess to financeHEADLINE INDICATORSEconomic StructureRESILIENCEShortagesStrategic dependenciesSINGLE MARKET 
 
 
 
 
 
 
   
 
ANNEX 13: PUBLIC ADMINISTRATION 

This  Annex  outlines  the  performance  of 
is 
Ireland’s  public  administration,  which 
essential for providing services and carrying 
out reforms. Despite the COVID-19 crisis, Ireland 
level  of  government 
has  maintained  a  high 
to  other  Member 
effectiveness, 
compared 
States (88).  The  modernisation  of 
Irish  public 
services  is  an  important  part  of  the  government 
agenda.  The  civil  service  renewal  action  plan (89) 
outlines  specific  initiatives  until  2024  to  boost 
digital transformation and embed innovation in the 
civil  service,  build  a  workforce  fit  for  the  future 
and improve the use of evidence in the design and 
delivery of policies and services.  

E-government  in  Ireland  scores  around  the 
EU  average  and  shows  significant  progress 
for  several  aspects.  Following  the  COVID-19 
crisis,  the  share  of  people  interacting  with  the 
government via the internet has increased sharply 
to  92%  in  Ireland  and  is  currently  among  the 
highest in the EU (Table A13.1). Ireland also scores 
high  on  the  open  data  maturity  index,  which  can 
be positively affected by the planned development 
of  a  shared  government  data  centre  under 
Ireland’s recovery and resilience plan.  

civil 

service  has  a 

strong 
Ireland’s 
educational  profile  and  attracts  young 
professionals.  The  share  of  civil  servants  with 
higher education was above the EU-27 average in 
2022,  unlike  the  participation  of  civil  servants  in 
adult  training  and  gender  parity  in  senior  civil 
service  positions,  which  has  however  improved 
significantly since 2017 (Table A13.1). To increase 
skills in the civil service, the government has been 
reviewing  the  general  grading  system,  pay  scales 
and 
for  senior  civil 
servants (90),  and  examining  the  effect  of  COVID-
19 and remote working on productivity. 

recruitment  processes 

Regulatory  governance  in  Ireland  remains 
below  the  EU  average.  The  OECD  indicators  on 
regulatory  policy  and  governance  show  below-
average  performance  on 
impact 
assessments,  public  consultation  and  ex  post 
evaluation  of  legislation  (Table  A13.1).  Impact 
legal 
assessment 

is  mandatory 

for  major 

regulatory 

(88)  World Bank, Worldwide Governance Indicators, 2021.  

(89)  Department of Public Expenditure and Reform (2021) Civil 

Service Renewal 2024 Action Plan. 

(90)  Department of Public Expenditure and Reform (2022) Report 

of the Independent Hours. 

54 

initiatives, but there is no oversight of  the quality 
of the analysis. Ireland has been working to set up 
online public consultations on legislative proposals, 
however  this  is  not  yet  systematic (91).  To  boost 
evidence-based  policymaking,  the  Department  of 
Public  Expenditure  and  Reform  has  been  taking  a 
series of steps to increase the use of foresight (92) 
and behavioural insights.  

The lack of data on the efficiency of litigious 
and  non-litigious  civil  and  commercial  cases 
means it is not possible to properly evaluate 
the  overall  efficiency  of  the  judicial  system. 
The  main  challenge  is  the  length  of  proceedings. 
According to the 2021 annual report of the Courts 
Service,  the  length  of  proceedings  in  the  High 
Court in 2021 was 797 days, 137 days more than 
in 2020. The quality of the judicial system overall 
is  good.  The  number  of  judges  in  the  High  Court 
has increased, although the number of judges per 
person  in  Ireland  remains  low.  The  government 
continues  to  work  on  addressing  concerns  about 
litigation costs and the legal aid system. The level 
of  digitalisation  is  advanced,  and  Ireland  has 
published  several  digital  strategies  that  may  help 
close  the  gaps  in  the  digitalisation  of  justice.  No 
systemic deficiencies in judicial independence have 
been reported (93).  

(91)  OECD (2022) Better Regulation Practices across the 

European Union. 

(92)  Department of Public Expenditure and Reform (2021) 
Towards a Strategic Foresight System in Ireland. 

(93)  For a more detailed analysis of the performance of the 
justice system in Ireland, see the 2023 EU Justice 
Scoreboard (forthcoming) and the country chapter for Ireland 
in the 2023 Rule of Law Report (forthcoming). 

 
 
                                                 
 
                                                 
 
Table A13.1: Public administration indicators 

(1) High values denote a good performance, except for indicator # 6. (2) 2022 value. If not available, the 2021 value is shown. 
(3) Measures the user centricity (including for cross-border services) and transparency of digital public services as well as the 
existence of key enablers for the provision of those services. (4) Defined as the absolute value of the difference between the 
percentage of men and women in senior civil service positions. 
Flags: (b) break in time series; (u) low reliability. 
Source: ICT use survey, Eurostat (# 1); E-government benchmark report (# 2); Open data maturity report (# 3); Labour Force 
Survey, Eurostat (# 4, 5, 7), European Institute for Gender Equality (# 6); Fiscal Governance Database (# 8, 9); OECD Indicators of 
Regulatory Policy and Governance (# 10). 

Graph A13.1: Ireland. a) Regulatory impact assessment, b) Stakeholder engagement and c) Ex post 
evaluation of legislation 

Source: Indicators of Regulatory Policy and Governance Surveys 2017 and 2021, (http://oe.cd/ireg). 

55 

IE201720182019202020212022EU-27(2)167.263.667.467.091.9 (b)n/a64.82n/an/an/a69.570.771.672.93n/a0.90.90.91.00.90.8461.1 (b)61.062.365.967.8 (b)68.152.0510.5 (b)15.615.311.615.4 (b)14.116.9640.037.435.433.833.420.611.071.7 (b)1.81.61.71.9 (b)1.61.580.70.70.70.70.7n/a0.791.11.11.11.11.1n/a1.5101.25n/an/an/a1.16n/a1.7Medium term budgetary framework indexIndicator (1)E-government and open government dataShare of individuals who used the internet within the last year to interact with public authorities (%)E-government benchmark overall score (3) Open data and portal maturity indexEducational attainment level, adult learning, gender parity and ageingShare of public administration employees with tertiary education (levels 5-8, %)Participation rate of public administration employees in adult learning (%)Gender parity in senior civil service positions (4)Ratio of 25-49 to 50-64 year olds in NACE sector OPublic financial management Strength of fiscal rules indexEvidence-based policy makingRegulatory governance0.000.501.001.502.002.503.0000.511.522.53IE2017IE2021IE2017IE2021Primary lawsSecondary lawsb) Stakeholder engagement MethodologyOversightSystematic adoptionTransparencyEU-270.000.501.001.502.002.503.0000.511.522.53IE2017IE2021IE2017IE2021Primary lawsSecondary lawsc) Ex-postevaluation of legislationMethodologyOversightSystematic adoptionTransparencyEU-270.000.501.001.502.002.503.0000.511.522.53IE2017IE2021IE2017IE2021Primary lawsSecondary lawsa) Regulatory impact assessmentMethodologyOversightSystematic adoptionTransparencyEU-27 
 
 
   
 
   
FAIRNESS 
ANNEX 14: EMPLOYMENT, SKILLS AND SOCIAL POLICY CHALLENGES IN LIGHT OF 
THE EUROPEAN PILLAR OF SOCIAL RIGHTS  

The  European  Pillar  of  Social  Rights  is  the 
compass  for  upward  convergence  towards 
better  working  and  living  conditions  in  the 
EU.  This  Annex  provides  an  overview  of  Ireland’s 
progress in implementing the Pillar’s 20 principles 
and the EU headline and national targets for 2030 
on employment, skills, and poverty reduction. 

The Irish labour market continued to recover 
in  2022,  in  line  with  economic  activity,  but 
challenges  persist 
integrating  under-
in 
represented groups. The post-pandemic increase 
in the employment rate continued, reaching 78.2% 
(20-64  age  group)  in  2022,  well  over  the  EU 
average  of  74.7%.  This  means  that  Ireland  has 
reached  its  2030  national  employment  target  of 
78.2%. The unemployment rate (15-74) decreased 
in Q4-2022 by 0.8 percentage points year-on-year 
to  4.4%,  outperforming  the  EU  average  of  6.1%. 
While  women’s  participation  in  the  labour  market 
steadily increased, it was still significantly lagging 
behind  men’s  participation,  with  a  gender 
employment gap of 11.3 pps in 2022. The increase 
is  likely  due  to  the  combined  effect  of  more 
flexible  working  opportunities  and  continued 
investments in early childhood education and care. 
These  enable  more  women  to  work  in  addition  to 
their  caring  responsibilities.  Despite  these  efforts, 
caring  duties  still  prevented  44.7%  of  women 
outside the labour force from working in 2022. 

As  the  labour  market  tightens,  activating 
those  who  are  still  facing  barriers  to 
employment  will  be  key.  At  13%  in  2021  (EU: 
8.9%),  Ireland  had  one  of  the  highest  rates  of 
people living in very low work intensity households 
(i.e. where working-age adults work less than 20% 
of their work-time potential). This is 1.5 pps higher 
than  in  2020.  The  share  of  children  living in  such 
conditions  also  grew  by  1.2 pps  to  13.6%. 
Furthermore,  a  particularly  high  share  of  people 
with 
(35.2%)  and  persons  with 
disabilities (36.7%) live in workless households. (94) 
The  employment  rate  of  single  parents,  which 
stood at 67.9% in 2021, is also one of the lowest 
in the EU. 

low  skills 

Table A14.1: Social Scoreboard for Ireland 

Update of 27 April 2023. Members States are classified on 
the Social Scoreboard according to a statistical methodology 
agreed with the EMCO and SPC Committees. It looks jointly at 
levels and changes of the indicators in comparison with the 
respective EU averages and classifies Member States in seven 
categories. For methodological details, please consult the 
Joint Employment Report 2023. Due to changes in the 
definition of the individuals' level of digital skills in 2021, 
exceptionally only levels are used in the assessment of this 
indicator; NEET: neither in employment nor in education and 
training; GDHI: gross disposable household income.  
Source: Eurostat 

The  inclusion  of  persons  with  disabilities  in 
the  labour  force  is  another  longstanding 
challenge.  The  disability  employment  gap 
increased in 2021 to 41.3 pps, 2.5 pps worse than 
2020  and  well  above  the  EU  average  of  23  pps. 
While the Roma and Traveller minorities represent 
only around 0.7% of the population and little data 
is  available  on  their  socio-economic  status,  they 
remain  particularly  vulnerable  groups.  The  latest 
figures on Travellers, from 2019 (95), indicate that 
only  17%  of  Traveller  women  and  13%  of  men 
had  paid  jobs.  The  European  Social  Fund  Plus 
(ESF+)  will  continue  to  reach  out  to  these 

(94)  N.B. these two groups may largely overlap as persons with 
disabilities generally have low educational attainment. See 
Kelly, E. and B. Maître (2021) 

(95)  European union agency for fundamental rights (2020) 

Travellers in Ireland 

56 

3.770.58.711.33.8378.24.51.3110.842022.860.6741.32.516.62Critical situationTo watchWeak but improvingGood but to monitorOn averageEqual opportunities and access to the labour marketEarly leavers from education and training(% of population aged 18-24, 2022)Youth NEET rate(% of population aged 15-29, 2022)Gender employment gap(percentage points, 2022)Income quintile ratio(S80/S20, 2021)Share of individuals who have basic or above basic overall digital skills (% of population aged 16-74, 2021)Dynamic labour markets and fair working conditionsSocial protection and inclusionHeadline indicatorPolicy areaBetter than averageAt risk of poverty or social exclusion rate                                            (% of total population, 2021)Employment rate(% of population aged 20-64, 2022)Unemployment rate(% of active population aged 15-74, 2022)Long term unemployment(% of active population aged 15-74, 2022)GDHI per capita growth                                                              (2008=100, 2021)Best performersImpact of social transfers (other than pensions) on poverty reduction (% reduction of AROP, 2021)Children aged less than 3 years in formal childcare(% of population under 3-years-old, 2021)Self-reported unmet need for medical care(% of population 16+, 2021)Housing cost overburden(% of total population, 2021)At risk of poverty or social exclusion rate for children                       (% of population aged 0-17, 2021)Disability employment gap(percentage points, 2021) 
 
 
                                                 
 
   
 
                                                 
 
vulnerable  groups,  with 
specific  measures 
providing  a  range  of  support  from  digital  skills 
training to confidence-building. It is also important 
that public employment services develop targeted 
activation  measures  and  keep  on  improving  their 
effectiveness,  including  by  regularly  evaluating 
past and current activities. 

Ireland is facing substantial labour and skills 
shortages.  Many  employers  report  difficulties  in 
finding  staff,  mainly  due  to  a  shortage  of 
candidates. This particularly affects the ICT, health 
and care sectors, construction, and other manual-
labour  occupations.  The  lack  of  available  housing 
and  high  rents  deter  workers  wishing  to  move  to 
Ireland from abroad. Disadvantaged groups in the 
country would require considerable upskilling to be 
able to meet employers’ demands. Participation in 
adult  learning  over  the  past  4  weeks  stood  at 
11.8% in 2022. To reach  the 2030 adult learning 
national  target,  more  measures  that  encourage 
lifelong learning and close cooperation with social 
partners and civil society will be needed. However, 
many  of  these  stakeholders  report  a  lack  of 
engagement  from  the  government  on  labour  and 
social issues. 

The  cost  of  early  childhood  education  and 
care  (ECEC)  services  below  age  3  decreased 
significantly  in  recent  years,  however  it 
remains  among  the  highest  in  the  EU  for 
most  family  types. (96)  This  contributes  to  the 
low  participation  of  children  under  3  years  in 
formal childcare. The high cost of ECEC is a barrier 
for  lower  income  households  to  access  these 
labour  market 
to  women’s 
services  and 
participation.  Ireland’s  market-driven  approach  to 
childcare  has 
left  marginalised  communities 
underserved as private providers do not operate in 
very  disadvantaged  areas. (97)  Over  recent  years, 
Ireland introduced reforms with increased national 
funding and subsidies to ECEC, which significantly 
reduced  costs,  in  particular  for  lone  parents  who 
now pay well below EU average. Allocation for the 
sector  in  2023  exceeds  EUR  1  billion,  5  years 
ahead of the schedule of the First 5 strategy. The 
ESF+ will also support upskilling of ECEC workers, 
further improving the quality of services. 

this 

trend  are 

reasons  for 

One  in  five  people  in  Ireland  was  at  risk  of 
poverty or  social  exclusion  (AROPE)  in  2021; 
although  this  is  an  overall  improvement, 
disadvantaged  groups  became  poorer.  The 
AROPE  rate  for  persons  with  disabilities  grew  by 
4.3 pps to 39.3%, twice as high as for the general 
population and 10 pps higher than the EU average. 
The  main 
low 
educational  attainment,  high  early  school  leaving 
rates  and  EUR 8 700-12 300  in  individual  extra 
costs  per  year  (e.g.  for  medicine,  mobility  and 
transport) (98). Single parents were most at risk of 
poverty  or  social  exclusion  at  57.7%,  a  0.6 pp. 
increase  from  last  year.  This  puts  Ireland  among 
the  worst  performing  Member  States  for  social 
protection  of  single  parents.  The  latest  data  on 
Travellers  indicated  that  40%  struggle  to  make 
ends meet. Targeted support to improve the social 
protection  of  vulnerable  groups  will  be  essential 
for  Ireland  to  reach  its  national  poverty  reduction 
target for 2030. 

Table A14.2: Situation of Ireland on 2030 
employment, skills and poverty reduction targets 

(1) Adult Education Survey, adults in learning in the past 12 
months (2) Number of persons at risk of poverty or social 
exclusion, reference year 2019 
Source: Eurostat, DG EMPL 

in 

The housing crisis has deteriorated, primarily 
due  to  the  lack  of  available  social  and 
affordable housing. While Ireland performs well 
the  Social 
on  housing  cost  overburden 
Scoreboard,  access  to  housing  remains  a  critical 
issue.  Between  2009  and  2022,  the  number  of 
significantly 
for 
homes 
decreased (99).  Within  this  time,  the  population 
grew by over half a million while the housing stock 
grew  by  less  than  130  000  estimated  units.  In 
addition,  many  private  landlords  have  reportedly 
left  the  market  in  recent  years.  Consequently, 
there  were  almost  58  000  households  on  social 

available 

rent 

(96)  OECD(2023): Benefits and wages: Net childcare cost for 

(98)  Indecon International Research Economists (2021) The Cost 

parents using childcare 

of Disability in Ireland 

(97)  Pobal(2022): Annual Early Years Sector Profile Report 

2020/2021 (p40) 

(99)  The assumption is based on the reduced number of rents on 
daft.ie online rent platform. The Daft.ie Rental Price Report 

57 

IndicatorsLatest dataTrend            (2015-2022)National target by 2030EU target by 203078.2(2022)46.0(2016)0(2021)Adult learning1 (%)64.260Employment (%)78.278Poverty reduction2 (thousands)-90-15 000 
                                                 
 
       
 
                                                 
housing  waiting  lists  in  2022,  with  over  60%  of 
households waiting for more than 2 years. Another 
75  000  households  were,  at  the  end  of  2022, 
reliant  on  short-term  rent-supplement  solutions, 
which  involved  leasing  from  the  private  market 
and  can  exacerbate  already  increasing  housing 
and  rental  prices.  The  Residential  Property  Price 
Index  reached  167.1  in  February  2023,  2.1% 
above its highest level at the peak of the property 
boom in April 2007. Some efforts have been made 
with  a  new  housing  policy  recently  introduced  to 
support  persons  with  disabilities.  Homelessness  is 
at a historic high with 11 988 homeless people in 
the country in March 2023, including almost 3 500 
children.  The  housing  situation  may  aggravate 
further  with  the  influx  of  displaced  people  from 
Ukraine (approximately 80 000 as of April 2023). 

58 

 
 
ANNEX 15: EDUCATION AND TRAINING 

This  Annex  outlines  the  main  challenges  for 
Ireland’s education and training system in light of 
the  EU-level 
targets  and  other  contextual 
indicators  under  the  European  Education  Area 
strategic framework, based on the 2022 Education 
and Training Monitor. 

Key reforms in early childhood education and 
care  (ECEC)  are  ongoing.  The  main  challenges 
have been low wages and poor working conditions 
for staff, and high fees for parents (100). Under the 
First 5 strategy (2019-2028), Ireland has recently 
progressed  on  reforms  on  the  funding  model (101) 
and  the  workforce (102)  to  transform  the  private 
ECEC sector to a model that is increasingly publicly 
funded  and  managed.  Public  investment  for  the 
Core  Funding  scheme  for  year  one  (September 
2022  -  August  2023)  is  EUR 259  million.  The 
providers  who  participate  in  the  scheme  (94%) 
froze parental fees at September 2021 level. New 
Employment  Regulation  orders  improve  the  pay 
for 70% of ECEC workers, establishing for the first 
time  minimum  pay  rates  across  a  range  of  staff 
roles.  The  2023  budget  provides  an  additional 
EUR 121 million to reduce by 25% on average the 
weekly  fee  for  families  availing  of  the  National 
Childcare  Scheme  (NCS).  As  of  end  March,  the 
number  of  children  benefiting  from  the  NCS 
increased by over 100% compared with the same 
period in 2022 (103). The ECCE programme is being 
reviewed in a precursor to putting it on a statutory 
footing. 

The rate of early leavers from education and 
training  is  low  but  remains  high  for  people 
with disabilities. The early school leaving rate at 
3.7%  in  2022  is  among  the  lowest  in  the  EU. 
However, the rate among people with disabilities is 
comparatively high at 10.7% (2018) (104). Research 
in  disabled 
highlights  qualitative  differences 
people’s  educational 
lower 
trajectories,  with 
participation 
in  university  studies.  The  2023 
budget  includes  increased  investment  in  special 

(100) OECD (2021), Strengthening Early Childhood Education and 
Care in Ireland: Review on Sector Quality, OECD Publishing, 
Paris, https://doi.org/10.1787/72fab7d1-en. 

(101) Department of Children, Equality, Disability, Integration and 
Youth (DCEDIY) (2021), Partnership for the Public Good: A 
new Funding Model for Early Learning and Care. 

(102) DCEDIY (2021), The Workforce Plan for Early Learning and 

Care and School-Age Childcare 2022-2028. 

(103) DCEDIY (2021), The Workforce Plan for Early Learning and 

Care and School-Age Childcare 2022-2028. 

(104) EU-SILC UDB 2018, release 2020, version 1. 

education (approximately 10%), with a total spend 
of EUR 2.6 billion to support students with special 
educational needs in both special and mainstream 
education.  This  will  also  expand  the  capacity  for 
segregated  special  classes,  particularly  at  post-
primary  level,  and  for  special  schools.  In  2023, 
686  new  teachers  and  1 194  additional  special 
needs  assistants  will  be  funded,  mostly  going  to 
special  school  settings.  This  raises  concerns 
among  stakeholders  who  advocate  for  more 
investment  in  inclusive  teams  in  mainstream 
schools (105).  Furthermore,  analysis  shows  that 
children in some parts of the country are less likely 
to  access  schools  that  are  not  segregated  (by 
religion, gender, economic capacity) (106). 

Teacher  supply  has  remained  a  significant 
challenge,  in  particular  in  urban  centres.  The 
recent  survey  confirmed  that  a  vast  majority  of 
schools  had  experienced  difficulties  in  teacher 
recruitment  (91%)  and  retention  (61%)  in  the 
previous  6 months (107).  High  costs  of 
living 
(especially  accommodation) 
larger  cities, 
particularly in Dublin,  are a  major  disincentive  for 
teachers  taking  up  temporary  posts,  and  for 
younger 
for 
permanent,  full-time  positions  for  all  teachers, 
moving 
temporary 
away 
employment contracts (108). 

teachers.  Teacher  unions  call 

low-hour 

from 

in 

In  2022, 

The  tertiary  educational  attainment  rate 
rose again; however, the disability education 
gap  remains  wide. 
tertiary 
attainment  rate  rose  by  0.3  pps  compared  with 
2021,  reaching  62.3%,  the  highest  rate  in  the  EU 
(average 42%). Despite progress, Irish people with 
disabilities  still  have  a  20%  higher  chance  of 
having  a 
lower-
secondary level) than their non-disabled peers (109). 

low  education 

(primary  or 

the 

(105) Inclusion Ireland (2022), Budget 2023 Response on 

Education, https://inclusionireland.ie/news-events/budget-
2023-response-on-education/ 

(106) Mancini, J.M. (2022) ‘Children from these communities’ 

https://www.tandfonline.com/doi/full/10.1080/03323315.20
22.2118152 

(107) TUI (2022) https://www.rte.ie/news/2022/1026/1331392-

secondary-schools-recruitment/ 

(108) O’Donovan, B. (2022) ‘Staffing issues may limit school’s 

subject choice – TUI’. 
https://www.rte.ie/news/ireland/2022/0822/1318200-union-
warns-of-teacher-recruitment-and-retention-crisis/. 

(109) Disability, Work and Inclusion in Ireland: Engaging and 

Supporting Employers, OECD, 
https://doi.org/10.1787/74b45baa-en. 

59 

 
 
                                                 
                                                 
 
Table A15.1: EU-level targets and other contextual indicators under the European Education Area 
strategic framework 

Source: (1,3,4,5,7,8,9,10,11) = Eurostat; 2 = OECD (PISA); 6 = European Commission (Joint Research Centre). Notes: Data are not 
yet available for the remaining EU-level targets under the European Education Area strategic framework, covering 
underachievement in digital skills and participation of adults in learning. The equity indicator shows the gap in the share of 
underachievement in reading, mathematics and science (combined) among 15-year-olds between the lowest and highest quarters 
of socio-economic status. For IE, the ECE rate includes participation in ECEC centres, and also in primary schools, which are 
attended by many 4–5 year olds. 

representatives  claim  that  it  will  not  be  sufficient 
to  close  the  core  funding  gap  (estimated  at 
EUR 307 million). High accommodation costs make 
some  students  defer  their  studies.  Under  the 
Recovery  and  Resilience  Facility,  a  consortium  of 
technological  universities  has  been  awarded  an 
initial  EUR 18.1  million  (out  of  EUR 40  million)  to 
support teaching and learning reforms, addressing 
also regional skills needs. 

The  new  national  access  plan  (2022-2028) (110) 
offers  funding  and  support  for  students  from 
disadvantaged 
backgrounds, 
socio-economic 
mature  students, 
Irish  travellers,  Roma,  and 
students  with  special  educational  needs, including 
those with intellectual disabilities. 

‘Funding 

Ireland  has  announced  a  policy  to  create  a 
funding  system 
sustainable 
for  higher 
Future’ 
The 
education. 
framework (111)  prioritises  increased  funding  for 
student  support,  aims  to  make  higher  education 
funding  sustainable  and  seeks  to  improve  the 
quality,  relevance  and  equity  of  higher  education. 
While the budget for 2023 includes for the sector 
a  EUR 150  million  increase  over  2022,  university 

the 

(110) Higher Education Authority (2022) National Access Plan: A 
Strategic Action Plan for Equity of Access, Participation and 
Success in Higher Education 2022-2028 
https://hea.ie/policy/access-policy/national-access-plan-
2022-2028/ 

(111) Department of Further and Higher Education, Research, 

Innovation and Science (2022), https://www.gov.ie/en/policy-
information/49e56-future-funding-in-higher-education/. 

60 

96%78.7%91.9%100.0%202093.0%2020Reading< 15%10.2% 20.0%11.8%201822.5%2018Mathematics< 15%15.0% 22.3%15.7%201822.9%2018Science< 15%15.3% 21.1%17.0%201822.3%2018< 9 %6.8%11.0%3.7% 9.6%Men8.6%12.5%4.7%11.1%Women4.9%9.4%2.8%u8.0%Cities5.2%9.6%:u8.6%Rural areas7.2%12.2%3.7%u10.0%Native6.9%10.0%3.6%8.3%EU-born:u20.7%:u20.3%Non EU-born6.5%u23.4%:u22.1%6Equity indicator (percentage points)::11.8201819.320187Exposure of VET graduates to work based learningTotal ≥ 60% (2025) : :27.9%u60.1%45%54.0%36.5%62.3%42.0%Men47.1%31.2%59.1%36.5%Women60.3%41.8%65.3%47.6%Cities63.2%46.2%70.1%52.2%Rural areas46.6%26.9%54.1%30.2%Native53.2%37.7%58.2%43.0%EU-born48.0%u32.7%54.4%39.5%Non EU-born66.3%27.0%76.6%35.7%25.2% 38.3%20.9%202039.2%2020Tertiary educational attainment (age 25-34)8Total8By gender9By degree of urbanisation10By country of birth11Share of school teachers (ISCED 1-3) who are 50 years or over1Participation in early childhood education (age 3+)2Low achieving 15-year-olds in:Early leavers from education and training (age 18-24)3Total3By gender4By degree of urbanisation5By country of birth20152022IndicatorTargetIrelandEU27IrelandEU27 
                                                 
 
   
 
ANNEX 16: HEALTH AND HEALTH SYSTEMS 

A  healthy  population  and  an  effective, 
accessible  and  resilient  health  system  are 
prerequisites  for  a sustainable  economy and 
society.  This  Annex  provides  a  snapshot  of 
population health and the health system in Ireland.  

Life  expectancy  at  birth  in  Ireland  is  among 
the  highest  in  the  EU,  although  it  decreased 
since  2019.  After  decreasing  by  about  2.5 
months in 2020 due to the mortality impact of the 
COVID-19  pandemic,  in  2021,  life  expectancy  at 
birth in Ireland slipped further down to 82.4 years 
–still one of the highest values across the EU. This 
further decrease can be explained by the fact that, 
in  2021,  COVID-19  mortality  almost  doubled 
compared  to  2020 (112).  In  2020,  the  leading 
causes of death were cancer followed by diseases 
system 
of 
(“cardiovascular 
circulatory 
diseases”).  Mortality 
from  preventable  and 
treatable  causes  in  Ireland  is  lower  than  in  most 
other  EU  countries.  However,  behavioural  risk 
factors  such  as  obesity  and  excessive  alcohol 
consumption are significant public health concerns. 
This  is  partly  reflected  in  the  above-average 
incidence  of  cancer 
Irish  population, 
although  age-standardised  mortality  rates  from 
cancer are close to the EU average.  

in  the 

the 

(mainly 

compared to 10.9% of GDP on average across the 
EU  in  2020 (113).  Expressed  in  euro  per  capita, 
health  spending  in  Ireland  amounted  to  EUR  3 
740,  about  14%  higher  than  the  EU  average. 
Spending  on  medical  goods 
retail 
pharmaceuticals)  is  lower  than  the  EU  average, 
both  as  a  share  of  total  spending 
(12.5% 
compared  to  18.2% 
in  the  EU  overall)  and 
expressed  in  euro  per  capita  (EUR  470  compared 
to EUR 596 in the EU overall). Although household 
out-of-pocket  expenditure  constitutes  a  slightly 
lower-than-average fraction of health expenditure, 
insurance 
towards  voluntary  health 
payment 
represents  nearly  11%  of  total  health  spending, 
which is more than double the EU average. This is 
a  result  of  the  fact  that  almost  half  of  the 
population  acquires  private  health  insurance (114) 
to  bypass  the  long,  persistent  waiting  lists  in  the 
public  system,  which  faces  significant  capacity 
constraints. Public spending on health is projected 
to  rise  by  1.4  percentage  points  (pps)  of  GDP  by 
2070,  compared  to  0.9  pps  for  the  EU  overall, 
highlighting  possible  fiscal  sustainability  concerns 
in the long term (see Annex 11 and Graph A16.2).  

Graph A16.2: Projected increase in public 
expenditure on healthcare over 2019-2070 

Graph A16.1: Life expectancy at birth, years 

Source: Eurostat 

AWG reference scenario 
Source: European Commission / EPC (2021) 

Health  spending  relative  to  GDP  in  Ireland 
increased  but  remained  below  the  EU 
average  in  2020.  Between  2013  and  2019, 
Ireland’s  level  of  health  spending per  capita  grew 
by an average 2.1% per year in real terms, below 
the  3%  average  yearly  increase  across  the  EU. 
Between  2019  and  2020,  health  spending  per 
capita climbed by 9.2%, nearly double the increase 
in the EU on average. This rise was predominantly 
driven  by  government  funding.  Health  spending 
remains  high  at  13.2%  of  GNI*  (7.1%  of  GDP) 

(112) Based on data provided directly by Member States to ECDC 
under the European Surveillance System (data current as of 
13 April 2023). 

Spending  on  preventive  care  rose  in  step 
with  the  trend  observed  across  the  EU  in 
2020.  Between  2019  and  2020,  spending  on 
preventive care in Ireland rose by 36%, compared 
to a 26% increase for the EU overall. The relative 
share  of  health  expenditure  dedicated 
to 
prevention  also  rose  from  2.7%  to  3.3%  –  a 

(113) The effects of multi-national firm activity on Ireland’s GDP 
hinder the comparability of this statistic. Modified gross 
national income (GNI*) can be used as an alternative 
indicator of the size of the domestic economy.  

(114) Houses of the Oireachtas (2022). Retrieved from 

https://data.oireachtas.ie/ie/oireachtas/libraryResearch/2022/
2022-12-15_bill-digest-health-insurance-amendment-bill-
2022_en.pdf, page 6. 

61 

81.782.282.282.882.682.480.980.981.081.380.480.1201620172018201920202021IrelandEU6.64.10.91.402468EUIreland% of GDP20192070increase 
 
        
                                                 
        
                                                 
 
 
Table A16.1: Key health indicators 

Note:  The EU average is weighted for all indicators, except for (*) and (**), for which the EU simple average is used. The simple 
average for (*) uses data for 2020 or most recent year if former not available. Doctors' density data refer to practising doctors in 
all countries except EL, PT (licensed to practice) and SK (professionally active). Nurses' density data refer to practising nurses in all 
countries except FR, PT, SK (professionally active) and EL (nurses working in hospitals only). 
Source: Eurostat; except: ** ECDC 

proportion  slightly  below  the  EU  average.  Across 
the EU, significant increases in prevention-focused 
health  spending  in  2020 were  primarily  driven  by 
extraordinary  expenditure  on  disease  detection, 
surveillance, control and response programmes as 
part of the public health response to COVID-19. 

The  government  is  taking  action  to  address 
the long-standing issues of doctor shortages 
long  wait  times  that  affect  the 
and 
healthcare  system.  Despite  a 
significant 
increase  in  doctor  density  over  the  last  decade, 
Ireland  still  has  fewer  practising  doctors  than  the 
EU  average.  By  contrast,  it  has  a  relatively  high 
density  of  nurses.  Shortages  persist,  despite  the 
large and increasing number of medical graduates 
formed  by  Irish  universities  –  one  of  the  largest 
across  the  EU  in  per-capita  terms.  However,  the 
benefits  of  this 
large  number  of  domestic 
graduates  are  reaped  only  partially,  because  a 
large share of medical graduates are international 
students  with  limited  options  to  complete  their 
postgraduate  practice  in  Ireland.  Taxing  working 
conditions  and  the  comparative  advantages  of 
in  other  English-speaking, 
practising  overseas 
high-income  countries  are  key  drivers 
that 
motivate  an  increasing  number  of  early-career 
Irish-trained doctors to emigrate. The low number 
of doctors retained in Ireland and the subsequent 
difficulties 
the 
in  filling  vacant  posts 
healthcare  system’s  capacity  to  provide  care, 
resulting in long waiting lists in both hospital  and 
outpatient settings. In early 2022, Ireland adopted 
a  EUR  350  million  action  plan  to  shorten  waiting 
lists  for  acute  planned  care.  However,  preliminary 
figures (115)  indicate  that  waiting  lists  decreased 

limit 

(115) National Treatment Purchase Fund (2022). Retrieved from 

https://www.ntpf.ie/home/plannedprocedures.htm. 

to  continued  COVID-19 
only  modestly  due 
disruption and massive pent-up demand arising in 
the post-acute phase of the pandemic. 

in 

Ireland  allocated  7.6%  of  the  resources 
under its RRP to investments and reforms in 
healthcare.  Ireland’s  RRP  envisages  a  set  of 
the  country’s  digital  health 
investments 
infrastructure worth EUR 75 million that are to be 
completed by the end of 2025. These investments 
include developing and setting up e-pharmacy and 
integrated  financial  management  systems  at 
national  level  to  improve  the  use  of  resources  in 
the Irish healthcare system. In the area of reforms, 
through 
introduced  the  new 
Slàintecare Consultant Contract (116), from 8 March 
2023. It is expected to gradually phase out private 
practice  in  public  hospitals,  alleviate  recruitment 
difficulties,  and  reduce  inequalities  in  access  to 
care  engendered  by  the  two-tier  (public/private) 
design of the Irish healthcare system.  

its  RRP, 

Ireland 

(116) Department of Health (2022). Retrieved from 

https://www.gov.ie/en/press-release/33536-minister-for-
health-announces-government-approval-of-new-slaintecare-
consultant-contract/. 

62 

20172018201920202021EU average (latest year) Treatable mortality per 100 000 population (mortality avoidable through optimal quality healthcare)73.375.971.069.7NA91.7 (2020)Cancer mortality per 100 000 population266.6262.1261.5255.5NA242.2 (2020)Current expenditure on health, % GDP 7.26.96.77.1NA10.9 (2020)Current expenditure on health, % GNI*11.611.611.313.2NAPublic share of health expenditure, % of current health expenditure73.074.174.678.8NA81.2 (2020)Spending on prevention, % of current health expenditure 2.72.62.73.3NA3.4 (2020)Acute care beds per 100 000 population278279269270.6NA3.9 (2020)Doctors per 1 000 population *3.33.33.33.54.08.3 (2020)Nurses per 1 000 population *NANANANA12.88.2 (2018)Consumption of antibacterials for systemic use in the community, daily defined dose per 1 000 inhabitants per day (total consumption for CY and CZ) **19.320.721.017.116.314.5 (2021) 
                                                 
 
 
                                                 
 
      
 
ANNEX 17: ECONOMIC AND SOCIAL PERFORMANCE AT REGIONAL LEVEL 

This  Annex  showcases  the  economic  and 
social  regional  dynamics  in  Ireland,  providing 
an  update  on  the  economic,  social  and  territorial 
cohesion in and among the Irish regions compared 
with  the  rest  of  the  EU  and  the  main  regional 
economic recovery challenges.  

Ireland  had  the  second  highest  GDP  per 
capita in the EU in 2021 but internal regional 
disparities  remained  high.  Ireland  outperforms 
the  EU  average  in  terms  of  GDP  per  capita  by  a 
significant margin,  at  219%  of  the  EU  average  in 
2021 (117).  However,  high  disparities  become 
apparent  at  the  NUTS 2  and  NUTS  3  levels.  The 
Southern region’s GDP per capita level was 261% 
of  the  EU  average,  and  the  Eastern  and  Midland 
(EM)  region’s  239%,  while  the  Northern  and 
Western  (NW)  region  lagged  far  behind,  at  83%. 
There  are  also  stark  disparities  within  NUTS  2 
regions. E.g. the Midland NUTS 3 region had a GDP 
per capita of just 55% of the EU average in 2020, 
whereas the Dublin NUTS 3 area was at 270%. 

Graph A17.1: Average GDP per capita growth 
(2011-2020) vs GDP per capita in 2010 

Source: DG REGIO calculations based on JRC (ARDECO) and 
Eurostat data 

Ireland has benefited from high growth over 
the  period  2011-2020  ,  but  it  did  not  bring 
about  convergence  between  regions.  The 
Southern  and  the  EM  regions  grew  by  8.2%  and 
3.4% in 2011-2020, which was well above the EU 
average  of  1%,  but  the  NW  region  grew  only  in 
line with the EU average. The divergence is, again, 
even  more  apparent  at  the  level  of  NUTS  3 
regions, with the NUTS 3 Midland region being the 
only one in Ireland with a negative growth rate (of 
–1.3%).  Strong  growth  therefore  led  to  increasing 
regional  disparities  rather  than  to  convergence  in 
Ireland over the period. 

(117) Ireland’s per capita modified Gross national income (GNI*) 
per capita was, however, 120% of the EU per capita 
GDPaverage in 2021, reflecting the weight of multinationals 
enterprises in the Irish economy. 

63 

in 
between 

levels  of 
Ireland’s 

Wide  differences 
labour 
regions 
productivity 
persist  (Graph  A17.2).  The  NW  region  has  the 
lowest  labour  productivity  growth  of  the  three 
regions  at  0.82%  on  average  in  2011-2020.  The 
Southern  region  is  the  most  productive  and  had 
the  highest  real  productivity  growth,  at  7.61%. 
Labour  productivity  in  the  EM  region  grew  by 
2.45%  in  the  period,  with  some  of  its  counties 
performing  much  better  than  others  (the  NUTS  3 
Midlands  area  was  again  an  underperformer  with 
a  0.9%  decrease  in  real  productivity  over  the 
in 
period. 
productivity  levels  between  indigenous  firms  and 
large  multinational  corporations.  Ireland  remains 
dependent on the activities of a limited number of 
multinational firms, which are concentrated in the 
Southern and EM regions. Lower productivity levels 
and  lower  growth  for  indigenous  companies  have 
contributed to growing regional disparities. 

This  mirrors  wide  differences 

Graph A17.2: Real GVA per worker (2000-2020) 

(1) The light red circle shows the capital city region. The blue 
circles show the remaining NUTS 2 regions. The green 
diamond shows the national average. The purple line shows 
the EU-27 average.  
Source: Eurostat, DG REGIO elaboration 

significant 

differences 

Regional  disparities  are  less  apparent  when 
it comes to employment indicators.  There are 
in 
regional 
no 
unemployment rates, partly due to a high level of 
worker mobility between regions. In 2021, the NW 
region’s  employment  rate  of  74.8%  was  not  very 
far from the Southern region’s 72.9% and the EM 
region’s  76.3%.  All  regions  experienced  a  slight 
decrease  in  employment  due  to  the  COVID-19 
pandemic.  However,  as  mentioned  above, 
productivity  levels  per  person  employed  vary 
significantly  between 
reflects 
differences  in  the  labour  market  between  regions 
and  it  also  partly  explains  stark  differences  in 
disposable  income  of  households  across  regions. 
The  median  household  disposable  income  was 
EUR 52 900  in  the  EM  region,  EUR 41 394  in  the 

region. 

This 

0.51.52.53.54.55.56.57.58.59.5708090100110120130140150160170Annual real GDP per head growth2011-2020 (average % change on the preceding year)GDP (PPS) per head in 2010 (EU = 100)Capital regionOther NUTS2 regionsNational averageEU27456585105125145165185205000102030405060708091011121314151617181920thousands of EUR per  personCapital regionOther NUTS2 regionsEU27National average 
 
  
                                                 
  
 
 
Table A17.1: Selected indicators at regional level in Ireland 

Source: EUROSTAT 

Southern  region  and  EUR 38 183  in  the  NW 
region  (118).  

Map A17.1:  Regional Competitiveness Index 2022 

regions  ranked  as  ‘strong  innovators’.  This  is  also 
mirrored in a lower share of employment in high-
technology  sectors  in  the  NW  region  compared 
with  the  two  other  regions  (the  Southern  and  EM 
regions had shares of 9% and 10.5% respectively, 
but the NW region had a share of less than 6%). 

There  are  stark  regional  differences 
in 
accessibility  levels.  The  NW  region  is  less 
urbanised than the other two and is less accessible 
(90%  and  67%  of  the  population  living  within  a 
radius of 120 km can be reached in less than 90 
minutes 
regions 
respectively, but this ratio drops to less than 55% 
in the NW region (data collected in 2018). 

the  EM  and  Southern 

in 

Regional  disparities  are  also  reflected  in 
poverty  levels.  The NW region’s  population  is  at 
a  higher  risk  of  relative  poverty  than  in  the  other 
two  regions:  in  2021,  26.4  %  of  the  NW  region’s 
population  was  at  risk  of  poverty  and  social 
exclusion  compared  with  22.3  %  in  the  Southern 
region  and  16.4  %  in  the  EM  region.  This  also 
reflects the existing rural-urban divide (26% of the 
rural  areas’  population  is  at  risk  of  poverty  or 
social  exclusion  in  2021,  compared  with  16%  in 
cities). Homelessness nevertheless remains largely 
an  urban  problem.  In  November  2022,  over  70% 
of  people  living  in  crisis  accommodation  were 
registered in the Dublin area (119). 

Ireland is a strong innovator, but there is an 
innovation  divide  between 
regions.  The 
Eastern  and  Midland  region  scores  121.7  in  the 
Regional Competitiveness Index 2022; whereas the 
Northern and Western region scores below the EU 
average,  with  only  98.2,  mainly  due  to  smaller 
markets and weaker infrastructure. The NW region 
was  the  only  region  in  Ireland  to  be  considered a 
‘moderate  innovator’  in  the  EU’s  2021  regional 
innovation  scoreboard,  whereas  the  other  two 

(118) SILC 2021 

(119) gov.ie - Homeless Report - November 2022 (www.gov.ie). 

64 

GDP per head (PPS)Productivity (GVA (PPS) per person employed)Real productivity growthGDP growthGDP per head growthAt-risk-of-poverty income rateAt-risk-of-poverty or social exclusionPopulation aged 30-34 with high educational attainmentEarly school leaversEmployment in high-technology sectorsTransport performance by carRegional Competitiveness Index (RCI)EU27 = 100 2021EU27 = 100% change on the preceding year% change on the preceding year% change on the preceding year% of population% of population% of population aged 30-34% of population aged 18-24% of total employmentPop. within a 1h30 / pop. within 120 km radius x 100Index - values range between 0 and 100European Union100.0100.00.20.80.616.821.741.69.74.881.5100.0Éire/ Ireland219.0230.04.26.05.112.92062.03.310.175.9112.0Northern and Western83.093.00.82.72.119.626.457.66.25.854.798.2Southern261.0285.07.68.98.115.422.362.84.99.866.6105.1Eastern and Midland239.0242.02.54.63.49.116.462.93.511.890.0121.7NUTS region name 
 
 
 
 
 
                                                 
                                                 
 
  
 
MACROECONOMIC STABILITY 
ANNEX 18: KEY FINANCIAL SECTOR DEVELOPMENTS 

In recent years, Ireland has developed into a 
significant  international  financial  centre,  in 
particular  for 
investment  banks,  money-
market  funds,  and  investment  funds.  Irish 
financial  firms  fall  into  two  quite  distinct  groups: 
internationally  oriented  investment  banks,  fund-
management  companies  and  insurance  firms  on 
one  side,  and  retail  banks  serving  the  domestic 
market on the other. Currently, there are five retail 
banks operating in Ireland, two of which are in the 
process of withdrawing from the market (KBC and 
Ulster Bank). The three remaining retail banks are 
domestically  owned,  and  were  until  recently  all 
part-owned  by  the  government,  which  acquired 
stakes  in  these  banks  during  the  Irish  banking 
crisis in 2009. The government still holds shares in 
Permanent  TSB  and  AIB.  In  addition  to  the 
traditional banks, there are also 204 credit unions 
that do not fall under EU banking regulation. These 
provide  basic  banking  services  to  their  members, 
mainly  consumer  loans  and  –  increasingly  –
mortgages  and  small  business  loans.  The  retail 
space  is  also  served  by  non-bank  lenders  that  do 
not  take  deposits  but  have  become  significant 
providers  of  credit  to  SMEs.  As  a  legacy  of  the 
financial  crisis, 
face 
restrictions  on  staff  remuneration,  but  these 
restrictions are being eased.  

retail  banks  still 

the 

a 

Irish  companies  also  make  use  of  market 
Irish 
funding.  The  market-funding  ratio  for 
companies  was  very  high  at  85.6%  in  2021,  but 
this  masks 
large 
difference 
international  corporations  and  smaller  indigenous 
companies.  Smaller  indigenous  companies  rely 
almost  exclusively  on  loans  from  banks  or  the 
burgeoning 
lenders. 
of 
Meanwhile, sustainable financing also expanded in 
2021, as Irish corporates issued significantly more 
green, social, and sustainable bonds 

non-bank 

between 

number 

Investment  banks  account  for  about  half  of 
Irish banking assets but have limited links to 
the domestic economy. The investment banking 
sector  has  grown  significantly  in  recent  years,  as 
these  institutions  looked  for  a  new  EU  base  after 
the  UK  left  the  EU.  The  combined  assets  of  the 
three  main  investment  banks  in  Ireland  grew  to 
EUR  251  billion  at  the  end  of  2021  from  EUR  32 
billion  at  year-end  2015.  These  banks  play  an 
important  role  for  both  the  Irish  and  the  wider 
European  economy,  providing  services  to  their 
serve  mainly 
corporate 

clients.  As 

they 

international  customers,  these  investment  banks 
are less impacted by the domestic economy. 

Overall,  Irish  retail  banks  have  come  a  long 
way from the financial crisis. The Irish banking 
crisis of 2008-2012 left Irish banks burdened with 
many  non-performing  loans  (NPLs).  The  retail 
banks’  NPL  ratio  peaked  at  31.9%  in  Q4  2014. 
Since  then,  they  have  made  progress  in  reducing 
their stock of NPLs, mainly through portfolio sales 
and  securitisation.  However,  their  NPL  ratio  of 
3.2% is still above the EU average of 1.8% of all 
loans, while provision rates of 30.6% are quite low.  

loans 

The pandemic’s impact on the banking sector 
seems to be contained. The Irish banking sector 
withstood the pandemic without major setbacks to 
for 
their  asset  quality.  Government  grants 
their 
households  and  businesses  supported 
solvency (120). However, the risks on banks’ balance 
increased  as  evidenced  by  the 
sheets  have 
stage  2 (121). 
increase 
classified  as 
Meanwhile, household deposits have supported the 
liquidity  position  of  banks,  which  remains  strong 
with  a  liquidity-coverage  ratio  and  net-stable-
funding  ratio  that  is  well  in  excess  of  regulatory 
requirements  and  European  averages.  Irish  retail 
banks  have  long-standing  issues  with  profitability 
due  to:  (i)  their  reliance  on  interest  income  in  a 
low-interest-rate  environment;  (ii)  the  difficulties 
of  achieving  scale  given  the  size  of  their  home 
market;  and  (iii)  the  high  risk  profile  of  their 
assets. However, some developments are expected 
to  improve  their  profitability  in  the  future,  in 
particular  the  general  rise  in  the  level  of  interest 
rates  and  consolidation  in  their  home  market, 
which should improve economies of scale. For the 
entire  sector,  including  the  investment-banking 
sector, return on equity was 2.9% year-to-date in 
Q3  2022.  Irish  banks  are  well  capitalised  with  a 
solvency ratio of 24.3%. 

Higher  energy  prices  and  interest  rates  may 
strain  asset  quality.  Although  profit  margins 

(120) The Employment Wage Subsidy Scheme (September 2020 to 
May 2021) provided affected businesses with a subsidy 
covering their employees’ wages. It succeeded the 
Temporary Wage Subsidy Scheme (26 March to 31 August 
2020). 

(121) According to the classification by the International Financial 
Reporting Standards 9 (IFRS 9) loans the credit quality of 
which has been judged to have deteriorated since the loan 
was initially made. 

65 

 
 
 
                                                 
 
Table A18.1: Financial soundness indicators 

(1) Last data: Q3 2022. (2) Data is annualized. 
GNI* is gross national income excl. depreciation of intellectual property and leased aircraft and income of re-domiciled PLCs. 
Source:  ECB, Eurostat, S&P Global Capital IQ Pro. 

resilient 

is  quite 

have  narrowed  in  the  face  of  rising  energy  costs, 
the  business  sector 
to 
macroeconomic  shocks,  given  that  almost  half  of 
SMEs  report  having  no  debt  balances.  Large 
corporations  were  able  to  sustain  their  leverage 
ratios  on  average  over  the  pandemic  years. 
However,  a  small  number  of  large  corporations 
(10%  of  companies  in  this  group)  have  leverage 
ratios  in  excess  of  0.8,  which  makes  them 
vulnerable to increased financing costs. 

in 

The  resilience  of  the  household  sector  has 
been  bolstered  by  rising  nominal  incomes, 
increased  savings,  and  growth 
the 
valuations of property. Furthermore, half of all 
outstanding  mortgages  are  on 
rates, 
delaying the pass-through of higher interest rates. 
The debt-service-to-income ratio hit a twenty-year 
low  in  2022,  further  highlighting  the  resilience  of 
the  household  sector (122).  Moreover,  households 
with  negative  financial  margins  account  for  less 
than 5% of total outstanding mortgage debt.  

fixed 

A  strong  housing  market  buoyed  mortgage 
lending  in  2022.  Mortgage  lending  saw  a  brisk 
rebound  after  the  pandemic  amidst  accelerating 
house-price growth, as housing supply fell short of 
demand.  The  volume  of  outstanding  mortgages 
exceeds  pre-pandemic 
levels  and  stood  at 
EUR 83.4  billion  in  June  2022,  9.0%  above  the 
level in December 2019. The increase in mortgage 
lending  volumes  came  despite  banks’  disposal  of 

limits 

many  mortgage  NPLs  over  the  same  period.  In 
2022, the central bank completed a review of the 
mortgage-measures  framework,  maintaining  a 
on 
of  macroprudential 
combination 
mortgage  lending.  As  of  1 January 2023,  the 
maximum loan-to-income (LTI)  ratio for first-time 
buyers  was  lifted  from  3.5  to  4,  while  the 
maximum  loan-to-value  (LTV)  ratio  has  been 
maintained  at  90%.  For  subsequent  buyers  (i.e. 
non-first-time  buyers),  the  LTI  ratio  remains  at 
3.5%, while the LTV ratio was raised to 90% from 
80% previously.  

Lending  to  SMEs  has  now  recovered  from 
pandemic  lows,  but  remains  subdued  due  to 
the  high  cost  of  borrowing.  Lending  to  SMEs 
strengthened 
in  the  first  half  of  2022  as 
government  support  schemes  were  phased  out, 
but lending levels have remained below their pre-
pandemic  levels.  In  the  SME  Credit  Demand 
Survey (123),  most  companies  claimed  to  have 
sufficient  internal  funds.  Interest  rates  on  loans 
Ireland  are 
in 
for  non-financial  corporations 
among the highest in the euro area.  

Ireland has become a hub not only for banks 
but  also  for  the  insurance  business.  Several 
firms  work  on  an  outward  cross-border  basis  so 
that  less  than  30%  of  premiums  by  value  are 
written  in  Ireland.  As  elsewhere,  the  unexpectedly 

(122) Central Bank of Ireland, Financial Stability Review 2022-II.  

September 2022. 

(123) Department of Finance, SME Credit Demand Survey April-

66 

201720182019202020212022EUMedianTotal assets of the banking sector (% of GDP)353.5337.4351.0371.8332.2312.0276.8207.9Total assets of the banking sector (% of GNI*)575.4568.1594.1693.2605.4Share (total assets) of the five largest banks (%)45.546.149.755.760.0--68.7Share (total assets) of domestic credit institutions (%)151.248.644.440.744.339.3-60.2NFC credit growth (year-on-year % change)1.23.92.38.423.115.8-9.1HH credit growth (year-on-year % change)-1.5-0.80.1-1.5-1.6-1.2-5.4Financial soundness indicators:1        - non-performing loans (% of total loans)9.95.53.43.42.41.71.81.8- capital adequacy ratio (%)25.225.424.925.425.523.318.619.8- return on equity (%)25.04.93.7-2.24.52.66.16.6Cost-to-income ratio (%)164.566.170.971.573.469.460.651.8Loan-to-deposit ratio (%)195.390.291.583.972.772.888.678.0Central bank liquidity as % of liabilities1.80.70.41.33.90.3-2.9Private sector debt (% of GDP)249.1230.7209.3187.3168.1--120.7Private sector debt (% of GNI*)405.4388.5354.3349.2306.4--Long-term interest rate spread versus Bund (basis points)48.455.458.644.943.760.9-93.3Market funding ratio (%)80.780.982.983.885.6-50.840.0Green bonds issued to all bonds (%)-1.01.11.21.92.33.92.31-34-1011-1718-2425-27Colours indicate performance ranking among 27 EU Member States. 
                                                 
                                                 
 
   
 
high  inflation  is  likely  to  generate  significant 
losses for non-life insurance businesses in Ireland.  

67 

 
ANNEX 19: TAXATION  

This  Annex  provides  an 
indicator-based 
overview  of  Ireland’s  tax  system.  It  includes 
information on the tax structure (the types of tax 
that Ireland derives most of its revenue from), the 
tax  burden  on  workers,  and  the  progressivity  and 
redistributive  effect  of  the  tax  system.  It  also 
provides 
tax  collection  and 
compliance,  and  on  the  risks  of  aggressive  tax 
planning activity. 

information  on 

Ireland’s  tax  revenues  have  high  downside 
risks.  Tax  revenues  as  percentage  of  GNI*  are 
below  the  EU  aggregate  as  a  percentage  of  GDP 
for  labour  taxes  and  property  taxes  (respectively 
16.2%  and  1.9%  of  GNI*  in  2021).  This  also 
includes  tax  revenues  from  recurrent  property 
taxes,  which  are  particularly  conducive  to  growth. 
However,  revenues  from  environmental  taxes  are 
almost at the same level (2.1% of GNI* for Ireland 
and 2.2% of GDP for the EU in 2021). Overall, the 
Irish tax base is narrow and excessively reliant on 
corporate  taxes.  However,  promising  reforms  on 
recurrent  property  taxes  were  enacted,  such  as: 
revaluation  of  properties  for  the  purposes  of  the 
in  the  tax  base  of  previously 
tax,  inclusion 

Table A19.1: Taxation indicators 

excluded properties built since 2013, and a regular 
revaluation every four years. 

Ireland’s  labour  tax  burden  is  relatively  low 
at various wage levels, but more progressive 
than the EU average. The labour tax  wedge for 
Ireland in 2022 was lower than the EU average at 
various  wage  levels  (i.e.  for  single  people  at  the 
average wage (100%) as well as at 50% and 67% 
of  the  average  wage)  (see  Graph  A19.2).  Second 
earners  at  a  wage  level  of  67%  of  the  average 
wage, whose spouses earn the average wage, are 
also  subject  to  a  lower  tax  wedge  than  the  EU 
average,  but  they  are  taxed  more  heavily  than 
single  people  at  the  same  wage  level.  The  tax 
system  is  more  progressive  than  the  EU  average. 
As a result, the tax-benefit system reduces income 
inequality – as measured by the Gini coefficient – 
by significantly more than the EU average in 2021 
(Table A19.1). 

Ireland’s  budgetary  situation  has  improved 
recently,  as  a  result  of  high  corporate  tax 
revenues. Tax receipts improved further in 2022, 
due  to  corporate  tax  receipts  that  reached  record 

(1) Forward-looking effective tax rate (OECD). 
(2) A higher value indicates a stronger redistributive impact of taxation. 
(*) EU-27 simple average  
For more data on tax revenues as well as the methodology applied, see European Commission, Directorate-General for Taxation 
and Customs Union, Taxation trends in the European Union: data for the EU Member States, Iceland, Norway and United Kingdom: 
2021 edition, Publications Office of the European Union, 2021, https://data.europa.eu/doi/10.2778/843047 and the Data on 
Taxation webpage (https://ec.europa.eu/taxation_customs/taxation-1/economic-analysis-taxation/data-taxation_en). 
For more details on the VAT gap, see European Commission, Directorate-General for Taxation and Customs Union, VAT gap in the 
EU: report 2022, Publications Office of the European Union, 2022, https://data.europa.eu/doi/10.2778/109823. 
Source: European Commission, OECD. CSO 

68 

2010201920202021202220102019202020212022Total taxes (including compulsory actual social contributions) (% of GDP)27.821.919.921.137.939.940.040.6Total taxes (including compulsory actual social contributions) (% of GNI*)36.137.137.138.5Labour taxes (as % of GDP)12.29.58.88.920.020.721.320.9Labour taxes (as % of GNI*)15.816.016.416.2Consumption taxes (as % of GDP)9.96.85.76.010.811.110.711.2Consumption taxes (as % of GNI*)12.811.510.511.0Capital taxes (as % of GDP)5.75.75.56.27.18.18.08.5Capital taxes (as % of GNI*)7.49.610.211.2Total property taxes (as % of GDP)1.41.10.91.11.92.22.22.2Total property taxes (as % of GNI*)1.81.91.71.9Recurrent taxes on immovable property (as % of GDP)0.80.50.30.41.11.21.21.1Recurrent taxes on immovable property (as % of GNI*)1.00.90.60.7Environmental taxes as % of GDP2.51.41.21.22.42.42.22.2Environmental taxes as % of GNI*3.22.42.22.1Tax wedge at 50% of average wage (Single person) (*)16.320.921.521.822.133.932.331.932.131.7Tax wedge at 100% of average wage (Single person) (*)30.933.234.034.534.741.040.139.939.639.7(*) EU-27 simple average12.412.412.419.519.419.1Difference in Gini coefficient before and after taxes and cash social transfers (pensions excluded from social transfers) (2) (*)20.516.314.916.68.67.78.17.8Outstanding tax arrears: total year-end tax debt (including debt considered not collectable) / total revenue (in %) (*)5.89.431.640.7VAT Gap (% of VAT total tax liability, VTTL)10.312.511.09.1IrelandEU-27Tax structureProgressivity & fairnessTax administration & compliance 
 
 
 
          
 
 
 
 
 
 
 
Graph A19.1: Outbound foreign direct investment (FDI) payments from Ireland and the rest of the EU-27 
relative to the size of their economies (in % of GDP and GNI * on the left) and in absolute terms (in 
billions of euro on the right), in 2021 

Source: CSO data, European Commission 

levels.  Ireland’s  business  structure  reliant  on  a 
large share of its gross value- added generated by 
firms, 
foreign-owned 
underpinned 
given 
multinational  firms  based  in  Ireland  have  been 
highly profitable recently.  

US-owned) 
- 

development 

(mainly 

that 

imposed  on  outbound 

Ireland  has  incomplete  laws  on  withholding 
taxes 
interest, 
dividends  and  royalty  payments,  but  it  is 
committed to reforms as part of its Recovery 
and Resilience Plan (RRP). The Commission has 
long criticised Ireland for favouring aggressive tax 
planning (ATP). Graph A19.1 shows the importance 
of  outbound  payments 
royalty 
payments)  for  the  Irish  economy.  They  amounted 
to  a  quarter  of  Ireland’s  GDP  in  2021.  Half  of  all 
the  EU’s  outbound  royalty  payments  to  non-EU 
countries  come  from  Ireland.  The  RRP  contains  a 
commitment  to 
legislation  for 
introduce  new 
outbound payments from 2024 in order to prevent 
the tax-free transfer of profits to non-EU countries 
via excessive interest and royalty payments. 

(especially 

royalty  payments  from  zero-tax  jurisdictions  back 
to the US.  

Ireland  is  doing  well  on  digitalisation  of  the 
tax  administration,  which  can  help  reduce 
compliance costs. The Annual report on taxation 
2021 shows that Ireland scores highly on filing tax 
with  100%  and  97%  of  respectively  corporate 
income  and  personal  income  tax  returns  being 
filed  electronically.  The  VAT  gap  (an  indicator  of 
the  effectiveness  of  VAT  enforcement  and 
compliance,  where  a  low  gap  indicates  high 
effectiveness)  in  Ireland  slightly  increased  to 
12.5% in 2020, above the EU-wide gap of 9.1%. 

Graph A19.2: Tax wedge for single and second 
earners as a % of total labour costs, 2022 

Irish  legislation  in  2013  and  2014  to  tackle 
ATP  ended  ‘double  Irish’  structures  which 
were  mainly  used  by  US-based  MNEs  to 
shelter  profits  from  taxation  in  Ireland.  Irish 
reform activity was followed by the 2017 Tax Cuts 
in  the  US  which  had 
and  Jobs  Act  (TCJA) 
introduced  a 
income  category  for 
intangible assets (GILTI) and this created a strong 
incentive for US-based MNEs to repatriate patents 
from low-tax jurisdictions and tax  havens all  over 
the world back to the US. Ireland therefore saw a 
radical  change  during  2020  in  the  direction  of 

low-taxed 

69 

Second earner tax wedge assumes first earner at 100% of 
the average wage and no children. For the methodology of 
the tax wedge for second earners see OECD (2016) “Taxing 
Wages 2014-2015”. 
Source: European Commission 

22.125.534.743.034.020253035404550100150Tax wedge, % of total labour costsEarnings in % of the average wageSingle earner - IESingle earner - EU averageSecond earner -  IESecond earner -  EU average0%5%10%15%20%25%30%35%40%45%50%RoyaltiesDividendsInterestsEU26 as % GDPIE as % of GDPIE as % of GNI*050100150200250300350400450500RoyaltiesDividendsInterests€ billionEU26IE 
          
  
ANNEX 20: TABLE WITH ECONOMIC AND FINANCIAL INDICATORS 

Table A20.1: Key economic and financial indicators 

(1) Domestic banking groups and stand-alone banks, EU and non-EU foreign-controlled subsidiaries and EU and non-EU foreign-
controlled branches. 
(2) Net international investment position (NIIP) excluding direct investment and portfolio equity shares.  
In some cases, modified GNI (GNI*), which excludes globalisation effects, might more accurately reflect the income standards of 
Irish residents than GDP. Nominal GNI* was 54,8% of GDP in 2021. See Central Statistics Office, ‘Modified GNI’ for more detail.  
Source:  Eurostat and ECB as of 2 May 2023, where available; European Commission for forecast figures (Spring forecast 2023). 

70 

2004-072008-122013-1920202021202220232024Real GDP (y-o-y)5.7-1.58.26.213.612.05.55.0Potential growth (y-o-y)4.4-0.38.68.56.47.36.86.0Private consumption (y-o-y)6.0-1.42.8-11.94.76.64.13.9Public consumption (y-o-y)4.4-2.23.410.56.11.60.3-0.5Gross fixed capital formation (y-o-y)8.3-6.224.8-16.5-39.025.91.82.8Exports of goods and services (y-o-y)6.71.812.711.214.115.06.75.5Imports of goods and services (y-o-y) 8.2-0.515.2-2.1-8.319.05.54.5Contribution to GDP growth:Domestic demand (y-o-y)5.6-2.78.2-11.2-14.67.81.41.6Inventories (y-o-y)0.00.00.20.70.31.00.00.0Net exports (y-o-y)-0.32.0-0.816.928.32.13.73.1Contribution to potential GDP growth:Total Labour (hours) (y-o-y)0.8-1.71.81.21.31.81.81.2Capital accumulation (y-o-y)2.20.83.61.7-0.40.40.40.5Total factor productivity (y-o-y)1.40.63.25.65.55.14.64.3Output gap1.8-2.60.4-6.10.34.63.32.3Unemployment rate4.813.08.85.96.24.54.34.3GDP deflator (y-o-y)2.0-0.82.2-1.60.75.34.62.5Harmonised index of consumer prices (HICP, y-o-y)2.50.60.3-0.52.48.14.62.6HICP excluding energy and unprocessed food (y-o-y)2.10.00.6-0.11.65.05.34.1Nominal compensation per employee (y-o-y)5.30.62.03.72.64.25.65.8Labour productivity (real, hours worked, y-o-y)2.42.94.317.56.63.11.83.1Unit labour costs (ULC, whole economy, y-o-y)3.8-1.2-2.9-5.1-4.2-0.82.41.8Real unit labour costs (y-o-y)1.7-0.4-5.0-3.6-4.8-5.8-2.0-0.7Real effective exchange rate (ULC, y-o-y)2.7-3.3-4.1-9.2-4.6-4.3-3.0-1.8Real effective exchange rate (HICP, y-o-y)1.6-2.0-0.90.10.2-4.2..Net savings rate of households (net saving as percentage of net disposable income)1.47.84.121.620.2...Private credit flow, consolidated (% of GDP)30.77.1-4.7-3.62.6...Private sector debt, consolidated (% of GDP)177.1260.4260.0187.3168.1...of which household debt, consolidated (% of GDP)85.7107.558.734.429.7...of which non-financial corporate debt, consolidated (% of GDP)91.4152.9201.2152.9138.4...Gross non-performing debt (% of total debt instruments and total loans and advances) (1)..10.33.02.1...Corporations, net lending (+) or net borrowing (-) (% of GDP)2.38.0-7.0-12.810.71.03.74.6Corporations, gross operating surplus (% of GDP)33.933.949.458.859.461.062.162.7Households, net lending (+) or net borrowing (-) (% of GDP)-8.52.41.67.26.14.44.03.2Deflated house price index (y-o-y)8.4-13.47.2-0.54.25.5..Residential investment (% of GDP)12.33.91.92.12.12.6..Current account balance (% of GDP), balance of payments-3.9-3.4-1.6-6.814.28.811.111.9Trade balance (% of GDP), balance of payments10.415.019.318.939.437.3..Terms of trade of goods and services (y-o-y)-1.1-0.70.0-0.2-2.50.50.80.1Capital account balance (% of GDP)0.20.1-5.8-3.20.9-1.6..Net international investment position (% of GDP)-31.4-120.3-173.2-177.0-145.5-120.7..NENDI - NIIP excluding non-defaultable instruments (% of GDP) (2)1.3-224.8-278.7-294.4-335.1-228.3..IIP liabilities excluding non-defaultable instruments (% of GDP) (2)950.91384.51378.51360.51399.21120.1..Export performance vs. advanced countries (% change over 5 years)9.6-1.942.252.446.3...Export market share, goods and services (y-o-y)-2.8-4.011.023.2-4.010.74.01.6Net FDI flows (% of GDP)11.2-4.0-10.7-30.312.50.7..General government balance (% of GDP)1.5-15.0-1.8-5.0-1.61.61.72.2Structural budget balance (% of GDP)..-1.9-1.8-1.7-0.8-0.11.0General government gross debt (% of GDP)25.484.180.458.455.444.740.438.3forecast 
 
 
 
      
 
 
 
ANNEX 21: DEBT SUSTAINABILITY ANALYSIS 

past  fiscal  performance.  At  the  same  time,  the 
baseline  projections  up  to  2033  benefit  from  a 
favourable  (although  declining)  snowball  effect, 
with  real  GDP  growth  averaging  3.4%  in  2025-
2033.  Government  gross  financing  needs  are 
expected to remain low over the projection period, 
at around 3% of GDP. 

The  baseline  projections  are  stress  tested 
against  four  alternative  scenarios  to  assess 
the  impact  of  changes  in  key  assumptions 
(Graph 1). For Ireland, reverting to historical fiscal 
trajectories under the ‘historical structural primary 
balance  (SPB)’  scenario  would  lead  to  a  higher 
government  debt  ratio.  If  the  SPB  gradually 
converged  to  a  deficit  of  1.8%  of  GDP  (its 
historical 15-year average), the projected debt-to-
GDP ratio would be 41% of GDP in 2033, 21 pps. 
above the baseline. A permanent worsening of the 
macro-financial  conditions,  as  reflected  under  the 
‘adverse interest-growth rate differential’ scenario 
(i.e. 1 pp. higher than the baseline) would result in 
a  debt-to-GDP  ratio  somewhat  higher  than  the 
baseline  projection.  A  temporary  worsening  of 
financial  conditions,  as  captured  by  the  ‘financial 
stress’  scenario,  would  result  in  a  debt  projection 
similar  to  the  baseline.  The  ‘lower  structural 
primary  balance  (SPB)’  scenario  (i.e.  SPB  level 
permanently  reduced  by  half  of  the  cumulative 
forecast  change),  would  lead  to  a  government 
debt-to-GDP  ratio  that  is  about  8  pps.  higher  by 
2033 than the baseline.  

Additionally, stochastic debt projections indi-
cate  low  risks  (Graph  2). (127)  These  stochastic 
simulations  point  to  a  9%  probability  of  the  debt 
ratio in 2027 being greater than in 2022, entailing 
low risk given the initial low debt level. In addition, 
such  shocks  point  to  some  uncertainty  (i.e.  the 
difference  between  the  10th  and  90th  debt 
distribution  percentiles)  surrounding  the  govern-
ment debt baseline projections. 

This  Annex  assesses  fiscal  sustainability 
risks for  Ireland over the short, medium and 
long term. It follows the same multi-dimensional 
approach  as  the  European  Commission’s  2022 
Debt Sustainability Monitor, updated based on the 
Commission 2023 spring forecast. 

1  -  Short-term  risks  to  fiscal  sustainability 
are  low  overall.  The  Commission’s  early-detec-
tion  indicator  (S0)  does  not  signal  major  short-
term fiscal risks (Table A21.2). (124) Gross financing 
needs are expected to remain low at around 4% of 
GDP  in  the  short  term  (2023-2024),  considerably 
below  the  recent  peak  in  2020  (Table  1  of  Table 
A21.1). Financial markets’ perceptions of sovereign 
risk are positive, as confirmed by the ratings of the 
main agencies. 

2 - Medium-term risks to fiscal sustainability 
are low overall.   

The  baseline DSA  for  Ireland shows that  the 
government  debt  ratio 
is  projected  to 
continue  declining  over  the  medium  term,  to 
around 21% of GDP in 2033 (Graph 1). (125) (126) 
The assumed structural primary balance (a surplus 
of  1.6%  of  GDP)  contributes  to  these  develop-
ments. It appears rather ambitious compared with 

(124) The S0 is a composite indicator of short-term risk of fiscal 
stress. It is based on a wide range of macro-financial and 
fiscal variables that have proven to perform well in the past 
in detecting situations of upcoming fiscal stress.  

(125) The assumptions underlying the Commission’s ‘no-fiscal 
policy change’ baseline notably comprise: (i) a structural 
primary surplus, before ageing costs, of 1.6% of GDP as of 
2024; (ii) inflation converging linearly towards the 10-year 
forward inflation-linked swap rate 10 years ahead (which 
refers to the 10-year inflation expectations 10 years from 
now); (iii) the nominal short- and long-term interest rates on 
new and rolled over debt converging linearly from current 
values to market-based forward nominal rates by T+10 (as 
for all Member States); (iv) real GDP growth rates from the 
Commission 2023 spring forecast until 2024, followed by 
EPC/OGWG ‘T+10 methodology projections between T+3 and 
T+10, i.e. for 2025-2033 (on average 3.4%); (v) ageing costs 
in line with the 2021 Ageing Report (European Commission, 
Institutional Paper 148, May 2021). For information on the 
methodology, see the 2022 Debt Sustainability Monitor 
(European Commission, Institutional Paper 199, April 2023). 

(126) Table 1 shows the baseline debt projections and its 

(127) These projections show the impact on debt of 2000 different 

breakdown into the primary balance, the snowball effect (the 
combined impact of interest payments and nominal GDP 
growth on the debt dynamics) and the stock-flow 
adjustment.  

shocks affecting the government’s primary balance, 
economic growth, interest rates and exchange rates. The 
cone covers 80% of all simulated debt paths, therefore 
excluding tail events. 

71 

 
 
 
 
                                                 
 
 
                                                 
 
 
Finally,  several  additional  risk  factors  need 
to  be  considered  in  the  assessment.  On  the 
one hand, risk-increasing factors include the recent 
increase  in  interest  rates,  a  relatively  large  share 
of  short-term  public  debt  as  well  as  public  debt 
held  by  non-residents  and  the  negative  net 
international 
investment  position,  though  this 
largely reflects the presence of multinationals and 
the International Financial Services Centre. Finally, 
alternative  metrics  to  GDP  suggest  higher  fiscal 
sustainability  risks.  On  the  other  hand,  risk-
mitigating 
stable 
include 
financing  sources  (with  a  diversified  and  large 
investor base), the currency denomination of debt, 
In 
and  historically  still 
addition, 
the 
NGEU/RRF,  if  fully  implemented,  could  have  a 
further  positive  impact  on  GDP  growth  in  the 
coming years, and therefore help to mitigate debt 
sustainability risks. 

low  borrowing  costs. 

reforms  under 

the  structural 

relatively 

factors 

3  -  Long-term  risks  to  fiscal  sustainability 
are medium overall. (128)  

The  S2  sustainability  gap 
indicator  (at 
3.4 pps.  of  GDP)  points  to  medium  risks, 
suggesting  that 
Ireland  would  need  to 
improve  its  structural  primary  balance  to 
ensure debt stabilisation over the long term. 
This results from the projected increase in ageing 
costs,  in  particular  for  spending  on  pensions 
(2.3 pps.  of  GDP),  long-term  care  (1.6 pps.)  and 
health  care  (1.2 pps.)  (Table  2).  Hence,  while 
several investments and reforms in the RRP contri-
bute to supporting the efficiency of the Irish health 
care system, additional measures may be required 
to  further 
improve  the  efficiency  and  fiscal 
sustainability of the Irish long-term care system. 

Given  low  long-term  debt  vulnerabilities,  as 
highlighted by the S1 indicator, overall long-
term  risks  are  assessed  as  medium.  Indeed, 
the  S1  sustainability  gap  indicator  signals  that  a 
limited consolidation effort of 1 pp. of GDP would 
suffice to bring debt to 60% of GDP by 2070. This 
result  is  driven  by  the  projected  ageing  costs 
(3.5 pps.),  partly  offset  by  the  favourable  initial 
budgetary  position  (-2 pps.)  and  moderate  debt 
level (-0.5 pps.) (Table 2).  

(128) The S2 fiscal sustainability gap indicator measures the 

permanent fiscal effort (SPB adjustment) in 2024 that would 
be required to stabilise public debt over the long term. It is 
complemented by the S1 fiscal sustainability gap indicator, 
which measures the permanent fiscal effort required in 2024 
to bring the debt-to-GDP ratio to 60% in the long term (by 
2070). For both the S1 and S2 indicators, the risk 
assessment depends on the amount of fiscal consolidation 
needed: ‘high risk’ if the required effort exceeds 6 pps. of 
GDP, ‘medium risk’ if it lies between 2 pps. and 6 pps. of 
GDP, and ‘low risk’ if the effort is negative or below 2 pps. of 
GDP. The overall long-term risk classification brings together 
the risk categories derived from S1 and S2. S1 may notch up 
the risk category derived from S2 when it signals a higher 
risk than S2. See the 2022 Debt Sustainability Monitor for 
further details. 

72 

 
                                                 
Table A21.1: Debt sustainability analysis - Ireland 

Source: Commission services. 

Table A21.2: Heat map of fiscal sustainability risks - Ireland 

Source: Commission services. 

73 

BaselineHistorical SPBLower SPBAdverse 'r-g'Financial stressOverallLOWLOWLOWLOWLOWLOWDebt level (2033), % GDP20.641.428.322.620.7Debt peak year20222022202220222022Fiscal consolidation space46%72%61%46%46%Probability of debt ratio exceeding in 2027 its 2022 level9%Difference between 90th and 10th percentiles (pps. GDP)28.4Source: European Commission (for further details on the Commission's multidimensional approach, see the 2022 Debt Sustainability Monitor)(1)Debtlevelin2033.Green:below60%ofGDP.Yellow:between60%and90%.Red:above90%.(2)Thedebtpeakyearindicateswhetherdebtisprojectedtoincreaseoveralloverthenextdecade.Green:debtpeaksearly.Yellow:peaktowardsthemiddleoftheprojectionperiod.Red:latepeak.(3)Fiscalconsolidationspacemeasurestheshareofpastfiscalpositionsinthecountrythatweremorestringentthantheoneassumedinthebaseline.Green:highvalue,i.e.theassumedfiscalpositionisplausiblebyhistoricalstandardsandleavesroomforcorrectivemeasuresifneeded.Yellow:intermediate.Red:low.(4)Probabilityofdebtratioexceedingin2027its2022level.Green:lowprobability.Yellow:intermediate.Red:high(alsoreflectingtheinitialdebtlevel).(5)Thedifference between the 90th and 10th percentiles measures uncertainty, based on the debt distribution under 2000 different shocks. Green, yellow and red cells indicate increasing uncertainty.Short termMedium term - Debt sustainability analysis (DSA)Long termOverall                               (S0)Overall Deterministic scenariosStochastic projectionsS2S1Overall(S1 + S2)LOWLOWMEDIUMLOWMEDIUMTable 1. Baseline debt projections20202021202220232024202520262027202820292030203120322033Gross debt ratio (% of GDP)58.455.444.740.438.334.030.728.226.024.222.821.721.120.6Changes in the ratio1.4-3.1-10.7-4.3-2.2-4.3-3.3-2.5-2.2-1.8-1.4-1.0-0.7-0.5of whichPrimary deficit4.00.8-2.2-2.3-2.8-2.2-1.7-1.1-0.9-0.7-0.6-0.4-0.2-0.1Snowball effect-1.4-6.6-7.8-3.6-2.3-2.0-1.6-1.4-1.3-1.1-0.8-0.6-0.4-0.4Stock-flow adjustments-1.12.7-0.71.62.90.00.00.00.00.00.00.00.00.0Gross financing needs (% of GDP)12.15.83.44.14.32.82.72.32.32.32.12.52.62.7S1S2Overall index  (pps. of GDP)1.03.4of which Initial budgetary position-2.0-1.5Debt requirement-0.5Ageing costs3.54.9of which    Pensions1.92.3     Health care0.81.2     Long-term care0.91.6Others-0.1-0.1Table 2. Breakdown of the S1 and S2 sustainability gap indicators01020304050607020202021202220232024202520262027202820292030203120322033Graph 1. Deterministic debt projections Historical SPB scenarioLower SPB scenarioFinancial stress scenarioAdverse 'r-g' scenarioBaseline% of GDPp10p20p40p60p80p9001020304050607020202021202220232024202520262027% of GDPGraph 2. Stochastic debt projections 2023-2027MedianBaseline