COMMISSION STAFF WORKING DOCUMENT 2025 Country Report - Ireland Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Ireland
Date: 2025-06-04
Institutions: European Commission, Reform and Investment Task Force
Subjects: Ireland, budget policy, economic policy, economic recovery, economic reform, employment policy, energy policy, housing policy, social policy, stability pact

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 4.6.2025  SWD(2025) 207 final  COMMISSION STAFF WORKING DOCUMENT 2025 Country Report - Ireland Accompanying the document Recommendation for a COUNCIL RECOMMENDATION  on the economic, social, employment, structural and budgetary policies of Ireland {COM(2025) 207 final}  
 
 
 
 
 
 
ECONOMIC DEVELOPMENTS AND KEY POLICY 
CHALLENGES 

the 

sectors. 

recovery 

‘windfall’ 

reflecting 

high  surplus  of  4.3%  of  GDP  (estimated  at 
7.4%  of  GNI* (1)),  largely  driven  by  one-off 
transfers  arising  from  the  Court  of  Justice  of 
the  European Union  ruling  on  the  ‘Apple  case’ 
(EUR 14.1 billion). Strong government revenue 
growth was also supported by growth in direct 
tax 
in 
receipts, 
in  both  domestic  and 
economic  activity 
the 
However, 
multinational 
government  balance  continues  to  be  inflated 
by 
revenues 
corporation 
associated  with  multinationals,  i.e.  those  not 
explained  by  growth  in  domestic  economy 
activity.  The  budget  surplus  is  forecast  to 
recede  to  0.7%  of  GDP  in  2025  and  0.1%  of 
GDP  in  2026,  in  absence  of  the  one-off 
revenue  seen  in  2024  and  reflecting  high 
projected 
expenditure.  Gross 
government debt was 40.9% of GDP at end of 
2024  (equivalent  to  around  70%  of  GNI*), 
forecasted  to  fall  to  38.6%  in  2025,  and  to 
38.2% in 2026. 

levels  of 

tax 

2025, 

exceeding 

Net  expenditure  is  projected  to  grow 
strongly 
the 
in 
recommended  maximum. 
In  2024,  net 
expenditure (2)  in  Ireland  grew  by  8.2%  (see 
Annex  1).  This  increase  is  mainly  driven  by 
growth  in  public  sector  pay,  investment  and 
social  transfers  to  support  living  standards 
and the provision of public goods and services. 
The  increase  of  government  expenditure  was 
partially  offset  by  government  decisions  on 

(1)  Modified  gross  national 

(GNI*)  excludes 
globalisation effects and reflects the income standards 
of Irish residents more accurately than GDP. See Central 
Statistics Office, ‘modified GNI’ for more detail. 

income 

(2)  Net  expenditure  is  defined  in  Article 2(2)  of Regulation 
(EU)  2024/1263  as  government  expenditure  net  of 
interest  expenditure,  discretionary  revenue  measures, 
expenditure on programmes of the Union fully matched 
by  revenue  from  Union  funds,  national  expenditure  on 
co-financing  of  programmes  funded  by  the  Union, 
cyclical elements of unemployment benefit expenditure, 
and one-offs and other temporary measures. 

Balancing strong fundamentals 
and multinational uncertainty 

in 

pharmaceuticals,  while 

Headline  figures  indicate  solid  growth 
and  a 
resilient  domestic  economy. 
Ireland’s  real  GDP  recorded  an  increase  of 
1.2% in 2024. This was driven by a rebound in 
the  exports  of  multinational  enterprises, 
notably 
the 
computer  services  sector  maintained  steady 
growth.  To  gauge  domestic  economic  activity 
in  Ireland,  modified  domestic  demand  is  a 
better  measure.  This  increased  by  2.7%  in 
2024,  supported  by  a  strong  labour  market 
and  easing  of  inflationary  pressures.  Looking 
ahead,  GDP  is  expected  to  grow  by  3.4%  in 
2025  and  2.5% 
in  2026,  supported  by 
continued  export  growth  and  a  strong 
domestic economy. 

remains 

labour  market 

tight. 
The 
Employment reached an all-time high in 2024, 
supported  by  a  growing  labour  supply.  This 
was  driven  largely  by  high  inward  migration 
and increased labour market participation. The 
unemployment  rate  remained  low  at  4.4%  in 
the  first  quarter  of  the  year  (see    Annex  13) 
and  is  expected  to  remain  low  in  the  coming 
rates  have  been 
years.  While  vacancy 
gradually  declining  since  2022,  they  remain 
above  their  long-term  average,  with  half  of 
small  and  medium-sized  enterprises  (SMEs) 
in  recruiting  skilled 
identifying  difficulties 
workers  as  their  biggest  challenge.  This  issue 
is  widespread  across  sectors  but  particularly 
construction  and  green 
problematic 
the  much-needed 
industries, 
expansion  of 
(see 
infrastructure 
Annex 12). 

in 
hindering 

Ireland’s 

Ireland’s  public  finances  are  in  a  strong 
headline  position. 
Ireland’s 
government  balance  reached  an  unusually 

In  2024, 

2 

 
 
 
Ireland  particularly  sensitive  to  shifts  in  US 
trade  policy.  Medical  and  pharmaceutical 
products,  which  make  up  a  large  majority  of 
these  exports,  face  additional  risks  from 
potential  targeting  of  the  sector.  The  possible 
relocation  of  the  highly  mobile  intellectual 
property  assets  held  in  Ireland  also  poses  a 
risk  to  value  added,  exports  and  tax  revenue. 
The  labour  market  could  also  be  impacted  as 
US multinationals are a key  driver of demand 
for 
employing 
approximately  10%  of  Ireland’s  employees. 
long-term 
Despite  the  risky  outlook,  the 
multinational  investments  in  Ireland  are  likely 
to underpin trade and investment ties even in 
the coming years. The prospects for expanding 
production  and  attracting  new  investors  will 
hinge  on  the  capacity  to  tackle  infrastructure 
deficits. 

high-skilled 

labour, 

Graph 1.1: Value of exports to the US (% of 
current GDP, 2024) 

Source: Eurostat 

The  Irish  financial  sector  remains  stable, 
though  some  risks  persist.  The  financial 
institutions  in  Ireland  fall  into  two  categories: 
those  with  an  international  focus  and  those 
Irish  businesses  and  households. 
serving 
Domestic banks have adequate capital buffers, 
ensuring strong loss-absorbing capacity, as the 
Central  Bank  enforces  strict  loan-to-income 
loan-to-value  rules.  The  exposure  of 
and 
Internationally-oriented  investment  banks  to 
the  domestic  economy 
limited,  but 
vulnerabilities  arise  from  the  high  share  of 
non-bank lending to SMEs and the commercial 
real  estate  market.  However,  Ireland  is  at  the 
forefront  of  developing  a  macroprudential 
framework  for  continuous  monitoring  of  the 
non-bank sector. 

is 

fiscal  measures  increasing  revenues. In  2025, 
net expenditure is forecast by the Commission 
to grow by 6.7%, which is above the maximum 
growth  rate  recommended  by  the  Council  (3). 
The cumulative growth rate of net expenditure 
in 2024 and 2025 taken together is projected 
at  15.5%,  which  is  above  the  maximum  rate 
recommended by the Council.  

Geopolitical turbulence creates 
risks 

Multinationals  are  a  key  driver  of 
Ireland’s  economy,  but  reliance  on  them 
brings  uncertainty. 
Ireland’s  attractive 
business  environment,  access  to  the  EU 
market,  skilled  workforce  and  established 
industry  clusters  have  drawn  numerous 
multinationals  to  Ireland.  These  firms  have 
supported Ireland’s strong economic growth in 
the  past  decade,  contributing  considerably  to 
exports,  investment,  employment,  and  tax 
revenues. As a result, Ireland’s productivity has 
risen by 50% in the past decade, now ranking 
in  the  EU.  However, 
among  the  highest 
innovation  and  productivity  spillovers 
to 
domestic  industries  remain  limited,  with  local 
firms  lagging  behind  both  multinationals  and 
top-performing  EU  countries  (see  Section  2). 
This  concentration  of  economic  activity  in  a 
few  multinational-dominated  sectors,  leaves 
Ireland’s  economy  sensitive  to  sector-specific 
disruptions or firm-level shocks. 

in 

for 

The  concentration  and  openness  of  the 
economy  makes 
Ireland  particularly 
the 
to  developments 
sensitive 
international  environment.  The  growth 
outlook 
Irish  economy  will  be 
influenced  by  developments  in  US  policy,  the 
effects  of  which  remain  highly  uncertain  and 
very  dynamic.  One 
Ireland’s 
merchandise  exports  -  equivalent  to  around 
14%  of  its  GDP  -  is  directed  to  the  US,  the 
highest in the EU (see Graph 1.1). This makes 

third  of 

the 

(3)  Council  Recommendation  of  21  January  2025 
endorsing  the  national  medium-term  fiscal-structural 
plan  of  Ireland  (OJ  C,  C/2025/667,  10.2.2025,  ELI: 
http://data.europa.eu/eli/C/2025/667/oj). 

3 

0%2%4%6%8%10%12%14%16%IrelandBelgiumNetherlandsGermanySlovakiaAustriaEU-27ItalySwedenFinlandHungaryLithuaniaDenmarkCzechiaPortugalEstoniaFranceSloveniaPolandLatviaMaltaSpainBulgariaGreeceCroatiaRomaniaLuxembourgCyprus 
 
      
Box 1: 

UN Sustainable Development Goals (SDGs) 

Ireland  is  performing  well  in  all  SDGs  related  to  macroeconomic  stability  and 
productivity (SDGs 8 and 16) and fairness (SDGs 3, 4, 10) but is moving away from the 
targets for some SDGs related to environmental sustainability (SDGs 6, 11, 15). 

Although it shows signs of catching up, Ireland is far below the EU average on climate 
action (SDG 13) due to the high net greenhouse gas emissions per capita and persistent 
emissions from the land use and forestry sector (see Annex 7). 

Reforms and investments will be 
key for the green transition 

Housing shortages persist 

the 

indicate 

Ireland  is  not  yet  on  track  to  meet  its 
2030  targets.  Ireland  has  enacted  a  strong 
climate action framework outlining the road to 
Irish  economy. 
decarbonisation  of 
However,  recent  projections 
that 
Ireland  is  not  on  track  to  deliver  on  these 
targets,  with  only  a  modest  reduction  in 
emissions, partly due to the continued increase 
in  land-use  emissions.  Ireland  is  progressing 
with  deploying  renewable  energy  and  energy 
retrofit 
efficiency 
measures.  However,  this  is  still  too  slow  to 
attain  the  national  targets  for  2030  and  is 
held  back  by  bottlenecks  in  implementation 
(see Section 3). 

improvements 

through 

in 

demand. 

Slow  implementation  of  infrastructure 
investments  hinders  progress  across 
the 
sectors.  Constraints 
multiple 
electricity  grid  hinder 
renewable  energy 
deployment,  while  energy  efficiency  efforts 
are  hampered  by  an  insufficient  pace  for 
building  retrofits  and  increases  in  the  overall 
energy 
charging 
infrastructure  for  electric  vehicles  further 
complicates the transition to cleaner transport. 
Outdated water infrastructure and  investment 
deficits  threaten  environmental  status  and 
discourage  expansion  of  economic  activities 
dependent  on  accessible  water  resources. 
Progress in the circular economy, especially in 
construction,  has  also  been  slower  than 
required (see Section 3). 

Insufficient 

Lack  of  affordable  housing  affects 
Ireland’s  competitiveness  and  social 
stability. In the decade up  to 2023, Ireland’s 
population  grew  by  an  average  of  1.3% 
annually – outpacing the EU average of 0.2%. 
Construction of new dwellings has struggled to 
keep  up,  partly  due  to  the  planning  process, 
labour constraints, rising cost of materials, and 
low  productivity  in  the  construction  sector. 
Furthermore,  key  infrastructure  constraints, 
such as shortcomings in electricity grid, water 
management  and  other  essential  services, 
limit the pace and scale of new developments. 
This has led to worsening housing affordability 
(see  Annex  9).  Price-to-income  levels  are 
currently  the  highest  in  the  EU,  which  limits 
firms’  ability,  particularly  SMEs,  to  attract 
skilled  workers,  and  puts  pressure  on  wages. 
The  share  of  employed  adults  aged  18-34 
in 
living  with  their  parents  has  doubled 
10 years  to  42%  (see  Section  4).  In  addition, 
decreased  affordability  and  availability  of 
rents  have  contributed  to  a  rapid  increase  in 
homelessness. (see Section 4). 

Fiscal rigour is warranted in light 
of vulnerabilities 

Several  risks  weigh  on  the  outlook  for 
public  finances.  It  is  uncertain  whether  high 
tax  revenues  can  be  sustained  considering 
their  strong  concentration  and  exposure  to 
geopolitical  developments.  Corporate 
tax 
receipts,  which  have  more  than  doubled  since 

4 

 
 
2019  and  represented  27%  of  total  tax 
revenue in 2024, are particularly concentrated, 
with a large share paid by relatively few large 
multinational companies. Moreover, half of the 
‘windfall’. 
receipts  are  estimated 
Significant  underlying  fiscal  pressures  include 
rising  costs  of  ageing  and  large  investment 
needs 
rapid  population 
growth and the green transition. 

to  accommodate 

to  be 

Strict  fiscal  discipline  is  necessary  to 
contain the growth in current expenditure 
including 
and  avoid  budget  overruns, 
improvements  in  public  spending  efficiency 
(see  Box 2).  Public  pension  spending 
in 
particular is projected to rise significantly (see 
Annex 1).  To  address  the  underlying  risks  and 
strengthen the resilience of its public finances 
to external shocks, Ireland would benefit from 
diversifying its tax mix and broadening its tax 
base to ensure more reliable tax revenues (see 
Section 2). 

exceeds 

relatively 

recurrently 

The healthcare system in particular faces 
young 
pressures.  Despite  a 
population,  Ireland’s  health  expenditure 
is 
above the EU average, and its total healthcare 
budgeted 
spending 
amounts. Currently the system is overly reliant 
on  costly  hospital  care,  which  is  exacerbated 
by the lack of universal primary care coverage. 
The healthcare system needs to become more 
its 
to 
cost-effective 
fiscal 
sustainability, 
demographic 
considering 
pressures  and  government  plans  to  reduce 
patient  costs.  While  Ireland  has  committed  to 
implementing  a  range  of  cost-saving  and 
productivity  measures 
via  a  dedicated 
taskforce  (see  Annex  1),  there  is  room  for 
further  reform  to  alleviate  the  strain  on 
hospitals (see Section 4). 

ensure 

5 

 
 
Box 2: 

Barriers to private and public investment 

Ireland’s  private  investment  landscape  is  shaped  by  unique  structural  factors.  While  aggregate 
investment figures appear strong due to the presence of multinational corporations, domestic firms 
invest  at  lower  level  than  their  European  counterparts  (see  Section  2).  Several  barriers 
contribute to this disparity: 

• 

Infrastructure  deficits.  Persistent  gaps,  including  planning,  in  essential  infrastructure  – 
particularly in housing, transport, electricity and water - hamper economic growth and deter 
investment. 

•  Labour and skills shortages. Around 80% of Irish companies cite the shortfall in labour 

or skills as a significant obstacle to investment. 

•  High costs of doing business. High energy costs and interest rates, elevated wages, and 
expensive  housing  place  considerable  financial  strain  on  businesses  and  undercut  their 
ability to invest. 

Ireland  has  introduced  good  processes  for  strategically  planning,  prioritising  and 
monitoring  public  investments,  yet  implementation  is  lagging.  Ireland’s  vision  for  the 
country's long-term development is coordinated across government levels and includes measurable 
objectives within a fiscal constraint. Standardised requirements for the evaluation and selection of 
public investment projects apply widely, including private bodies receiving exchequer capital funding. 
However,  the  implementation  phase  of  these  projects  -  which  starts  with  permit  planning  -  is 
significantly  hampered  by  capacity  constraints  at  lower  levels  of  government  (see  section  on 
innovation). Monitoring of outcomes has been facilitated through data transparency and digitalisation 
(see Annex 12), but some barriers to efficient public spending remain: 

•  Shortcomings in capital budgeting. While the National Development Plan includes five-
year  capital  allocations  and  overall  ten-year  expenditure  ceilings,  the  allocations  are 
indicative  and  budgeting  for  major  projects  is  done  on  a  yearly  basis.  This  limits  the 
efficiency and the achieved value-for-money of public spending, as well as the predictability 
of future investment levels. 

•  Little  transparency  of  maintenance  needs.  There  is  no  standard  methodology  for 
estimating  maintenance  costs  of  public  investments  in  Ireland,  either  at  planning  or 
budgeting stages, which are critical for sustainable service delivery. Moreover, Ireland does 
not maintain a central register of infrastructure assets. 

The implementation of the RRP is well underway. At present, Ireland has fulfilled 34% of milestones 
and targets in its RRP. 

It remains important to accelerate the implementation of cohesion policy programmes. The mid-term 
review offers opportunities to speed up progress and better address EU strategic priorities related to 
competitiveness, defence, housing, water resilience and the energy transition. 

Ireland has not yet taken advantage of the opportunities provided by the Strategic Technologies for 
Europe  Platform  under  Cohesion  Policy  and  the  Recovery  and  Resilience  Facility  to  reallocate 
resources  towards  this  priority.  However,  Ireland  can  still  seize  these  opportunities  to  support  the 
development  or  manufacturing  of  critical  technologies  in  the  areas  of digital  and deep  tech, clean 
and resource efficient technologies, and biotechnologies. 

6 

 
 
 
INNOVATION, BUSINESS ENVIRONMENT AND 
PRODUCTIVITY 

Narrowing the productivity gap of 
Irish firms 

Headline  productivity  masks  divergent 
economic  performance.  While 
Ireland 
maintains strong overall productivity – ranking 
among  the  highest  in  the  EU  -  this  is  largely 
driven by a small number of multinationals. In 
contrast,  domestic  firms 
lag  behind  both 
foreign-owned  companies and  their  euro  area 
counterparts.  As  domestic-owned  enterprises 
make  up  97%  of  all  businesses  and  employ 
around 75% of the labour force, low levels of 
productivity  will  hinder  the  prosperity  and 
resilience  of  the  economy  and  overall  living 
standards.  Most  of  these  domestic  firms  are 
small  and  medium-sized  enterprises  (SMEs), 
which face specific barriers to growth. Closing 
this  productivity  gap  will  require  targeted 
efforts  to  address  these  challenges  while 
maintaining  a  strong  business  environment 
which  requires  addressing  underinvestment 
and  infrastructure  deficits  and  having  stable 
public finances. 

evident 

The divergent economic performance also 
affects  regional  development.  Disparities 
are 
hosting 
multinationals (in and around Dublin and Cork) 
and  regions  dominated  by  Irish-owned  SMEs, 
which  are  lagging  in  productivity,  innovation 
and competitiveness (see Annex 17). 

between 

regions 

and 

Labour market constraints, high business 
costs 
international 
limited 
engagement  hinder  SME  growth  and 
productivity.  Irish-owned  firms  invest  less 
compared  to  their  EU  counterparts,  limiting 
their capacity  to innovate and expand. Labour 
to  pose 
and 
challenges,  with  Irish-owned  firms  having  to 
compete  with  larger  multinationals  to  attract 
and  retain  talent.  As  these  firms  are  more 

shortages 

continue 

skill 

in 

are 

particularly 
they 
labour-intensive, 
vulnerable to pay pressures and rising indirect 
costs, such as housing. Credit costs and energy 
costs  are  also  higher 
Ireland  when 
the  EU  average,  creating 
to 
compared 
additional  barriers  to  investment.  Moreover, 
Irish  SMEs  are  less  internationally  engaged 
than their EU counterparts, with two thirds not 
in  exporting.  This  restricts  their 
involved 
expansion  within  the  single  market  and  limits 
their growth potential. 

Fund 

legislation 

considerable  scope 

Ireland is developing national policies and 
leveraging  EU  funding  to  support  SME 
innovation.  OECD 
competitiveness  and 
indicators  show 
for 
improving  the  set  up  for  public  consultation, 
regulatory  impact  assessments  and  ex post 
evaluation  of 
(See  Annex  4). 
Meanwhile,  Ireland  has  introduced  an  ‘SME 
test’  which  requires  government  departments 
to assess the burden of any new regulation on 
SMEs;  a  measure  supported  by  the  Recovery 
and Resilience Facility. The European Regional 
regional 
Development 
innovation  by  strengthening 
‘technological 
universities’  while  the  Digital  Transition  Fund 
provides targeted funding to help SMEs adopt 
new  technology  and  improve  supply  chain 
efficiency. Ireland is also promoting innovation 
through four European digital innovation hubs, 
also  financed  by  the  Recovery  and  Resilience 
Facility  and  the  Digital  Europe  programme, 
giving  businesses  access  to  expertise  and 
advanced 
new 
government  programme  contains  several 
important  initiatives  focusing  on  SMEs  and 
overall 
the 
publication  of  a  whole-of-government  action 
plan for competitiveness and productivity. 

competitiveness, 

technologies. 

including 

supports 

Ireland’s 

Stronger  knowledge  and 
innovation 
diffusion,  financial  and  skill  support  and 
cost  reduction  can  boost  productivity 
within 
labour 
productivity  divergence  occurs  within  sector, 

firms.  As  most 

local 

7 

 
 
transfer, 

policies can encourage stronger links between 
domestic  firms,  research 
institutions  and 
multinationals.  Strengthening  incentives  for 
knowledge 
innovation  and  R&D 
partnerships  and  labour  mobility  could  make 
domestic  firms  more  productive.  Expanding 
access  to  finance  and  expertise  –  particularly 
through  greater  uptake  of  existing  schemes 
such  as  those  offered  by  Enterprise  Ireland  - 
could  further  increase  domestic  productivity. 
Addressing  cost-related  barriers,  such  as  high 
legal  and  insurance  fees,  would  also  help 
smaller firms compete more effectively. 

Boosting  R&D  expenditure  and  providing 
targeted  R&I  support  could  help  boost 
SME  productivity.  Ireland’s  R&D  expenditure 
remains  below  the  EU  average.  Public  R&D 
spending accounts for only 0.2% of GDP (0.4% 
of GNI*), making it one of the lowest in the EU. 
Moreover,  there  is  a  noticeable  technology 
innovation  gap  between  Irish  SMEs  and  their 
counterparts  in  comparable  EU  countries (4). 
Currently,  a  significant  portion  of  public 
support  is  channelled  through  the  R&D  tax 
credit.  While  this  plays  a  key  role  in  driving 
firm-level  R&D investment,  it might not be as 
effective  for  start-ups  and  innovative  young 
firms  in  emerging  sectors (5).  Adjustments  to 
outsourcing  rules  and  eligibility  criteria  could 
encourage  greater  SME  participation  in  the 
R&D  tax  credit.  However,  increased  direct 
funding  for  R&I  would  provide  stronger 
support for SMEs and start-ups, allowing them 
to  contribute  to,  and  benefit  from,  the  wider 
economic ecosystem. Additionally,  an increase 
in  public  R&D  investment  would  enhance 
Ireland’s  overall 
innovation  capacity  and 
economic  resilience  and  support  scientific 
excellence. 

Boosting housing supply 

Housing  costs  remain  high  for  both 
buyers  and  renters.  Between  2014  and 
2024, house prices grew more than borrowing 
capacity by  around 40%. The share of rent to 
disposable  household  income  has  increased 
from  18.8%  in  2018  to  23.3%  in  2023 
compared to the EU average of 22.5%. 

last  decade  and  high 

is  the  product  of 
Low  affordability 
significant  lack  of  housing  supply  over 
the 
inward 
migration. In the wake of the financial crisis, 
most  construction  firms  went  bankrupt.  This 
prompted  many  foreign  construction  workers 
to  emigrate  and  made  construction  an 
unappealing  career  path  for  many  young 
people.  Consequently,  the  capacity  of  the 
construction  sector  was  dismantled.  However, 
from  2014  onwards, 
strong  economic 
performance  and  job  creation  drove  rapid 
inward  migration.  The  housing  stock  fell  from 
434  units  per  1 000  adults  in  2011  to  409 
units in  2021,  well  below most  EU  peers (see 
graph  4.1).  While  housing  completions  have 
been on the rise - new housing units built per 
thousand  population  are  now  the  highest  in 
the EU - the construction sector has struggled 
to  scale  up  beyond  30-33 000  units  annually 
in the last three years. This remains far below 
the  52 000  units  annually  needed  until  2050 
to  keep  up  with  population  growth  as 
estimated by the Central Bank of Ireland. 

Graph 2.1: Housing units per 1 000 population 
(including vacant units) 

(4)  Lawless, (2024), Hare or tortoise? Productivity and 

growth of Irish domestic firms. 

(5)  Department of Enterprise, Trade and Employment, 
(2022), National smart specialisation strategy for 
innovation 2022-2027. 

Source: Eurostat 

8 

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Box 1: 

Can the Irish construction sector respond to the scope and scale of housing demand? 

Housing  development  faces  obstacles  due  to  standalone  projects  and  regulatory  hurdles. 
Many  housing  developments  operate  as  standalone  projects,  reducing  opportunities  for  learning-by-
doing  and  economies  of  scale.  Varying  planning  requirements  can  also  create  hurdles  for  firms, 
particularly new or foreign entrants. 

To  meet  labour  demand  in  the  construction  sector,  it  is  essential  to  focus  on  cultivating  a 
skilled  and  mobile  workforce.  Certification  processes  that  provide  a  career  path  with  continuous 
upskilling  and  reskilling,  targeted  protection  from  (seasonal)  unemployment  and  streamlining  work 
permit procedures could help improve the supply of labour. 

Financial  constraints  can  limit  the  ability  of  small  firms  to  grow  and  innovate.  Many  micro-
firms focus on renovations rather than larger projects due to challenges in accessing finance for skills, 
materials,  and  capital  investment.  Strengthening  guarantee  schemes  for  builders  and  exploring 
cooperative models could unlock new opportunities for growth. 

The  sector  is  shaped  by  a  few  dominant  players,  with  entry  challenges  for  newcomers. 
Localised expertise, regulatory complexity, and market structure can make it difficult for foreign firms to 
establish a presence, potentially limiting competition and innovation. 

Multiple  reforms  have  been  launched  to 
increase  supply.  A  new  residential  zoned 
land  tax,  which  aims  to  dis-incentivise  land 
hoarding,  was  introduced  in  2024.  The  OECD 
has  recommended  that  this  tax  be  increased, 
as  its  current  rate  of  3%  may  be  too  low  to 
trigger additional housing by activating unused 
planning  permissions  on  undeveloped  land. 
The  government  has  also  been  actively 
pushing  construction  through  standardised 
designs  and  layouts  and  modern  methods  of 
construction to increase the productivity of the 
the 
construction 
government increased stamp duty on property 
(a tax to pay when property is transferred) for 
people who buy 10 or more residential houses 
in a year from 10% to 15%. 

sector. In Budget  2025, 

in 

labour 

shortages 

Value  for  money  is  a  concern  amid 
capacity  constraints.  Measures  supporting 
housing  demand  raise  inflationary  concerns 
considering 
the 
construction  sector  (where  unemployment  is 
below  1.5%)  and  large  parallel  construction 
needs in retrofitting. In this context, reviewing 
and targeting existing measures to assist with 
access  to  home  ownership  for  first-time 
buyers, recently extended until 2029, might be 
beneficial. 
OECD 
recommended,  phasing-out  the  recently  re-
introduced  mortgage  interest  relief  and  tax 
reliefs  and  credits  for  landlords  and  tenants, 
which are not targeted and may be regressive, 
might free resources for land servicing. 

Similarly, 

the 

as 

Rent  caps  have  shielded  some  existing 
tenants  but  might  need  to  be  reformed. 
Rent pressure zones were introduced in Ireland 
in  late  2016  to  cap  rent  increases  in  areas 
with  high  rental  inflation  to  the  maximum  of 
2%  or  the  harmonised  index  of  consumer 
prices.  By  2024,  82.6%  of  private  tenancies 
were  in  these  zones.  While  evidence  shows 
that  these  zones  have  been  successful  in 
decreasing  rental  price  inflation,  they  have 
likely  contributed  to  a  slowdown  of  private 
investment  in  rental  stock.  A  comprehensive 
review  by  the  Housing  Agency  to  consider  if 
rent  pressure  zones  should  be  continued, 
removed, modified or replaced is ongoing. 

Streamlining the planning process 

Planning permission needs to improve for 
the  business  environment  to  remain 
attractive  for  private  investment.  The 
planning  permission  process  can  take  up  to 
24-36 months, in spite of Ireland having put in 
fast-track  planning  permission 
place  a 
strategic 
known 
process, 
granting 
infrastructure  development, 
strategic 
energy  infrastructure  projects.  Uncertainty  in 
the  planning  process  is  also  seen  as  a  main 
barrier for housing. 

as 
for 

9 

 
 
A  key  piece  of  legislation,  the  Planning 
and  Development  Act  2024,  passed  in 
October  2024.  This  906-page  act  aims  to 
streamline  planning,  clarify  legal  procedures, 
re-
increase  administrative  capacity  and 
structure  the  planning  board.  While  the  direct 
impacts  of  the  legislation  are  not  yet  known, 
calls  have  been  made  for  the  government  to 
publish secondary implementing regulations as 
soon  as  possible  and  to  be  ready  to  flexibly 
adapt them. 

Much  of  the  success  of  the  reform  will 
depend  on  providing 
local  planning 
offices  with  the  sufficient  resources  and 
expertise.  A  recent  OECD  report  highlighted 
that  in  Ireland’s  common  law-based  system, 
different  interpretations  of  the  law  by  courts 
may set precedents that could potentially lead 
in  directions  not  necessarily  foreseen  by  the 
legislator (6).  Amidst  these  uncertainties,  local 
planning  offices  will  need  to  effectively  exert 
their gatekeeping role  to reduce the necessity 
for judicial review, which has been a recurrent 
bottleneck  in  recent  years  in  Ireland  very 
expensive  justice  system.  A  new  ministerial 
action  plan  ensuring  a  sustainable  pipeline  of 
planning  and  related  expertise  was  published 
in  October  2024.  The  OECD  highlighted  that 
this should be accompanied by a centralisation 
of legal and technical skills – especially in the 
field  of  environmental  assessment  –  as  well 
as  sufficient  training  modules.  There  is  also 
scope to explore the potential of using AI and 
other data and digitalisation tools for planning 
to  handle  applications  more 
authorities 
efficiently and effectively. 

A  review  of  the  national  planning 
is  underway.  The  national 
framework 
planning framework guides high-level strategic 
planning and development of local and county 
development plans and local authority climate 
action  plans  to  mandated  national  targets. 
Once  the  review  has  been  completed,  results 
hinge  on  the  framework  quickly  cascading  to 
lower  levels  of  government  and  counties 
providing  sufficient  zoned  and  serviced  areas 
for  the  different  needs.  The  high-level  vision, 
however,  is  insufficiently  reflected  in  policies 

line  ministry  level  which  hampers 

at 
effectiveness. 

its 

Mitigating fiscal risks to secure 
long-term stability 

by 

largest 

just  10 

multinational 

companies 
Foreign 
generate  a 
large  proportion  of  tax 
revenues,  exposing  Ireland’s  budget  to  a 
range  of  external  risks.  Corporate  tax 
receipts  are  particularly  concentrated  and 
volatile, with 88% attributed to foreign-owned 
multinationals  in  2024  and  more  than  half 
companies. 
paid 
International developments such as changes in 
US  trade  and  tax  policy  or  the  global  tax 
environment  could  significantly  impact  tax 
revenues. A scenario analysis produced by the 
authorities 
reversal  of 
corporate  tax  receipts  to  2020  levels  would 
result  in  a  EUR 15  billion  deficit  on  a  general 
government  basis  by  2030 (7).  Foreign-owned 
multinationals have also generated more than 
30%  of 
(including 
tax 
Universal  Social  Charge  receipts)  and  around 
34% of VAT revenue in 2023. 

indicated 

revenue 

that  a 

income 

third  of 

Ireland’s  labour  tax  system  is  highly 
progressive, but it relies on a narrow tax 
base. The top 10% of taxpayers accounted for 
approximately  60%  of  the  tax  yield  in  2022, 
while  one 
income  earners  are 
estimated  not  to  pay  any  income  tax.  Such 
concentration highlights the high progressivity 
of the tax system, however it also points to a 
vulnerability  of  this  tax  base  to  economic 
shifts.  The  labour  tax  revenues  are  also  well 
below  the  EU  average (see  Annex  2).  To  cope 
with 
expenses, 
diversification 
Ireland’s  public  revenue 
structure is warranted. 

projected 

budget 

high 

in 

Ireland  has  taken  steps  to  safeguard  its 
fiscal  position.  In  2024,  Ireland  established 
two new funds designed to absorb part of the 
windfall  corporate  tax  receipts:  the  Future 

(6)  OECD (2025) Economic Survey of Ireland. 

Structural Plan. 

(7)  Department of Finance (2024) Medium-Term Fiscal and 

10 

 
 
 
adjustments  to  the  tax  credit  system  could 
Ireland  to  raise  revenue  for  more 
allow 
targeted  support  to  those 
in  need,  any 
potential  income  tax  reform  should  take  into 
account its distributional effects as well as the 
impact  on  work  incentives.  To  ensure  this,  a 
comprehensive  and  integrated  view  on  the 
combined  tax  and  benefit  system  is  needed. 
There  is  also  room  to  expand  environmental 
taxation, the  level  of  which  is  currently  below 
the  EU  average  (see  Annex  2).  This  concerns 
pollution and resources taxes in particular. 

income 

inflation. Based on Irish data, the complete removal of 
tax  credits  could  increase  government  revenues  from 
personal 
insurance 
taxes  and 
contributions  by  up  to  19.8%.  However,  it  could  also 
increase  the  at-risk-of-poverty  rate  by  up  to  4.1 
percentage points. The simulations underscore the need 
for  a  carefully  calibrated  approach  to  adjustments  in 
taxes and benefits. 

social 

changes 

structural  economic 

Ireland  Fund  and  the  Infrastructure,  Climate 
and  Nature  Fund.  While  the  Future  Ireland 
Fund’s objective is to mitigate budgetary risks 
from 
like 
population  ageing  from  2041  onwards,  the 
Infrastructure,  Climate  and  Nature  Fund  can 
support capital spending already from 2026 if 
Ireland’s  fiscal  position  deteriorates.  Several 
tax measures have been introduced, mainly to 
induce  behavioural  change,  including  via  local 
property  taxes  and  multiannual  increases  to 
the  carbon  tax  until  2030.  To  address  the 
fiscal  sustainability  of  the  pension  system, 
Ireland introduced incremental increases in the 
pay-related  social  insurance  rate  until  2028, 
but  further  measures  may  be  needed  as  of 
2029.  Furthermore,  Ireland’s  new  legislation 
against aggressive tax planning took effect in 
2024,  which  implemented  outbound  payment 
defensive  measures. 
has  also 
committed to monitoring its implementation to 
prevent non-taxation (see Annex 2). 

Ireland 

There  is  room  for  further  diversification 
in  the  tax  mix  and  base  broadening. 
Recommendations  of  the  2022  report  from 
the  Commission  on  Taxation  and  Welfare 
provide  useful  guidelines,  including  increasing 
the overall yield from wealth and capital taxes. 
For  instance,  there  is  scope  for  a  potential 
expansion  of  recurring  local  property  taxes, 
receipts  of  which  (1.8%  of  GNI*  in  2022)  are 
below the EU average (2.1% of GDP in 2022). 
A recent OECD report has proposed reforms to 
the income tax and VAT as further possibilities 
for  base  broadening,  in  addition  to  property 
taxes (8). Indeed, recent simulations show that 
reduced  VAT  rates  decrease  Ireland’s  VAT 
revenue by around 15% and do not contribute 
to  redistribution,  making  them  an  inefficient 
tool  for supporting low-income households (9). 
Similarly,  the  personal  income  tax  scheme 
contains  several  tax  credits  that  reduce  tax 
revenue from personal income taxation with a 
(10).  While 
mixed 

redistributive 

impact 

(8)  OECD (2025) Economic Survey of Ireland. 

(9)  European Commission (2024) Tax Expenditures in the 

EU: Recent Trends & New Policy Challenges. 

(10)  The European Commission’s Joint Research Centre uses 
the  EUROMOD  tax-benefit  microsimulation  model  to 
evaluate  the  impact of  fiscal  adjustments  such  as  the 
removal  of  tax  credits  and/or  their  indexation  to 

11 

 
 
 
 
DECARBONISATION, ENERGY AFFORDABILITY AND 
SUSTAINABILITY 

Accelerating climate action 

Powering an affordable and low-
carbon future 

reached 

Ireland’s 

consumers 

competitiveness 

Accelerating  deployment  of  renewable 
electricity  can  help  alleviate  price 
is 
pressure. 
hindered  by  lacking  renewables  deployment 
and  infrastructure,  which  in  turn  creates  high 
and volatile energy prices. Electricity prices for 
369.9 
household 
EUR/MWh  in  the  second  half  of  2024,  as 
compared  to  the  EU  average  of  287.2 
EUR/MWh (12). This affects not only households 
but  also  threatens  business  viability  and 
future  investments.  With  average  retail  prices 
of 255.2 EUR/MWh in the second half of 2024 
for  non-household  consumers,  retail  prices  in 
Ireland far surpassed the EU average of 189.9 
EUR/MWh and remains amongst the highest in 
the EU (see Annex 8). Ireland could take steps 
to tackle the underlying cost drivers to ensure 
that electricity prices will not become a barrier 
to economic growth. 

An ambitious policy framework to reduce 
greenhouse  gas  (GHG)  emissions  is  in 
place.  The  Climate  Action  and  Low  Carbon 
Development  (Amendment)  Bill  2021  set  a 
binding  target  to  cut  emissions  by  51%  by 
2030  (compared  to  2018  levels)  and  to 
achieve  climate  neutrality  by  2050,  aligning 
Ireland  with  the  European  Climate  Law  and 
broader EU commitments to reduce emissions. 
Ireland  has 
carbon  budgets 
spanning 
three  five-year  periods,  setting 
sectoral  emissions  reduction  targets.  The 
annual  climate  action  plans 
this 
strategy,  by  defining  the  key  actions  and 
measures to be undertaken for reaching these 
targets. 

introduced 

refine 

However,  the  gap  between  ambition  and 
implementation 
remains  a  pressing 
challenge. In line with the EU's Effort Sharing 
Regulation (ESR), Ireland aims to cut emissions 
in  sectors  like  transport  (excluding  aviation), 
industry,  and 
buildings,  agriculture,  small 
waste  by  42%  in  2030  compared  to  2005. 
Despite a 6.8% decline in overall emissions in 
the 
2023, 
latest  projections 
(EPA) 
Protection 
Environmental 
indicate  that  Ireland  would  exceed  its  2030 
emissions limits under the ESR. A recent report 
by  the  Irish  fiscal  advisory  council  and  the 
climate  change  advisory  council  warns  that, 
without new policies, emissions could be 57% 
higher 
target,  and  even  with 
additional  measures,  they  could  still  be  28% 
above the limit (11). 

Agency 

from 

than 

the 

the 

(11)  Irish Fiscal Advisory Council & Climate Change Advisory 

Council (2025) A colossal missed opportunity. 

(12)  Eurostat (2025) Electricity Price Statistics 

12 

 
 
 
 
Graph 3.1: Non-household electricity prices 
including taxes and levies 

Graph 3.2: Forecasts of plausible rates of 
generation technology deployment 

Source: Sustainable Energy Authority of Ireland (SEAI) 

H1: First half of the year; H2: Second half of the year. 
Box plots show five summary statistics: minimum, 25th 
percentile, median, 75th percentile, and maximum. 
Consumption from 500 megawatt-hours to 1 999 
megawatt-hours – band IC 
Source: Eurostat 

reach  more 

Despite  significant  progress,  the  pace  of 
solar  and  wind  energy  expansion 
is 
insufficient  to  meet  national  targets. 
Ireland  has  plans 
than 
to 
10 gigawatts  (GW)  of  installed  wind  capacity 
in 2030 (compared to around 5 GW in 2023), 
of  which  more  than  5  GW  will  be  offshore  (0 
GW in 2023). Ireland is also advancing in solar 
photovoltaics deployment and has enacted an 
ambitious goal of 8 GW increase in capacity of 
solar  energy  sources  by  2030.  Installed  solar 
capacity  increased  by  150%  to  a  total  of 
738 megawatts  (MW)  in  2023,  while  installed 
wind  capacity  exceeded  4 800  MW.  However, 
Ireland's 
authority 
forecasts  that  Ireland  will  not  attain  the 
renewables  deployment  targets  (see  Graph 
3.1) (13).  Only  under  the  most  ambitious 
scenario  is  Ireland  projected  to  attain  the 
deployment targets for onshore wind and solar 
in 2030, with offshore wind projected to reach 
3.7  GW.  This  raises  the  need  for  accelerated 
investment and policy support. 

sustainable 

energy 

in 

recent  years. 

Persistent  capacity  constraints  for  the 
electricity  grid  infrastructure  limits  the 
deployment  of  additional  renewables.  In 
2023, nearly a tenth of wind and solar power 
could  not  be  distributed  through  the  grid  due 
to capacity constraints, and this has increased 
In  2023, 
significantly 
1 124 gigawatt-hours  (GWh)  of  wind  energy 
was  curtailed,  alongside  39  GWh  of  solar 
energy.  This  keeps  electricity  prices  high  (see 
Graph  3.2)  and  delays  the  transition  away 
from  fossil  fuels.  Part  of 
the  capacity 
constraints  could  be  alleviated  by  additional 
storage  capacity.  This  would  further  enhance 
grid  stability  and  energy  system  integration. 
Ireland  currently  employs  around  1  GW  of 
grid-scale  storage.  This  is made  up  of  around 
750 MW of battery storage and the remaining 
capacity  from  the  Turlough  Hill  pumped-
storage 
providing 
auxiliary  balancing  for  renewable  energy. 
Ireland  is  planning  for  a  1.7  GW  increase  in 
long-duration,  grid-scale  energy  storage  by 
2030. While behind-the-meter storage (14) has 
not  yet  seen  significant  uptake,  the  potential 
benefits are considerable. To enhance demand 
response  and  foster  a  market  for  flexibility 
solutions, 
Ireland  could  further  encourage 
behind-the-meter  energy  storage  for  end 
consumers  and  support  the  participation  of 
new  market  actors 
in  distributed  energy 
balancing and flexibility services. 

hydroelectric 

station, 

(13)  SEAI (2025) Decarbonised Electricity System Study. 

(14)  Behind-the-meter  battery  energy  storage  refers  to 
customer-sited  stationary  storage  systems  that  are 
connected to the distribution system on the customer's 
side of the utility's service meter, meaning it is used to 
power a home or business directly, rather than feeding 
into the grid. 

13 

050100150200250300350400EU averageIrelandEURper MWh0246810121420242025202620272028202920302024202520262027202820292030Onshore and offshore windSolar PVLow scenarioBest estimateHigh scenario2030 target 
   
 
     
 
There  is  a  need  for  increased  consumer 
participation 
in  energy  markets.  To 
achieve the 20-30% flexibility target set out in 
the  2023  Climate  Action  Plan,  the  national 
energy  demand  strategy  anticipates  greater 
participation  of  citizens  and  businesses in  the 
energy  market.  Incentives  for  the  creation  of 
energy communities could empower citizens to 
drive the energy transition locally and directly 
benefit  from  increased  energy  efficiency  and 
lower  electricity  bills.  Furthermore,  allowing 
consumers 
in  dynamic  price 
markets  could  alleviate  congestion  and 
curtailment while facilitating the integration of 
variable  renewables.  This  includes  efforts  to 
increase  the  availability  and  uptake  of  time-
of-use  and  dynamic  tariffs,  and  increased 
uptake of microgeneration and storage. 

to  engage 

delays. 

Ireland’s 

challenge, 

timeline 
this 

A  key  bottleneck  lies  in  planning  and 
strategic 
permitting 
infrastructure  development  process  currently 
aims  to  fast-track  permits  for  key  energy 
projects,  with  decisions  expected  within  18 
weeks  from  the  expiry  of  the  period  for 
making submissions or observations. However, 
the  scale  and  complexity  of  these  projects 
is  often  exceeded. 
this 
means 
Recognising 
Ireland  has 
undertaken  reforms  to  streamline  planning 
and  permitting  procedures,  most  notably 
through  the  Planning  and  Development  Act 
Accelerated 
2024 
development 
designated 
maritime  area  plans  for  offshore  renewable 
energy would be helpful. This could be enabled 
by  timely  designation  of  maritime  special 
areas  of  conservation  (SACs)  and  special 
protection areas (SPAs) under the Natura 2000 
further 
framework,  which  would  create 
certainty  on  the  available  maritime  areas  for 
RES deployment. 

Section 2). 

remaining 

(see 

of 

Increasing the energy efficiency of 
the built environment 

sector 

residential 

The 
remains  a 
significant  contributor  to  Ireland’s  GHG 
emissions. In 2023, it accounted for 9.7% of 
the  total  domestic  emissions,  despite  a  7.1% 

reduction  from  the  previous  year  driven  by 
high  fuel  prices,  regulation  and  a  milder 
winter.  The  building  stock  in  Ireland  remains 
one of the most carbon-intensive in Europe, at 
9.0 g CO2/m2 (15), indicating that improvements 
in  energy  efficiency  and  electrification  may 
have  substantial  effects  on  GHG  emissions. 
The EPA estimates residential emissions could 
fall  by  15%  to  27%  by  2030,  depending  on 
the  implementation  of  additional  measures, 
including  home  retrofits,  financial  support  for 
heat  pumps,  and  the  expansion  of  district 
heating. 

Ireland  has  made  notable  strides 
in 
scaling  up  energy  efficiency  retrofits.  To 
support  Ireland’s  clean  energy  transition,  the 
national  retrofit  plan  aims  to  upgrade  the 
equivalent  of  500 000  homes  to  a  building 
energy rating (BER) of B2 or cost-optimal level 
and  to  install  680 000  heat  pumps  (400 000 
in  existing  homes)  by  2030.  As  an  example, 
the  warmer homes scheme,  co-funded  by  the 
European  Regional  Development  Fund  (ERDF), 
has  provided  upgrades  to  over  161 190 
homes since 2001. Funding increases in recent 
years have supported the delivery of a greater 
volume of deeper and more complex upgrades. 
Projections  by 
Irish  Building  Stock 
Observatory  show  the  BER  B2  retrofit  target 
could be achieved by 2032. However, the goal 
of  installing  400 000  heat  pumps  is  not 
expected to be met until 2042. 

the 

(15)  European  Commission  (2024)  Climate  Action  Progress 

Report. 

14 

 
 
Graph 3.3: Pace of retrofitting actions - B2s or 
better building energy ratings (BER) upgrades 
achieved since Climate Action Plan 2019 

Data  centres  accounted  for  21%  of  Ireland’s 
total metered electricity consumption in 2023, 
a 20% increase from 2022. 

from 

Scaling up district heating could be a key 
component  in  meeting  Ireland’s  sectoral 
emissions  ceiling.  Estimates 
the 
Climate  Change  Advisory  Council  and  SEAI 
suggest that district heating could supply up to 
half  of  the  heating  demand  in  buildings (17). 
While  Ireland  has  taken  steps  to  develop 
district heating, a robust policy and regulation 
framework  will  be  crucial  to  mobilise  private 
investment  and  effectively  utilise  waste  heat 
from industry and data centres. 

Further  policy  actions  could  enhance  the 
effectiveness  and  pace  of  retrofitting 
efforts.  Significant  barriers  persist,  including 
skilled  labour  shortages,  high  upfront  costs, 
supply  chain  constraints,  and  limited  local 
funding. While measures such as reducing VAT 
on heat pump installations support sustainable 
heating,  supply  chain  limitations  may  hinder 
their availability. Phasing out untargeted fossil 
fuel  subsidies  -  while  protecting  vulnerable 
households 
-  would  help  align  market 
incentives  with  climate  goals.  Streamlining 
SEAI  grant  approvals,  increasing  SEAI  staff, 
and  facilitating  group-based  home  upgrades 
could further accelerate retrofitting. The timely 
adoption  of  the  roadmap  for  the  national 
building  renovation  plan  will  also  be  key  to 
advancing retrofit efforts. 

Addressing sectors with the 
highest emissions 

Emissions  from  the  transport  sector  are 
not  aligned  with  the  2030  target.  Ireland 
has set a target to reduce emissions from the 
transport sector by 50% in the sectoral carbon 
budgets.  However,  projections 
the 
Environmental  Protection  Agency  of  Ireland 
indicate  that  emissions  from  the  sector  are 
projected to reduce only 26% by 2030, even if 

from 

Data as of: 30/04/2025 
Source: SEAI 

Targeting government supports to energy 
costs would better protect those most in 
need,  while  reducing  their  fiscal  burden. 
Announced  at  Budget  2025,  an  untargeted 
EUR  250  per  household  electricity  credit  was 
provided in winter 2024. While energy poverty 
remains  below  the  EU  average  (10.6%)  it 
increased from 3.6% in 2021 to 7.2% in 2023. 
Targeting  of  supports  or  reviewing  the  rate 
and  income  threshold  for  the  targeted  fuel 
allowance  would  better  support  vulnerable 
households  in  line  with  the  recommendations 
of the Joint Committee on Social Protection. 

Rising  electricity  demand,  driven  by  data 
centres,  poses  a  significant  challenge. 
Even  in  the  most  ambitious  scenario,  Ireland 
final  energy 
the  2030 
could  exceed 
consumption  target  by  around  20%,  primarily 
because  rising  energy  demand  outpaces  the 
efficiency  gains  from  existing  and  planned 
measures (16).  Increased  energy  consumption, 
driven  primarily  by  data  centres  but  also  the 
electrification  of  heating  and 
transport, 
necessitates  improved  flexibility  and  demand 
energy 
management. 
consumption  increased  by  0.7%  compared  to 
2022,  despite  a  marked  reduction  in  the 
energy  consumption  of  the  building  stock. 

2023, 

final 

In 

(16)  SEAI (2024) National Energy Projections. 

(17)  SEAI (2022) National Heat Study. 

15 

050000100000150000200000250000300000350000400000450000500000Target in 2030 
  
 
 
most  of  the  measures  set  out  in  the  Climate 
Action Plan 2024 are implemented (18). 

Graph 3.4: Sectoral share of greenhouse gas 
emissions in Ireland in 2023 

Source: EPA 

this 

is  hindered  by 

Ireland  has  made  efforts  to  incentivise 
the  uptake  of  electric  vehicles  (EVs). 
However, 
Ireland's 
dispersed  and  low-density  population.  The 
national  development  plan  and  the  climate 
action fund both provide significant funding to 
support  low-emission  vehicles,  with  grants  up 
to  EUR 3 500  for  new  privately-bought  EVs. 
Simultaneously, EVs benefit from a lower rate 
of  the  annual  motor  tax  and  preferential 
vehicle  registration  tax.  The  share  of  battery 
electric vehicles (BEVs) in Ireland continued to 
the  car 
representing  2.8%  of 
increase, 
passenger  fleet 
in  2024,  above  the  EU 
average  of  2.13% (19).  However,  recent  data 
from the Central Statistics Office show a 25% 
decline  in  new  EV  registrations in  2024, likely 
due  to  factors  such  as  reduced  government 
incentives  and  the  lack  of  adequate  charging 
infrastructure. 

Limited  charging 
infrastructure  stalls 
transport  electrification.  According  to  the 
European  Alternative  Fuels  Observatory, 
Ireland had 3 588 charging points in 2024, or 
one  for  every  21.4 vehicles,  far  below  the  EU 
average  of  one 
for  every  7  vehicles. 
Geographical  coverage  of  charging  stations 
larger,  urban  areas, 
remains  centred 

in 

reducing  the  available  charging  infrastructure 
for  commuting  purposes. 
is  therefore 
important  to  ensure  sufficient  public  funding 
for the national road network EV charging plan 
cost-
2024-2030,  where 
effectively reducing CO2 emissions. 

justified 

for 

It 

have 

is  scope  for 

improving  public 
There 
notably 
infrastructure, 
transport 
electrified  rail.  The  availability  of  public 
transport  is  an  important  metric  to  enhance 
cohesion  between  rural  and  urban  areas, 
promote  labour  mobility  and  support  housing 
developments, 
been 
which 
overwhelmingly  concentrated  in  few  viable 
areas.  Dublin  is  among  the  most  congested 
urban  areas  in  Europe,  meaning  that  further 
efforts  to  improve  public  transport  provision 
could  also  reduce  congestion  and  the  time 
spent  in  traffic.  Since  the  launch  of  the 
in 
connecting 
January 2022, over 148 new or enhanced bus 
services  have  been  introduced.  Furthermore, 
the  Cork  commuter  rail  network  is  also  being 
upgraded  and  electrified  as  part  of  Ireland’s 
national  recovery  and  resilience  plan.  As 
electrified  rail  amounts  to  53  km  (2.6% 
compared to the EU average of 60%), further 
investments would be necessary. 

Ireland  rural  mobility  plan 

for 

relative 

LULUCF 

Land  use,  land  use  change,  and  forestry 
(LULUCF)  emissions  are  increasing.  Net 
emissions 
sector 
the 
increased from  3.66  Mt  CO₂  eq.  in  2022  to 
3.89 Mt CO₂ eq. in 2023, while emissions from 
to 
reduced  by  4.6% 
agriculture 
2022 (20).  According  to  estimates  provided  by 
the  Irish  Environmental  Protection  Agency, 
emissions  from 
the  LULUCF  sector  are 
projected  to  rise  by  23%  between  2022  and 
2030, even with additional measures (21).  This 
threatens 
the 
emissions  reduction  targets  set  at  EU  and 
national  level.  This  is  particularly  concerning 
for  the  LULUCF  sector,  since  net  carbon 
removals  (meaning  a  greater  absorption  than 
emissions  of  CO2  eq.)  would  be  necessary  to 

Ireland’s  ability 

to  meet 

(18)  EPA  (2024)  Ireland’s  GHG  emissions  projections 2023-

Use, Land Use Change and Forestry. 

(20)  EPA (2024) Annual Review 2024: Agriculture and Land 

2050. 

(21)  EPA  (2024)  Ireland's  GHG  missions  projections,  2023-

(19)  European Alternative Fuels Observatory. 

2050. 

16 

37.821.49.714.37.59.3AgricultureTransportResidentialEnergy industriesManufacturing combustionOther 
     
 
 
meet  net-zero  targets  in  2050.  Ireland  could 
continue  to  build  on  its  peat  rehabilitation 
programmes,  expanding  these  to  deliver  both 
additional 
and 
biodiversity gains. 

reductions 

emissions 

Investing in Ireland’s water future 
for sustainability and 
competitiveness 

has 

plan, 

Policy  efforts  for  the  agricultural  sector 
have  focused  on  increasing  production 
efficiency.  In  the  common  agriculture  policy 
strategic 
devoted 
Ireland 
EUR 1.4 billion  to  promote  more  ambitious 
environmental  and  climate-oriented  practices, 
such  as  reducing  chemical  nitrogen  usage, 
increasing  tree  planting  and  extending  nature 
and biodiversity rich land areas (see Annex 7). 
Ireland  is  also  working  to  restore  peatlands 
and enhance soil management to decrease the 
impact  of  agriculture.  Ireland  is  gradually 
transitioning  to  a  sustainable  food  system  by 
implementing 
the 
environmental  impact  of  agriculture.  Since 
2021, the area farmed organically has trebled 
to 225 500 hectares in 2023 (22). 

policies 

reduce 

to 

Increasing  efforts 

current  policy  mix 

The 
could  be 
complemented  with  pricing  instruments 
to  increase  carbon  sequestration.  Ireland 
is  developing  a  carbon  farming  framework  to 
support  farmers  in  the  transition  to  low-
emission, sustainable agriculture practices, but 
this  framework  has  been 
publication  of 
incentivise 
to 
delayed. 
carbon  sequestering  is  crucial  to  achieve  the 
net-zero  emissions  target.  For  instance,  the 
European 
and 
Technology  and  Climate KIC  have  assessed 
that 
restoration  of 
peatlands  has  the  potential  to  reduce  carbon 
by  3.5-29 tonnes  of  CO2  eq.  per  hectare  per 
year (23).  Furthermore,  work  on  protecting 
Natura 2000  sites  designated  for  raised  bogs 
and  blanket  bogs  would  enable  both 
restoration and carbon sequestering. 

rewetting  and 

Innovation 

Institute 

the 

of 

(22)  Climate  Change  Advisory  Council  (2024)  –  Annual 

Review. 

(23)  European  Institute  of  Innovation  &  Technology  (2023) 
Dealing with climate change and sustainability targets: 
The innovation potential for the Irish agri-food sector. 

17 

resilience 

role 
and 

Water  infrastructure  is  not  only  crucial 
for environmental sustainability, but also 
a  key  driver  of  economic  growth, 
inclusion. 
competitiveness  and  social 
in  ensuring 
Water  plays  a  central 
sustainable 
economic 
development,  impacting  critical  sectors  such 
as  housing  and  urban  development,  and  the 
expansion  of  industries  reliant  on  accessible 
water resources. Effective water management 
is  essential  both  for  enhancing  environmental 
compliance 
Ireland’s 
competitiveness, making it an attractive place 
to live, work, and invest. 

boosting 

and 

Commission's 

However,  the  water  infrastructure  faces 
chronic under-investment.  According to the 
environmental 
European 
implementation  review,  to  meet  the  different 
environmental  targets  outlined  in  the  Water 
Framework  Directive  and the  Floods Directive, 
investment  gap  of 
Ireland 
EUR 954 million  per  year  by  2027  (0.19%  of 
GDP).  The  most  pressing  needs  are  identified 
in  wastewater  treatment,  water  management 
and  pollution  control,  all  of  which  pose  a 
significant  risk  to  further  progress  in  cross-
sectoral developments. 

faces  an 

high 

rates 

leakage 

Underperforming  wastewater  treatment 
and 
threaten 
reliability  and  sustainability  of  Ireland’s 
water  infrastructure.  In  2023,  more  than 
half  of  the  country’s  treatment  plants,  along 
with over 400 stormwater overflows, failed to 
meet  the  national  standards  set  by  the 
Environmental Protection Agency. Furthermore, 
wastewater  treatment  plants  in  ten  major 
towns, including the Ringsend facility in Dublin, 
did not meet European Union standards. While 
in  connecting 
progress  has  been  made 
previously  unserved  areas  and  reducing  the 
number of towns and villages discharging raw 
sewage, wastewater treatment in larger urban 
areas,  such  as  the  Ringsend  facility  in  Dublin, 
remains  insufficient.  Uisce  Éireann  (the  state-
owned  water  utility  company)  estimates  that 

 
 
the leakage rate was 37% in 2023, marking a 
significant  improvement  from  46%  in  2018, 
though it remains far above the EU average of 
25%.  Addressing  investment  needs  is  crucial 
to  prevent  inadequate  water  infrastructure 
from  both  hindering  business 
investment 
through  higher  operational  costs  and  limiting 
the approval of new housing developments. 

is 

largely 

stagnant, 

Water  quality  and  pollution  control 
remain 
posing 
challenges  to  water-dependent  sectors’ 
competitiveness.  Water  quality  indicators  in 
Ireland  have  remained  largely  unchanged  in 
2023  (24),  despite  extensive  monitoring  of 
surface  waters  (rivers,  lakes,  estuaries,  and 
coastal  waters)  and  groundwater (25).  While 
some improvements in biological  quality  have 
been observed in rivers and lakes, these gains 
are offset – or even exceeded – by declines in 
other  areas.  The  primary  cause 
the 
increased  concentration  of  nutrients,  such  as 
phosphorus 
resulting 
predominantly  from  agriculture,  wastewater 
discharge,  and  forestry.  These  challenges  not 
only  undermine  Ireland’s  natural  ecosystems 
but  also  threaten  the  long-term  viability  of 
sectors  dependent  on  clean  water,  such  as 
tourism,  fisheries,  and  agriculture.  Recent 
measures  on  low  emission  slurry  spreading 
equipment and feeds are expected to improve 
water  quality.  Planned  restrictions  in  urea  on 
granular  form  would  further  enhance  water 
quality,  ultimately  helping  protect 
key 
industries  and  ensuring  Ireland’s  continued 
in  attracting  sustainable 
competitiveness 
investment  and  supporting  growth  in  water-
dependent sectors. 

nitrogen, 

and 

A  water  pricing  mechanism  would  help 
ensure  sustainable  funding  for  water 
infrastructure,  while  promoting  more 
efficient  water  use.  By  potentially  reducing 
demand and raising funds for investment and 
maintenance,  this  type  of  mechanism  would 
long-term  viability  of  water 
support  the 

(24)  According to early EPA data, there are some signals of 
improvements in nitrates concentrations in 2024 – Early 
insights  indicator  report:  Nitrogen  concentrations  in 
selected major rivers, January-December 2024. 

(25)  EPA  (2024)  –  Water  Quality  in  2023.  An  Indicators 

Report. 

18 

systems  while  helping  its  competitiveness. 
Without a pricing system that reflects the true 
costs  of  water,  there  is  little  incentive  to 
attract  investments  in  modernising  pipelines 
infrastructure. 
essential 
other 
and 
Implementing 
system,  while 
a 
considering  allowances  for  larger  households 
and  individuals  with  specific  health  needs,  is 
crucial  for  balancing  investment  with  equity 
and ensuring the future sustainability of water 
resources. 

such 

Transitioning to a circular economy 

Ireland  continues  to 
lag  behind  EU 
circular economy benchmarks. In 2022, the 
recycling  rate  of  municipal  waste  stood  at 
41%,  falling  short  of  both  the  EU  average  of 
46%  and  the  target  of  50%.  Despite  a  slight 
decline  in  municipal  waste  per  capita  –  from 
625 kg  in  2021  to  615 kg  in  2022  –  Ireland 
remains  among  the  highest  waste-generating 
countries  per  capita  in  the  EU.  Moreover,  the 
circular  material  use  rate  was  just  1.8%  in 
2022,  significantly  below  the  EU  average  of 
11.5%,  highlighting  the  need  for  stronger 
resource 
and  management 
measures.  Improving  circularity  would  also 
reduce dependencies, especially on critical raw 
Commission 
materials. 
estimates  that  EUR 827 million  per  year  are 
needed  to  meet  circular  economy  and  waste 
objectives. 

efficiency 

European 

The 

signs 

following 

accelerate 

With several policies in place, progress in 
circular  economy  indicators  is  expected 
of 
to 
stagnation.  Under  overarching  EU-level 
legislation (including the European Green Deal 
and 
the  circular  economy  action  plan), 
Ireland’s  climate  action  plan  stands  at  the 
forefront  of  environmental  policy,  aiming  to 
address  climate  change  and  achieve  net-zero 
greenhouse  gas  emissions  by  2050.  The 
recently  enacted  Circular  Economy  and 
Miscellaneous Provisions Act 2022 establishes 
the  legislative  framework  for  key  national 
initiatives,  such  as  the  circular  economy 
strategy and the 2021-2027 circular economy 
programme. Ireland’s 2020-2025 waste action 
plan  for  a  circular  economy  has  also  been 

 
 
instrumental  in  shaping  the  country’s  policy 
direction,  outlining  a  clear  roadmap  to  meet 
EU  targets  and  advance  the  circular  economy 
transition. 

for 

These  strategies  and  action  plans  could 
be  reinforced  by  further  measures  to 
incentivise  waste  diversion  up  the  waste 
include 
hierarchy.  These  measures  could 
extending price-based tools in the construction 
sector,  revising  public  procurement  (26)  for 
waste  minimisation,  and  increasing  financial 
biomethane 
support 
infrastructure.  To  further  boost  the  recycling 
and  reuse  of  construction  and  demolition 
waste,  including  separate collection  at  source, 
Ireland  could  implement  measures  such  as 
digital 
extended 
producer  responsibility,  economic  incentives, 
and  upstream  efforts  like  increasing  recycled 
content  and  adopting  circular  design 
in 
construction (27). 

pre-demolition 

sustainable 

audits, 

(26)  In  2024,  a  new  Green  Public  Procurement  policy  was 
published, aiming to drive implementation of green and 
circular procurement practices across the public sector – 
Green  Public  Procurement  Strategy  and  Action  Plan 
2024-2027. 

(27)  Ireland is planning to publish a Circularity Roadmap for 

the Construction Sector in 2025. 

19 

 
 
SKILLS, QUALITY JOBS AND SOCIAL FAIRNESS 

Mitigating the social consequences 
of the housing crisis 

suggesting 

Homelessness  is  at  a  record  high  and 
continuing to rise. Homelessness doubled in 
three  years  with  more  than  15 000  people  in 
emergency accommodation now. This includes 
2 000  families  with  over  4 500  children.  This 
comes in the fourth year of the government’s 
‘housing for all’ plan, which aims to ‘eradicate 
serious 
homelessness’, 
shortcomings.  A  major  direct  cause  of 
homelessness  is  a  notice  of  termination  of 
tenancy  in  the  private  rented  sector,  where 
landlords can evict tenants without providing a 
reason in the first six months of a new rental 
contract.  Further  analysis  could  be  conducted 
to  see  if  tenant  rights  could  be  strengthened 
to help prevent homelessness due to evictions. 
The  Irish  Housing  Commission  suggests  that 
normalising 
the  sale  of  properties  with 
incumbent tenants could benefit both tenants, 
by  allowing  them  to  remain  in  their  homes, 
and  landlords  that  want to  sell  their  property. 
Also  expanding  the  'cost  rental  tenant  in  situ 
scheme',  which  allows  local  authorities  to 
purchase  properties  when 
face 
eviction due to a sale, could increase the social 
housing  stock  and  simultaneously  reduce 
homelessness. 

tenants 

In 

cohorts. 

Rent allowances have been key to protect 
low-income 
international 
comparisons,  rent  allowances  in  Ireland  are 
relatively  generous  and  reach  a  high  number 
of  households  (around  84 000  or  5%  of 
households).  While 
rent  allowances  have 
helped  protect  lower income households  from 
poverty  and  homelessness,  they  also  resulted 
in a decreased stock available for rent or sale 

for  all  other  cohorts (28).  Rent  allowance 
claimants  have  also  reported  difficulties  in 
finding  dwellings  to  rent,  citing  discrimination 
from  landlords.  Increasing  the  share  of  social 
housing  in  the  overall  housing  stock  could 
create  a  more  stable  housing  system.  (see 
Annex 9). 

The  demand  for  social  housing  is  on  the 
rise.  In  2023,  there  were  almost  59 000 
households  on  local  authority  waiting  lists  for 
social  housing.  Over  30%  of  those  on  the  list 
wait five years or more. Currently, there is an 
insufficient supply of adequately sized homes 
for  smaller  households  (with  one  or  two 
persons),  larger  households  (of  five  or  more 
persons), and those requiring special care. 

Construction  of  social  housing  is  scaling 
up, but further efforts are needed. A total 
of 7 871 new social housing units was built in 
2023  (-3%  compared  to  2023),  highlighting 
capacity  constraints.  Further  policy  measures 
could  include  increasing  the  portion  of  new 
residential  buildings  which  a  developer  must 
sell to local authorities for social housing (part 
V of the Planning and Development Act 2000, 
as  amended)  and 
increasing  multi-year 
funding for the Land Development Agency and 
approved  housing  bodies  to  purchase  and 
service  land.  This  could  be  accompanied  by 
greater 
land 
serviced for housing. 

transparency  and  data  on 

Improving social and labour 
inclusion of disadvantaged groups 

Ireland  is  on  track  to  meet  its  national 
poverty  reduction  target  set  out  in  the 

(28)  Ireland  Housing  Commission  (2024)  Report  of  the 

Housing Commission. 

20 

 
 
 
European  Pillar  of  Social  Rights  Action 
Plan. By 2030, the number of people living in 
poverty or social exclusion should decrease by 
90 000,  including  45 000  children.  According 
to SILC 2024, the number of people at risk of 
poverty  or  social  exclusion  is  now  880,000 
which is down 108,000 on the baseline figure. 
For children, the figure is also down, by 53,000 
on the baseline figure of 303,000. 

and 

consequently 

Disadvantaged  groups  face  obstacles 
accessing  the  labour  market  and  social 
have 
services 
disproportionately  high  poverty  rates. 
Despite improvements, Ireland has still one of 
the highest disability employment gaps in the 
EU  (36.7%  vs  21.5%)(29).  Single  parents  are 
employed at a rate below the EU average and 
the Roma and Traveller communities still have 
few work opportunities. Disadvantaged groups’ 
access  to  jobs  is  hindered  by  financial  and 
non-financial  barriers,  such  as:  (i)  the  cost  of 
returning to education and training; (ii) the cost 
few 
and  availability  of 
affordable  housing  options,  especially 
in 
bigger  cities;  (iv)  limited  access  to  reasonable 
accommodation 
(v) 
discrimination.  Targeted  upskilling  measures 
could  contribute  to  their  labour  inclusion  in 
sections  affected  by  labour  shortages,  like 
construction  (see  Section  2).  The  percentages 
of  single  parents  (48.2%)  and  persons  with 
disabilities (32.7%) at risk of poverty or social 
exclusion  are  above 
respective  EU 
averages  (41.3%  and  28.8%).  The  percentage 
of  children  at  risk  of  poverty  or  social 
exclusion  decreased  from  24.3%  in  2023  to 
20.6% in 2024. 

childcare; 

work; 

and 

the 

(iii) 

at 

Ireland is addressing social exclusion and 
barriers to employment. Targeted activation 
measures, like the 'early engagement' process, 
whereby  the  Irish  public  employment  service 
actively  engages  with  people  with  disabilities 
helped  many  people  find  employment.  The 
Irish  European  Social  Fund  Plus  programme 

(29)  In  EU-SILC  survey,  the  prevalence  of  disability  is 
negatively  correlated  with  the  size  of  the  employment 
gap; in other words, countries that report lower levels of 
disability  tend  to  report  higher  employment  gaps,  and 
countries  with  higher  prevalence  rates  tend  to  report 
smaller employment gaps. 

indicates 

supports  social  innovation  measures  to  test 
new  ideas  and  policies,  designed  to  address 
social  inclusion  challenges.  The  new  right  to 
request  flexible working conditions and higher 
childcare  subsidies  help  single  parents  and 
other carers. Increasing the core welfare rates 
in recent budgets as well as one-off measures, 
such  as  paying  double  child  benefit  in  certain 
months  contributed  to  the  poverty  reduction 
effect  of  social  transfers.  However,  data 
clearly 
improvement. 
room 
Focusing  on  safeguarding  the  real  value  of 
means-tested  welfare  supports,  instead  of 
one-off  untargeted  benefits,  could  improve 
cost  effectiveness  and  reduce  poverty  among 
disadvantaged  groups.  Further 
increasing 
availability and affordability of childcare could 
enable  more  (single)  parents  to  take  up  work 
(see  Annexes  8  and  9).  Measures  in  these 
areas  would  not  only  contribute  to  Ireland’s 
2030 national target on employment but also 
to  the  national  2030  target  on  poverty 
reduction. 

for 

inequalities 

affect 
Educational 
disadvantaged  students.  Children 
from 
disadvantaged  socio-economic  backgrounds, 
including  Travellers  and  Roma,  and  students 
with  disabilities  have 
lower  educational 
outcomes, which is also reflected in the higher 
early-school  leaving  rate  (Annex  10).  The 
'Delivering  equality  of  opportunity  in  schools' 
(DEIS) national programme provides additional 
supports  to  schools  with  a  high  share  of 
disadvantaged 
all 
students, 
disadvantaged  students  receive  the  support 
they  need.  Ireland  is  developing  a  new  DEIS 
Plan  to  set  a  strategy  to  support  children  at 
risk of educational disadvantage in all schools, 
with  a  view  to  providing  equitable  learning 
opportunities to all. 

but 

not 

The  recent  investments  in  new  special 
schools for students with disabilities risk 
increasing  educational segregation.  These 
are  not  in  line  with the  UN  convention  on  the 
rights  of  persons  with  disabilities,  which 
Ireland  signed  in  2018.  Inclusive  measures  in 
mainstream  schools  and  classes  would  better 
address the needs of students with disabilities, 
families  and  schools,  and  would  contribute  to 
social  cohesion.  This  could  be  complemented 
by  improved  coordination  of  educational  and 

21 

 
 
controls,  and  incentives  within  the  healthcare 
sector. Implementing its action plan will be key 
to  ensure  that  healthcare  spending  remains 
within  its  revised  financial  ceiling  in  2025. 
Several recovery and resilience plan measures 
are  also 
cost-
effectiveness, including the full deployment of 
the  integrated  financial  management  system 
and  of  e-pharmacy  systems  across  hospitals 
in  Ireland,  as  well  as  the  implementation  of 
the Sláintecare consultant contract. 

expected 

improve 

to 

has 

Ireland 

initiated 

Decentralisation  of  the  health  system  is 
underway. 
the 
progressive  rollout  of  health  regions  in  2024, 
which is expected to enable  better integration 
of services across different service levels and 
improved budget control. Implementing a well-
defined performance management system will 
be  key  to  ensure  its  success.  Ireland  is  also 
improving  its  local  primary  care  services  via 
the  Enhanced  Community  Care  Programme, 
including  the  Chronic  Disease  Management 
Programme included  in  Ireland’s  recovery  and 
resilience plan. 

Further  efforts  are  needed  to  alleviate 
the  strain  on  hospitals.  To  reduce  the 
pressures currently faced by hospitals, further 
reforms  are  needed  to  facilitate  access  to 
primary  care,  including  by  accelerating  an 
effective  digitalisation  of  the  health  system. 
While  public  primary  care  coverage  has  been 
extended  in  2024  in  several  steps,  working 
adults  remain  largely  uncovered.  Moreover, 
nearly half of the population purchases private 
health  insurance  to  bypass  long  waiting  lists, 
which  risks  exacerbating  health  inequalities. 
The proportion of the Irish population reporting 
unmet needs for medical care is above the EU 
average, primarily affecting the lowest-income 
cohort. Follow-up action by the government to 
set  up  and 
implement  universal  health 
Furthermore, 
warranted. 
is 
coverage 
employing  a  medium-term  staffing  strategy 
would 
improve  expenditure  planning,  help 
avoid  staff  shortages,  and  shorten  waiting 
lists. 

health  and  therapy  services,  also  at  central 
level. 

Despite  measures  to  increase  teacher 
supply,  shortages  persist.  Primary  and 
secondary  schools  face  difficulties  in  both 
recruiting and retaining teachers, relying more 
on  individuals  without  teaching  qualifications. 
The shortages affect mainly cities, in particular 
greater Dublin, and stem from factors such as 
high  rents  and  low  housing  availability.  The 
situation  limits  the  schools’  capacity  to  offer 
curricular  and extra-curricular  activities,  which 
affects  students’  skills  and  engagement, 
especially  for  disadvantaged  students(30).  At 
the same time, more than 4 000 Irish teachers 
are assumed to work abroad. The EU Technical 
Support  Instrument  is  helping  the  authorities 
to  address  the  growing  teacher  shortages  by 
conducting  a  comprehensive  review  of  the 
factors  affecting  teacher  supply  and  demand. 
In  parallel  the  authorities  are  carrying  out  an 
external  consultation  which  will  consider 
various policy responses. 

Improving cost-effectiveness of 
the healthcare system 

Ireland’s  healthcare  system  continues  to 
face  difficulties.  Rising  demand  and  limited 
public  primary  care  coverage  put  a  strain  on 
costly  hospital  care,  which  faces  significant 
capacity  constraints  (see  Annex  14).  As  a 
result, Ireland has seen a sustained increase in 
its  healthcare 
recurrent 
budgetary overspends. As population ageing is 
expected  to  put  further  pressure  on  the 
healthcare  system  in  the  coming  years,  there 
is  a  need  for  a  more  effective  use  of 
resources. 

spending  and 

Ireland  has  taken  steps  to  contain  the 
growth  of  healthcare  spending.  An  inter-
departmental 
savings 
productivity 
in  2024,  has  been 
taskforce,  established 
tasked  to  review  financial  governance,  cost 

and 

(30)  Carroll et al. (2024), Embracing Diversity in all its Forms: 
The  Voluntary  Secondary  Sector  in  Ireland  Education, 
Dublin: ESRI. 

22 

 
 
•  ensuring  connection  of  large  energy 
users to the electricity grid is linked to 
additional  renewable  capacity  and 
flexibility; 

•  promoting  the  shift  to  sustainable 
transport  by  ensuring  a  sufficient  public 
charging 
zero-emission 
vehicles  and  strengthening  sustainable 
public transport; 

network 

for 

•  reinforcing  water 

infrastructure  by 
in  wastewater 
boosting 
treatment  plants  to  reduce  high  leakage 
rates and improve water quality; 

investments 

•  stepping  up  efforts  in  the  circular 
economy  by  taking  further  measures  to 
incentivise  waste  diversion  up  the  waste 
hierarchy and increase waste recycling; 

• 

increasing  the  supply  of  social  and 
reduce 
affordable  housing,  also 
capacity 
homelessness, 
constraints  in  the  residential  construction 
sector; 

address 

and 

to 

•  strengthening 

labour  market  and 
inclusion  of  disadvantaged 
social 
groups, 
persons  with 
particular 
disabilities and single parents, by putting in 
targeted  outreach  and 
place  better 
upskilling; 

in 

•  stepping  up  the  measures  to  address 

teacher shortages; 

KEY FINDINGS 

To  foster  competitiveness,  sustainability  and 
social fairness, Ireland would benefit from: 

• 

implementing  the  RRP, 
including  the 
REPowerEU  chapter;  swiftly  implementing 
cohesion  policy,  taking  advantage  of  the 
opportunities  under  the  mid-term  review 
and making optimal use of EU instruments, 
including  InvestEU  and  STEP,  to  improve 
competitiveness; 

• 

increasing  public  R&D  investment  and 
supporting  the  increase  of  business 
R&D investment to boost the productivity 
and competitiveness of domestic SMEs; 

•  future-proofing  public  finances  by 
broadening  its  tax  base  and  reviewing  the 
scope and impact of tax expenditures; 

• 

reform 
implementing 
effectively 
sufficient 
resources  and  expertise  in  all  levels  of 
government; 

its  planning 
devoting 

by 

•  further  addressing  the  healthcare 
system’s 
fiscal  sustainability  and 
equity  by  improving  its  cost  effectiveness 
and ensuring equal access to primary care. 

security 

•  reducing  curtailment  and  enhancing 
strengthening 
energy 
investment  in  electricity  grids,  flexibility, 
and  storage  capacities,  while  improving 
consumer engagement in energy markets; 

by 

•  reducing  reliance  on  fossil  fuels  and 
accelerating 
of 
the 
renewables  by  streamlining  planning  and 
permitting; 

deployment 

• 

increasing  the  energy  efficiency  of 
the  housing  and  building  stock  by 
scaling up the pace of retrofitting actions;  

23 

 
 
ANNEXES 

 
 
 
 
LIST OF ANNEXES 

Fiscal 

A1.  Fiscal surveillance and debt sustainability 

A2.  Taxation 

Productivity 

A3. 

Innovation to business 

A4.  Making business easier 

A5.  Capital markets, financial stability and access to finance 

A6.  Effective institutional framework 

Sustainability 

A7.  Clean industry and climate mitigation 

A8.  Affordable energy transition 

A9.  Climate adaptation, preparedness and environment 

Fairness 

A10.  Labour market 

A11.  Social policies 

A12.  Education and skills 

A13.  Social Scoreboard 

A14.  Health and health systems 

Horizontal 

A15.  Sustainable development goals 

A16.  CSR progress and EU funds implementation 

A17.  Competitive regions 

LIST OF TABLES 

General government balance and debt 
Net expenditure growth 
Net expenditure (outturn and forecast), annual and cumulated deviations vis-à-vis the recommendation 
Defence expenditure 

A1.1. 
A1.2. 
A1.3. 
A1.4. 
A1.5.  Macroeconomic developments and forecasts 
A1.6. 
A1.7. 
A1.8. 
A1.9. 

General government budgetary position 
Debt developments 
RRF – Grants 
Projected change in age-related expenditure in 2024-2040 and 2024-2070 

27 

30 

30 

37 

40 

40 

44 

48 

56 

61 

61 

66 

72 

79 

79 

84 

88 

93 

94 

97 

97 

99 

105 

31 
31 
32 
32 
32 
33 
33 
34 
35 

 
 
 
Financial indicators 
Selected indicators on administrative burden reduction and simplification 
Key Digital Decade targets monitored through the Digital Economy and Society Index 
Key clean industry and climate mitigation indicators: Ireland 
Key Energy Indicators 
Key indicators tracking progress on climate adaptation, resilience and environment 

A1.10.  Fiscal Governance Database Indicators 
A2.1. 
Taxation indicators 
A3.1. 
Key innovation indicators 
A4.1.  Making Business Easier: indicators. 
A5.1. 
A6.1. 
A6.2. 
A7.1. 
A8.1. 
A9.1. 
A13.1.  Social Scoreboard for Ireland 
A14.1.  Key health indicators 
A16.1.  Selected EU funds with adopted allocations - summary data (million EUR) 
A16.2.  Summary table on 2019-2024 CSRs 
A17.1.  Selection of indicators at regional level in Ireland 

LIST OF GRAPHS 

A2.1. 
A2.2. 
A2.3. 

Tax revenue shares in 2023 
Tax wedge for single and second earners as a % of total labour costs, 2024 
Outbound foreign direct investment (FDI) income payments from Ireland and the rest of the EU-27 relative to the size of 
their economies (in % of GDP and GNI*, left) and in absolute terms (EUR billions, right), 2022 
Public expenditure on R&D as % of GDP and GNI* 

A3.1. 
A4.1.  Making Business Easier: selected indicators. 
A5.1. 
Net savings-investment balance 
A5.2. 
International investment position 
A5.3. 
Capital markets and financial intermediaries 
A5.4. 
Composition of NFC funding as a % of GDP 
A5.5. 
Composition of household financial assets per capita and as a % of GDP 
A6.1. 
Trust in justice, regional / local authorities and in government 
A6.2. 
Indicators of Regulatory Policy and Governance (iREG) 
A6.3. 
Participation rate of 25-64 year olds in adult learning (%) by occupation 
A7.1. 
GHG emissions intensity of manu-facturing and energy-intensive sectors, 2022 
A7.2. 
Greenhouse gas emissions in the effort sharing sectors, 2005 and 2023 
A8.1. 
Retail energy price components for household and non-household consumers, 2024 
A8.2.  Monthly average day-ahead wholesale electricity prices and European benchmark natural gas prices (Dutch TTF) 
A8.3. 
A9.1. 
A9.2. 
A10.1.  Key labour market indicators 
A12.1.  Trend in underachievement in mathematics by students’ socio-economic background, OECD Programme for International 

Ireland's installed renewable capacity (left) and electricity generation mix (right) 
Direct dependency(1) on ecosystem services(2) of the gross value added generated by economic sector in 2022 
Investment needs and gaps in EUR million, in 2022 constant prices 

Student Assessment (PISA) 2012 - 2022 (%) 

A12.2.  Participation in education and training by educational attainment level 
A14.1.  Life expectancy at birth, years 
A14.2.  Treatable mortality 
A15.1.  Progress towards the SDGs in Ireland 
A16.1.  Distribution of RRF funding in Ireland by policy field 
A16.2.  Distribution of cohesion policy funding across policy objectives in Ireland 
A17.1.  Average annual GDP per head growth vs GDP per head in 2013 
A17.2.  Labour productivity per hour 

LIST OF MAPS 

A17.1.  Regional competitiveness Index 2.0, 2022 edition, Efficiency sub-index 

28 

36 
38 
43 
47 
55 
57 
58 
65 
71 
78 
93 
95 
101 
102 
106 

37 
37 

39 
40 
45 
48 
48 
49 
51 
53 
56 
57 
59 
62 
63 
66 
66 
68 
75 
76 
79 

88 
91 
94 
94 
98 
99 
100 
105 
107 

106 

 
 
 
 
FISCAL 
ANNEX 1: FISCAL SURVEILLANCE AND DEBT SUSTAINABILITY 

This  Annex  contains  a  series  of  tables  relevant  for  the  assessment  of  the  fiscal  situation  in  Ireland, 
including  how  Ireland  is  responding  to  Council  recommendations  issued  under  the  reformed  Economic 
Governance Framework. 

The  reformed  framework,  which  entered  into  force  on  30  April  2024 (31),  aims  to  strengthen  debt 
sustainability  and  promote  sustainable  and  inclusive  growth  through  growth-enhancing  reforms  and 
priority investments. The medium-term fiscal-structural plans (hereinafter, MTPs or plans) constitute the 
cornerstone  of  the  framework,  setting  the  budgetary  commitment  of  Member  States  over  the  medium 
term. The latter is defined in terms of net expenditure growth, which is the single operational indicator for 
fiscal surveillance.  

Ireland submitted its plan on 15 October 2024. The plan covers the period until 2029, presenting a fiscal 
adjustment  over  four  years.  On  21  January  2025,  the  Council  adopted  the  Recommendation  endorsing 
Ireland’s plan (32). 

The assessment of the implementation of the Council Recommendation endorsing Ireland’s plan is carried 
out  on  the  basis  of  outturn  data  from  Eurostat,  the  Commission  Spring  2025  Forecast  and  taking  into 
account  the  Annual  Progress  Report  (APR)  that  Ireland  submitted  on  6  May  2025.  Furthermore,  in  the 
context  of  the  Commission  Communication  of  19  March  2025 (33),  on  accommodating  defence 
expenditure  within  the  Stability  and  Growth  Pact,  the  Annex  reports  the  projected  increase  in  defence 
expenditure based on the Commission Spring 2025 Forecast.  

The Annex is organised as follows. First, developments in  government deficit and debt are presented 
based on the figures reported in Table A1.1. Then, the assessment of the implementation of the Council 
Recommendation endorsing the plan follows, based on the relevant figures presented in Tables A1.2 to 
A1.8, including data on defence expenditure.  

The Annex also provides information on the cost of ageing and the national fiscal framework. Fiscal 
sustainability risks are discussed in the Debt Sustainability Monitor 2024 (34). 

Developments in government deficit and debt  

Ireland’s government surplus amounted to 4.3% of GDP in 2024. Based on the Commission Spring 2025 
Forecast,  it  is  projected  to  decrease  to  0.7%  in  2025.  The  government  debt-to-GDP  ratio  amounted  to 
40.9% at the end of 2024 and, according to the Commission, it is projected to decrease to 38.6% end-
2025. The decrease of the debt-to-GDP ratio in 2025 mainly reflects the projected government surplus 
and the favourable interest rate-growth differential, corrected for significant stock flow adjustments. The 
path of debt reduction is forecast to continue in 2026, although at a less dynamic pace due to a decrease 
in the projected general government surplus. The difference between the general government balance in 
2025  projected  by  the  Commission  and  Ireland  is  due  to  differences  in  the  underlying  macroeconomic 
assumptions, as well as stronger current expenditure growth estimated by the Commission. 

(31)  Regulation (EU) 2024/1263 of the European Parliament and of the Council (EU) on the effective coordination of economic policies 
and on multilateral budgetary surveillance, together with the amended Regulation (EC) No 1467/97 on the implementation of the 
excessive deficit procedure, and the amended Council Directive 2011/85/EU on the budgetary frameworks of Member States are the 
core elements of the reformed EU economic governance framework. 

(32)  OJ C, C/2025/667, 21.01.2025, ELI: http://data.europa.eu/eli/C/2025/667/oj. 

(33)  Communication  from  the  Commission  accommodating  increased  defence  expenditure  within  the  Stability  and  Growth  Pact of  19 

March 2025, C(2025) 2000 final. 

(34)  Commission (2025) ‘Debt Sustainability Monitor 2024,’ European Economy-Institutional Papers 306. 

29 

 
 
 
 
Table A1.1:  General government balance and debt 

Source: Commission Spring 2025 Forecast (COM), Annual Progress Report (APR). 

Developments in net expenditure  

The  net  expenditure (35)  growth  of  Ireland  in  2025  is  forecast  by  the  Commission (36)  to  be  above  the 
recommended  maximum,  corresponding  to  a  deviation  of  0.3%  of  GDP.  Considering  2024  and  2025 
together,  the  cumulative  growth  rate  of  net  expenditure  is  also  projected  above  the  recommended 
maximum cumulative growth rate, corresponding to a deviation of less than 0.1% of GDP. The difference 
between  the  Commission's  calculations  of  the  net  expenditure  growth  and  the  estimates  of  national 
authorities  is  due  to  stronger  current  expenditure  growth  estimated  by  the  Commission,  including 
diverging assumptions on the permanent impact beyond 2024 of the ‘cost of living’ package announced in 
Budget 2025. The annual deviation in 2025 is above the 0.3% of GDP threshold.  

Table A1.2:  Net expenditure growth 

* The cumulative growth rates are calculated by reference to the base year of 2023. 
Source: Council Recommendation endorsing the national medium-term fiscal-structural plan of Ireland (REC), Annual Progress 
Report (APR) and Commission's calculation based on Commission Spring 2025 Forecast (COM). 

General government defence expenditure in Ireland remained stable at 0.2% of GDP between 2021 and 
2023 (37). According to the Commission Spring 2025 Forecast, expenditure on defence is projected at 0.2% 
of GDP in 2024 and 2025. 

(35)  Net expenditure is defined in Article 2(2) of Regulation (EU) 2024/1263 as government expenditure net of (i) interest expenditure, 
(ii) discretionary revenue measures, (iii) expenditure on programmes of the Union fully matched by revenue from Union funds,  (iv) 
national  expenditure  on  co-financing  of  programmes  funded  by  the  Union,  (v)  cyclical  elements  of  unemployment  benefit 
expenditure, and (vi) one-off and other temporary measures.  

(36)  Commission Spring 2025 Forecast, European Economy-Institutional paper 318, May 2025. 

(37)  Eurostat, government expenditure by classification of functions of government (COFOG). 

30 

2024OutturnAPRCOMAPRCOM1General government balance% GDP4.31.50.71.00.12General government gross debt% GDP40.937.738.635.938.2Variables20252026RECAPRCOMRECAPRCOM2024n.a.8.0%8.2%n.a.n.a.n.a.20255.1%5.3%6.7%15.4%13.7%15.5%20266.5%5.9%6.2%22.8%n.a.22.7%AnnualCumulative*Growth rates 
 
                                 
 
 
                                 
 
 
 
 
Table A1.3:  Net expenditure (outturn and forecast), annual and cumulated deviations vis-à-vis the 
recommendation 

* The growth rate for 2024 is not a recommendation but serves to anchor the base, as the latest year with outturn data when 
setting the net expenditure path is year 2023. 
Source: Commission Spring 2025 Forecast and Commission's calculation.  

Table A1.4:  Defence expenditure 

Source: Eurostat (COFOG), Commission Spring 2025 Forecast and Commission's calculation. 

Table A1.5:  Macroeconomic developments and forecasts 

Source: Commission Spring 2025 Forecast (COM), Annual Progress Report (APR). 

31 

2023202420252026OutturnOutturnCOMCOM1Total expenditurebn NAC115.9125.1133.4141.92Interest expenditurebn NAC3.43.23.43.53Cyclical unemployment expenditurebn NAC-0.1-0.1-0.1-0.34Expenditure funded by transfers from the EUbn NAC0.70.30.30.35National co-financing of EU programmesbn NAC0.50.60.60.66One-off expenditure (levels, excl. EU funded)bn NAC0.00.00.00.07=1-2-3-4-5-6Net nationally financed primary expenditure (before discretionary revenue measures, DRM)bn NAC111.4121.1129.3137.78Change in net nationally financed primary expenditure (before DRM)bn NAC9.78.28.49DRM (excl. one-off revenue, incremental impact)bn NAC0.50.00.410=8-9Change in net nationally financed primary expenditure (after DRM) bn NAC9.28.18.011Outturn / forecast net expenditure growth% change8.2%6.7%6.2%12Recommended net expenditure growth*% change9.8%5.1%6.5%13=(11-12) x 7Annual deviationbn NAC-1.72.0-0.414 (cumulated from 13)Cumulated deviationbn NAC-1.70.2-0.215=13/17Annual balance% GDP-0.30.3-0.116=14/17Cumulated balance% GDP-0.30.00.017p.m. Nominal GDP  bn NAC510.0533.4566.5592.6Variables2021202220232024202520261Total defence expenditure% GDP0.20.20.20.20.20.22of which: gross fixed capital formation% GDP0.00.00.10.00.00.03Flexibility from increases in defence expenditure% GDP#N/A#N/A4Cumulated balance after flexibility% GDP#N/A#N/A2024OutturnAPRCOMAPRCOM1=7+8+9Real GDP% change1.24.13.43.42.52Private consumption% change2.32.82.42.52.33Government consumption expenditure% change4.02.32.92.53.64Gross fixed capital formation% change-25.424.322.44.91.45Exports of goods and services% change11.72.31.33.42.86Imports of goods and services% change6.54.33.23.32.7Contributions to real GDP growth 7- Final domestic demandpps-4.85.34.92.01.48- Change in inventoriespps-3.00.00.00.00.09- Net exportspps9.1-1.2-1.41.41.210Output gap% pot GDP-1.2-1.2-0.6-0.9-0.611Employment % change2.72.01.71.51.212Unemployment rate%4.34.24.34.54.413Labour productivity% change-1.42.11.61.91.314HICP % change1.32.11.62.11.415GDP deflator% change3.32.62.72.32.116Compensation of employees per head% change3.54.03.44.03.317Net lending/borrowing vis-à-vis the rest of the world% GDP13.6n.a.9.4n.a.8.520252026Variables 
 
                                 
 
 
 
            
 
 
 
                                 
 
 
Table A1.6:  General government budgetary position 

Source: Commission Spring 2025 Forecast (COM), Annual Progress Report (APR). 

Table A1.7:  Debt developments 

* End of period.  
** The 'snow-ball' effect captures the impact of interest expenditure on accumulated general government debt, as well as the 
impact of real GDP growth and inflation on the general government debt-to-GDP ratio (through the denominator). The stock-flow 
adjustment includes differences in cash and accrual accounting (including leads and lags in Recovery and Resilience Facility grant 
disbursements), accumulation of financial assets, and valuation and other residual effects. 
Source: Commission Spring 2025 Forecast and Commission's calculation (COM), Annual Progress Report (APR). 

32 

2024OutturnAPRCOMAPRCOM1=2+3+4+5Revenue27.824.624.324.324.0of which:2- Taxes on production and imports6.76.66.56.56.43- Current taxes on income, wealth, etc.12.411.911.811.711.54- Social contributions4.34.34.34.44.35- Other (residual)4.41.81.81.71.78=9+16Expenditure 23.523.123.623.323.9of which:9- Primary expenditure22.822.523.022.723.3of which:10- Compensation of employees 6.46.26.46.26.411- Intermediate consumption3.83.73.73.73.712- Social payments8.07.77.87.67.913- Subsidies0.50.50.50.50.514- Gross fixed capital formation2.72.82.83.03.115- Other1.61.61.81.71.716- Interest expenditure0.60.60.60.60.618=1-8General government balance4.31.50.71.00.119=1-9Primary balance4.92.11.31.60.620Cyclically adjusted balance4.9n.a.1.0n.a.0.421One-offs2.60.00.00.00.022=20-21Structural balance2.32.11.01.50.423=22+16Structural primary balance2.92.71.62.11.0Variables (% GDP)202520262024OutturnAPRCOMAPRCOM1Gross debt ratio* (% of GDP)40.937.738.635.938.22=3+4+8Change in the ratio (pps. of GDP)-2.4-3.2-2.3-1.8-0.4Contributions**3Primary balance-4.9-2.1-1.3-1.6-0.64≈5+6+7'Snow-ball' effect-1.3-2.0-1.8-1.5-1.1of which:5- Interest expenditure0.60.60.60.60.66- Real growth effect-0.5-1.6-1.3-1.2-0.97- Inflation effect-1.4-1.0-1.1-0.9-0.88'Stock-flow' adjustment3.90.90.91.31.320252026Variables 
 
                                 
 
 
 
 
                                 
 
 
Table A1.8:  RRF – Grants 

Source: Annual Progress Report. 

Cost of ageing  

Total age-related spending in Ireland is projected to rise from about 12% of GDP in 2024 to 
around 14% in 2040 and about 17% in 2070 (see Table A1.9). This 5 pps increase results from the 
projected  rise  in  pension,  healthcare  and  long-term  care.  Despite  the  upward  trend,  age-related 
expenditure  would  remain  considerably  below  the  EU  average  age-related  spending.  The  pension 
expenditure-to-GDP  ratio  would  rise  from  3.6%  of  GDP  in  2024  to  6.6%  by  2070,  which  would  still 
represent one of the lowest spending levels in the EU.  

Public healthcare (38) expenditure is projected at 4.1% of GDP in 2024 (below the EU average 
of 6.6%, although this is of course affected by the comparability issues of Irish GDP) and is 
expected to increase by 0.7 pps by 2040 and by a further 0.8 pp by 2070. This increase in health 
care  expenditure  contributes  significantly  to  fiscal  risk.  To  improve  the  cost-effectiveness  of  the  health 
system, a Productivity and Savings Taskforce has been set up by the Department of Health and the Health 
Service  Executive.  The  policies  areas  targeted  include  pharmaceutical  expenditure,  non-pay  costs, 
procurement  costs,  the  cost  of  care  in  long-term  residential  care  for  older  people,  and  management 
consultancy costs.  

Public expenditure on long-term care  (39) is projected at 1.2% of GDP in 2024  (below the EU 
average  of  1.7%,  although  this  is  affected  by  the  comparability  issues  of  Irish  GDP)  and  is 
expected to increase by 0.4 pps of GDP by 2040 and by a further 1 pp of GDP by 2070.  

(38)  Key performance characteristics, recent reforms and investments are discussed in Annex 11 ‘Health and health systems’.   

(39)  The quality and the accessibility of the long-term care system are covered in Annex 9 ‘Social policies’. 

33 

Revenue from RRF grants (% of GDP)20202021202220232024202520261RRF grants as included in the revenue projectionsn.a.0.00.00.00.00.00.02Cash disbursements of RRF grants from EUn.a.0.00.00.00.10.00.120202021202220232024202520263Total current expenditure0.00.00.00.00.00.00.04Gross fixed capital formation0.00.00.00.00.00.00.05Capital transfers0.00.00.00.00.00.00.06=4+5Total capital expenditure0.00.00.00.00.00.00.020202021202220232024202520267Reduction in tax revenue0.00.00.00.00.00.00.08Other costs with impact on revenue0.00.00.00.00.00.00.09Financial transactions0.00.00.00.00.00.00.0Expenditure financed by RRF grants (% of GDP)Other costs financed by RRF grants (% of GDP) 
 
                                 
 
 
Table A1.9:  Projected change in age-related expenditure in 2024-2040 and 2024-2070 

Source: 2024 Ageing Report (EC/EPC). 

National fiscal framework 

The Irish Fiscal Advisory Council (IFAC) is a relatively small independent fiscal institution (IFI) 
focusing on the core tasks of IFIs but has an active and innovative communication strategy. It 
has  a  non-Irish  Member  on  the  Board,  a  relatively  active  dialogue  with  Parliament  and  presence  in  the 
media,  but  the  policy  dialogue  with  the  government  could  be  improved.  Appointments  to  the  Board  are 
made by the Minister of Finance, but the short-list is drawn up by a selection Committee, which includes 
the current Chair and an external stakeholder. IFAC undergoes regular external reviews. 

Ireland  has  good  practices  for  the  appraisal  and  selection  of  investment  projects,  while 
practices in capital budgeting and ex-post reviews could be improved. The Investment Guidelines 
set  out  the  value  for  money  requirements  for  the  evaluation,  planning  and  management  of  public 
investment projects in Ireland. For major projects (i.e., projects above EUR 200 million), Ireland reports a 
specific  system  of  independent  expert  reviews  at  two  stages  in  the  project  lifecycle  (40).    Multi-annual 
capital ceilings are updated on a rolling annual basis to extend the framework by one year, while capital is 
appropriated on a yearly basis (41) The National Investment Office uses the MyProjectIreland mapping tool 
and Investment Tracker to report on project/programme delivery, including on consistency and alignment 
within the high-level vision Project Ireland 2040 (42). The Major Capital Projects Tracker details the capital 
investments  due  to  commence  in  the  next  four  years  and  is  updated  following  the  publication  of  the 
National  Development  Plan  (43).  For  all  investment  projects,  the  Public  Investment  Code  requires  the 
Sponsoring Agency to carry out an ex-post evaluation of the project once sufficient time has elapsed for 
the benefits and outcomes to materialise, usually three to five years. Asset registers detailing the state of 
the physical assets are not maintained (44). 

Ireland  is  a  frontrunner  on  green  budgeting,  considering  both  the  revenue  and  expenditure 
sides.  The  country  started  tracking  climate-related  expenditure  for  the  2020  budget  and  has  since 
expanded  its  methodology  to  systematically  quantify  climate  and  environmentally  favourable  and 
unfavourable  expenditures  across  the  six  dimensions  of  the  EU  Taxonomy.  Complementarily,  the  same 
dimensions are analysed for taxes and tax expenditures. To inform budgetary decision-making, an ex-ante 

(40)  Belu Manescu, C. (2024), “The planning of public investments in the EU Member States: long-term strategy, selection and budgeting 

issues.”, European Economy Discussion Paper 213. 

(41)  IMF, 2017, Ireland – Technical Assistance Report – Public Investment Management Assessment 

(42)  Both MyProjectIreland Interactive Map, available in a desktop and mobile phone version, and the Major Capital Projects Tracker (in 
excel  format)  can  be  found  here.  As  of  Q1  2023,  the  Tracker  focuses  on  almost  320  projects  and  140  programmes,  including 
almost 100 projects more than €50 million. 

(43)  Government  of  Ireland.  (2023).  “Project  Ireland  2040:  prospects  2023/2024:  Ireland’s  Major  Infrastructure  Project  Pipeline”, 

document prepared by the Department of Public Expenditure, NDP Delivery and Reform. 

(44)  IMF, 2017, Ireland: Technical assistance report – public investment management assessment, IMF Country Report no. 17/333. 

34 

IE11.61.40.70.4-0.52.013.6IEEU24.30.50.30.4-0.30.925.2EUIE11.63.01.51.4-0.55.316.9IEEU24.30.20.60.8-0.41.325.6EUage-related expenditure 2024 (% GDP)change in 2024-2040 (pps GDP) due to:age-related expenditure 2040 (%GDP)pensionshealthcarelong-term careeducationtotalage-related expenditure 2024 (% GDP)change in 2024-2070 (pps GDP) due to:age-related expenditure 2070 (%GDP)pensionshealthcarelong-term careeducationtotal 
 
   
 
 
climate impact assessment and budget tagging are integrated into the budgetary cycle. For transparency, 
annual reports are published alongside updated methodologies and guidance notes ensuring a consistent 
application of practices. 

Table A1.10:Fiscal Governance Database Indicators 

The Country Fiscal Rule Strength Index (C-FRSI) shows the strength of national fiscal rules aggregated at the country level based 
on i) the legal base, ii) how binding the rule is, iii) monitoring bodies, iv) correction mechanisms, and v) resilience to shocks. The 
Medium-Term Budgetary Framework Index (MTBFI) shows the strength of the national MTBF based on i) coverage of the 
targets/ceilings included in the national medium-term fiscal plans; ii) connectedness between these targets/ceilings and the 
annual budgets; iii) involvement of the national parliament in the preparation of the plans; iv) involvement of independent fiscal 
institutions in their preparation; and v) their level of detail. A higher score is associated with higher rule and MTBF strength. 
Source: Fiscal Governance Database 

35 

2023IrelandEU AverageCountry Fiscal Rule Strength Index (C-FRSI)12.0914.52Medium-Term Budgetary Framework Index (MTBFI)0.670.73 
 
   
 
 
 
 
 
ANNEX 2: TAXATION 

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

It  also  provides 

The Irish tax base is concentrated and relies 
heavily  on  corporate  taxes  from  foreign-
owned enterprises. Total tax revenues increased 
in  2024  by  9.8%  relative  to  2023,  to  reach  EUR 
102.8  billion.  Corporate  tax  revenue  increased  by 
18%  compared  with 2023  to  a  new  all-time  high 
of EUR 28.1 billion, 88% of these receipts coming 
from  foreign-owned  multinationals.  These  figures 
do not include EUR 14 billion one-off revenue that 
Ireland 
to  whom, 
according  to  the  10 September 2024  European 
Court  of  Justice  ruling,  Ireland  unlawfully  granted 
State aid. Most of the revenue resulting from this 
ruling  was  already  transferred  in  2024.  Although 
revenues  from  corporate  taxation  are  relatively 
high 
Ireland,  the  average  forward-looking 
effective  tax  rates  on  corporate  income  were 
6.2 pps  below  the  EU  average  in  2023  (12.7%  in 
Ireland vs an EU average of 18.9%).  

is  collecting  from  Apple, 

in 

Graph A2.1: Tax revenue shares in 2023 

Source: Taxation Trends Data, DG TAXUD 

Ireland’s  labour-tax  burden  is  very  low,  but 
labour  taxation  is  more  progressive.  Ireland’s 
share  of  labour  taxes  as  per  cent  of  GDP  is  not 
even half the EU average, and remains below the 
EU average when adjusted to GNI* (see Table A2.1 
below).  The  labour-tax  wedge  for  Ireland  in  2023 
was  considerably  below  the  EU  average  for 

average  and  lower  wage  levels  (see  Graph  A2.2) 
(45).  In  addition,  second  earners  at  67%  of  the 
average  wage,  whose  spouses  earn  the  average 
wage, were subject to a lower tax wedge than the 
EU  average.  However,  these  second  earners  were 
taxed more heavily than single people at the same 
wage level. The difference between the tax wedge 
for  high-wage  earners  and  low-wage  earners 
(167% and 50% of the average wage) was among 
indicating  the  high 
the 
progressivity  of  the  labour-tax  system.  The  Irish 
tax-benefit  system’s  ability  to  reduce  income 
inequality  as  measured  by  the  Gini  coefficient  is 
the highest of all Member States (see Table A2.1). 

the  EU, 

largest 

in 

Graph A2.2: Tax wedge for single and second 
earners as a % of total labour costs, 2024 

The second-earner tax wedge assumes a 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 

of 

level 

raised 

revenue 

The 
from 
environmental  taxation  in  Ireland  is  far 
below  the  EU  average.  Total  environmental 
taxes  amounted  to  EUR 4.4 billion  in  Ireland  in 
2022, equivalent to 0.9 % of its GDP (EU average: 
2.0%). Energy taxes formed the largest component 
of  environmental  taxes,  accounting  for  0.5%  of 
GDP, which is lower than the EU average of 1.6 %. 
Transport taxes, at 0.4 % of GDP, were around the 
EU  average (0.4 %). Pollution and resources taxes 
account for only 0.4% of environmental taxes, not 
even 0.01% of GDP. There is therefore potential to 
strengthen  the  application  of  the  ‘polluter  pays’ 

(45)  The  tax  wedge  is  defined  as  the  sum  of  personal  income 
taxes  and  employee  and  employer 
social-security 
contributions  net  of  family  allowances,  expressed  as  a 
percentage of total labour costs (the sum of the gross wage 
and social-security contributions paid by the employer). 

36 

51.226.921.941.926.032.1Tax revenue shares in 2023, Ireland (outer ring) and EU (inner ring)Taxes on labourTaxes on consumptionTaxes on capital22.726.335.143.634.02025303540455050100150Tax wedge, % of total labour costsEarnings as % of the average wageSingle earner - IESingle earner - EU averageSecond earner -  IESecond earner -  EU average 
 
     
  
 
 
 
principle. Ireland has only implemented two of the 
six main types of pollution and resources taxes (i.e. 
taxes  on  waste  landfilling  and  plastic  products). 
There  is  still  scope  for  expanding  waste-disposal 
taxes  (including  on  incineration)  and  implement 
the  four  other  types  of  environmental  tax  (i.e. 
taxes  on  NOx  emissions,  waste  discharge  into 
water, fertilisers and pesticides). 

Ireland’s 2025 budget introduced several tax 
measures to support workers, businesses and 
housing.  On  personal-income  tax,  several  tax 
credits were increased by the budget, including the 
personal  tax  credit,  the  employee  tax  credit,  the 
home carer tax credit, the single person child carer 
credit  and 
credit. 
Businesses  tax  credits  and  reliefs  were  also 
increased. Finally, to improve housing affordability 
for individual households, both the rental tax credit 
and mortgage-interest relief were increased, while 
the  vacant-home  tax  was  increased  to  stimulate 
usage  or  sales  of  vacant  homes.  In  addition,  the 
stamp  duty  for  bulk  purchases  of  residential 

incapacitated 

child 

the 

properties was increased from 10% to 15%, aimed 
at curbing large-scale acquisitions of housing that 
limit housing availability for individual buyers.  

In addition, Ireland completed reforms under 
the  Recovery  and  Resilience  Facility  that 
aimed to broaden the country’s tax base and 
increase tax revenue. Those reforms included: (i) 
changing corporate residence rules, abolishing the 
possibility  of  being  incorporated  but  not  tax 
resident  in  Ireland  (‘Double  Irish’)  from  2015  on 
(unless  resident  in  a  treaty  partner  country);  and 
(ii)  amending  the  calculation  rules  for  capital 
allowances  for 
intangible  assets,  which  was 
implemented  through  the  Finance  Act  2020.  On 
environmental taxation, the recovery and resilience 
plan (RRP) includes a measure to increase Ireland’s 
carbon  tax  steadily  by  EUR 7.50 per  tonne  of 
carbon used yearly from 2021 onwards until 2025 
(current level: EUR 63.50). It will be increased until 
EUR 100 by 2030. 

Table A2.1:  Taxation indicators 

(1) Forward-looking effective tax rate (KPMG). 
(2) A higher value indicates a stronger redistributive impact of taxation. 
(*) EU-27 simple average. 
(**) For more details on the VAT gap, see European Commission, Directorate-General for Taxation and Customs Union, VAT gap in 
the EU - 2024 report,  https://data.europa.eu/doi/10.2778/2476549.  
For more data on tax revenues as well as the methodology applied, see the Data on Taxation webpage, 
https://ec.europa.eu/taxation_customs/taxation-1/economic-analysis-taxation/data-taxation_en. 
Source: European Commission, OECD 

37 

IE2010202120222023202420102021202220232024Total taxes (including compulsory actual social contributions) (% of GDP)27.820.120.321.937.840.239.739.0Total taxes (including compulsory actual social contributions) (% of GNI*)32.637.739.638.5Taxes on labour (% of GDP)12.28.58.49.219.820.520.120.0Taxes on labour (% of GNI*)14.316.016.416.1of which, social security contributions (SSC, % of GDP)5.13.13.13.412.913.012.712.7     of which, social security contributions (SSC, % of GNI*)5.95.86.06.0Taxes on consumption (% of GDP)9.95.75.35.710.911.210.910.5Taxes on consumption (% of GNI*)11.610.810.410.0of which, value added taxes (VAT, % of GDP)6.03.73.74.06.87.37.47.1of which, value added taxes (VAT, % of GNI*)7.07.07.27.0Taxes on capital (% of GDP)5.75.86.67.07.18.58.78.5Taxes on capital (% of GNI*)6.711.012.812.4Personal income taxes (PIT, % of GDP)8.76.56.36.88.69.69.49.3Personal income taxes (PIT, % of GNI*)10.212.212.311.9Corporate income taxes (CIT, % of GDP)2.43.44.44.72.22.93.23.2Corporate income taxes (CIT, % of GNI*)2.86.58.58.3Total property taxes (% of GDP)1.41.00.90.91.92.22.11.9Total property taxes (% of GNI*)1.61.91.81.6Recurrent taxes on immovable property (% of GDP)0.80.40.40.41.11.11.00.9Recurrent taxes on immovable property (% of GNI*)0.90.70.80.8Environmental taxes (% of GDP)2.51.10.91.02.52.42.12.0Environmental taxes (% of GNI*)2.92.11.71.7Effective carbon rate in EUR per tonne of CO2 equivalentsNA60.2NA54.8NA86.0NA84.8Tax wedge at 50% of average wage (single person) (*)16.322.822.723.022.733.931.831.531.531.8Tax wedge at 100% of average wage (single person) (*)30.935.935.635.635.140.939.939.940.240.3Corporate income tax - effective average tax rates (1) (*)12.912.712.712.721.319.319.118.9Difference in Gini coefficient before and after taxes and cash social transfers (pensions excluded from social transfers) (2) (*)20.516.415.315.38.68.27.97.7Outstanding tax arrears: total year-end tax debt (including debt considered not collectable) / total revenue (in %) (*)6.34.735.532.6VAT gap (% of VAT total tax liability, VTTL) (**)-1.11.66.67.0IrelandEU-27Tax structureSome tax typesBy tax baseProgressivity & fairnessTax administration & compliance 
 
  
 
Graph A2.3: Outbound foreign direct investment (FDI) income payments from Ireland and the rest of the 
EU-27 relative to the size of their economies (in % of GDP and GNI*, left) and in absolute terms (EUR 
billions, right), 2022 

Source: CSO data, European Commission 

royalty  payments. 

imposed  on  outbound 

To  address  aggressive  tax  planning  (ATP), 
Ireland has reformed its laws on withholding 
interest, 
taxes 
The 
dividends  and 
Commission  has  long  asked  Ireland  to  prevent 
ATP.A19.1  Outbound  payments 
remain  very 
important  for  the  Irish  economy  (Graph  A2.3).  In 
particular,  Ireland  has  higher  outbound  royalty 
payments  than  the  rest  of  the  EU  combined. 
Following Ireland’s RRP, new legislation to prevent 
tax-free  transfers  of  profits  to  non-EU  countries 
via  interest,  royalty  and  dividend  payments  has 
been in  effect  since  April 2024.  This  ensures  that 
outbound  payments  to  associated  entities 
in 
certain jurisdictions are subject to withholding tax. 
These  jurisdictions  include  those  listed  on  the  EU 
list  of  non-cooperative 
tax 
purposes  as  well  as  zero-tax  and  no-tax 
jurisdictions. However, the new legislation does not 
apply where a bilateral tax treaty is in operation. If 
that is the case, additional monitoring will prevent 
non-taxation.  Moreover,  no  low-tax  jurisdictions 
(those  where  corporate-income-tax  rates  are 
between  0%  and  9% (46)  are  included  in  the  new 
legislation.  Finally,  the  definition  of  associated 
entities  does  not 
that  are 
associated  with  the  same  individual  or  connected 
individuals.  To  rectify  this,  a  new  piece  of 
legislation  is  expected  to  be  passed  in  2025.  It 
would  ensure  that  the  definition  includes  entities 
associated with the same individual(s). 

jurisdictions  for 

include  entities 

Legislation  enacted  by  both  Ireland  and  the 
US  has  enhanced  efforts  to  tackle  ATP  in 
recent  years.  Firstly,  Ireland  amended  company 
residence  rules  in  2013  and  2014.  The  reform 
stopped  companies  registered  but  not  managed 
and  controlled  in  Ireland  from  being  used  to 
shelter  the  profits  of  multinationals  to  from 
taxation. Secondly, the US in 2017 enacted the Tax 
Cuts and Jobs Act, which introduced a new top-up 
tax on non-US, low-taxed income deemed to have 
intangible  assets.  This 
been  derived 
legislation 
for 
multinationals  to  re-locate  intellectual  property 
from tax havens all over the world back to the US. 
This  has  resulted  in  a  significant  change  since 
2020  in  the  destination  of  outbound  royalty 
payments from Ireland, with the vast majority now 
going directly to the US.  

from 
created  a 

incentive 

strong 

Further  progress  has  been  achieved 
in 
digitalising  Ireland’s  tax  administration.  The 
2023 annual report on taxation shows that Ireland 
scores  highly  on  filing  tax  electronically,  with 
100%  and  97%  of  corporate-income  and 
personal-income  tax  returns,  respectively,  being 
filed  electronically  (2020)  (47).  Ireland’s  VAT  gap 
(an 
the  effectiveness  of  VAT 
enforcement  and  compliance,  where  a  low  gap 
indicates high effectiveness) decreased to 6.7% in 
2021  (partly  due  to  COVID  effects)  but  remained 
above the EU-wide gap of 5.4%. 

indicator  of 

(46)  In  the  EU,  Hungary  has  the  lowest  corporate  taxation  rate 

(47)  European Commission, Annual Report on Taxation 2023, p. 

(9%). 

146. 

38 

0%5%10%15%20%25%30%35%40%45%50%RoyaltiesDividendsInterestsEU26 as % GDPIE as % of GDPIE as % of GNI*0100200300400500600RoyaltiesDividendsInterests€ billionEU26IE 
 
 
 
       
PRODUCTIVITY 
ANNEX 3: INNOVATION TO BUSINESS  

innovation 

Ireland’s  research  and 
(R&I) 
performance  remains  strong  but  still  faces 
challenges  especially  in  the  level  of  public 
R&D investment. The 2024 European Innovation 
Scoreboard  ranks  Ireland  as  a  ‘strong  innovator’, 
with  performance  at  113.2%  of  the  EU  average 
for  2024,  which  is  above  the  average  for  strong 
innovators  (111.3%).  However,  its  performance 
lead  over  the  EU  is  decreasing  (48).  Ireland’s 
research  intensity  (expenditure  on  R&D  as  a 
percentage of GDP) reached 1.58% in 2023 due to 
an 
in  business  R&D,  but  public 
expenditure  on  R&D,  at  just  0.22%  of  GDP,  is 
among  the lowest  in  the EU.  Ireland  has  however 
business 
made 
digitalisation, performing above the EU average in 
several  areas  in  line  with  its  EU  Digital  Decade 
targets. 

significant 

progress 

increase 

in 

SCIENCE FOR INNOVATIVE 
ECOSYSTEMS 

base, 

science 

Although 
Ireland  has  a  relatively  well-
public  R&D 
developed 
investment remains very low. Overall, Ireland is 
home  to  a  strong  science  base,  as  illustrated  by 
the  share  of  scientific  publications  within  the  top 
10%  most  cited.  This  is  above  the  EU  average 
(11.3% vs 9.6%) but has been declining slightly in 
recent years. The number of researchers employed 
by  the  public  sector  in  terms  of  active  population 
is  also  relatively  high  (5.4  per  thousand  of  the 
active  population  vs  an  EU  average  of  4.2). 
International 
illustrated  by 
Ireland’s increasing share of international scientific 
co-publications  in  terms  of  total  publications, 
which  is  also  above  the  EU  average  (66%  vs 
55.9%).  However,  this  overall  performance  is  put 
at  risk  by  low  R&D  public  expenditure  (0.22%  of 
GDP,  0.4%  of  GNI*  (49)),  which  is  far  below  other 
countries  with  a  similar 
level  of  economic 
development. 

collaboration 

is 

(48)  European 

Commission, 

Scoreboard,  country  profile: 
profile-ie.pdf. 

2024, 

European 

Innovation 
Ireland,  ec_rtd_eis-country-

to 

career 

advice, 

scientific 

for  early 

Strong  research  performance  builds  on  a 
solid  policy  framework  for  R&I  governance. 
Ireland’s  strategic  goal  for  R&I  involves  a  whole-
promoting 
approach 
of-government 
engagement between businesses, higher education 
institutions  and  research  bodies,  as  well  as  with 
the  wider  community  and  internationally.  Key 
elements  include  increasing  Ireland’s  participation 
in  European  Research  Area  policy  development, 
the  government  with  expert-led, 
providing 
advancing 
evidence-based 
support 
researchers  and 
developing  sustainable  research  infrastructures. 
The  overall  aim  is  to  nurture  a  thriving  R&I 
ecosystem  (50).  This  builds  on 
Impact  2030, 
Ireland’s  medium-term  R&I  strategy,  which 
identifies  the  need  for  a  resilient  research  base 
and aims to deliver system-wide impacts and add 
value  to  the  activities  of  R&I  performers  and 
funders  (51).  Overall,  most  of  Impact  2030’s 
flagship  initiatives  are  already  in  the  course  of 
being  delivered  (52).  For  example,  a  new  funding 
agency  for  public  research,  Research  Ireland,  was 
established 
the 
activities  and  functions  of  the  Irish  Research 
Council  (IRC)  and  Science  Foundation 
Ireland 
(SFI)  (53).  

in  2024  and  amalgamates 

Graph A3.1: Public expenditure on R&D as % of 
GDP and GNI* 

Source: Eurostat 

(50)  Statement  of  Strategy  2023-2025  (pp.  21-22),  gov.ie  - 

Statement of Strategy 2023-2025. 

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

(52)  Impact  2030  Progress  Report  2022-2023,  Impact  2030: 

Ireland’s Research and Innovation Strategy. 

(49)  Modified  Gross  National  Income  (GNI*)  largely  excludes 

(53)  Research  Ireland,  Driving  Innovation  &  Research  Funding  - 

globalisation effects that distort GDP in Ireland.  

Research Ireland. 

39 

0.10.20.30.40.50.60.70.80.92012201520172020202120222023EUIEIE (GNI*) 
 
 
 
          
 
 
BUSINESS INNOVATION  

remain. 

Business 

Ireland’s  business  R&D  has  increased  but 
enterprise 
challenges 
expenditure  on  R&D  in  Ireland  has  increased 
significantly,  mainly  through  a  revision  of  data 
that increased business R&D investment to 1.36% 
of GDP in 2023. In terms of the innovation output 
of businesses,  while  patent applications in Ireland 
remain  well  below  the  EU  average  (1.1  vs  EU 
average  of  2.8  per  billion  of  GDP  in  purchasing 
power  standards),  the  share  of  employment  in 
high-growth  businesses  is  double  the  EU  average 
is 
(24.8%  vs  12.5%).  Overall,  while 
in 
significant  high-tech  employment, 
sectors  dominated  by  foreign-owned  companies, 
and  the  increase  in  business  R&D  investment  if 
sustained  is  welcome,  weaknesses  remain  in  the 
wider  business  R&I  ecosystem  that  need  to  be 
addressed,  such  as  a  relatively  low  start-up  rate 
(6.7%  vs  8.9%  EU  average).  Supporting  closer 
economic  links  between  generally  foreign-owned 
firms  and  small  and  medium-sized 
larger 
enterprises  (SMEs)  across  and  within  industries 
could help raise the productivity level of SMEs (54). 
Ireland would also benefit from participating in the 
unitary  patent  system,  which  offers  important 
advantages  in  promoting  innovation  and  boosting 
competitiveness (55). 

there 
largely 

as 

SMEs 

direct 

important  tool  for 
Tax  credits  are  an 
stimulating  firm-level  R&D  investments  in 
Ireland,  but  may  not  be  as  useful  for 
funding 
supporting 
instruments. Tax credits can be effective but, as 
highlighted in Ireland’s current smart specialisation 
strategy, might not be as helpful to start-ups and 
innovative  young  firms  in  emerging  sectors  (56). 
While SMEs continue to constitute most claimants 
of  the  R&D  tax  credit,  large  firms  dominate  in 
terms of the overall cost of the credit and the size 
individual  claims.  Further  measures,  e.g. 
of 
increasing  the  scope  for  outsourcing  research 
activities  and  expanding  eligibility  limits,  could 

(54)  OECD  Economic  Survey  Ireland  2022  (pages  39-40)  OECD 

Economic Surveys: Ireland 2022 | OECD. 

(55)  Ireland  is  expected  to  join  by  ratifying  the  Unified  Patent 

Court Agreement, which it has already signed. 

encourage greater SME engagement with the R&D 
tax  credit  (57).  Increased  use  of  direct  funding 
instruments  could  also  help  to  stimulate  R&I  and 
improve the productivity of firms, especially start-
ups and SMEs. 

is 

To 

support 

72.9%). 

R&D  business  expenditure  in  the  ICT  sector 
accounted 
total  R&D 
for  42.98%  of 
expenditure  in  2021.  Ireland  excels  in  cloud 
computing  adoption  (53.1%  vs  38.9%)  and  data 
analytics  usage  (37.1% vs  33.2%),  demonstrating 
its leadership in advanced technologies. In 2024, it 
surpassed  the  EU  average  in  AI  adoption  (14.9% 
vs  12.6%),  while  SMEs  with  at  least  a  basic  level 
of  digital  intensity  accounted  for  73.4%  (EU 
average 
digital 
transformation,  Ireland  is  making  use  of  its 
recovery  and 
resilience  plan  and  national 
initiatives.  The  Digital  Transition  Fund  provides 
targeted  funding  to  drive  SME  digitalisation, 
focusing on technology adoption and supply chain 
innovation.  Additionally, 
is  actively 
promoting 
through  four  European 
Digital  Innovation  Hubs.  They  provide  businesses 
advanced 
with 
technologies.  Initiatives  such  as  the  SME  Data 
Migration  Pilot  by Data2Sustain, managed  by  one 
of  these  hubs,  focus  on  helping  businesses 
cloud-based  storage  systems, 
transition 
illustrating the operational impact of these hubs. 

innovation 

expertise 

Ireland 

access 

and 

to 

to 

the 

Business-science linkages in Ireland are well 
developed but display some weaknesses.  The 
number  of  public-private scientific  co-publications 
as  a  percentage  of 
total  number  of 
publications  is  above  the  EU  average  (9.6%  vs 
7.7% in 2023). However, researchers employed by 
businesses  per  thousand  of  the  active  population 
is  below  the  EU  average  (4.9%  vs  5.7%).  Ireland 
has  a  wide  range  of  actions  designed  to  improve 
business-science  linkages  such  as  direct  support 
schemes including innovation vouchers, technology 
centres  that  develop  interactions  with  companies 
for knowledge transfer and the flagship Disruptive 
Technologies Innovation Fund. Also, the Knowledge 
Transfer  Boost  (58)  and  Technology  Gateways  (59) 
programmes,  supported  by  EU  cohesion  funding, 
improve  knowledge  transfer 
are  designed  to 

(57)  National  Competitiveness  and  Productivity  Council,  Ireland’s 
Competitiveness  Challenge  2024  (pages  90-92)  Ireland's 
Competitiveness Challenge 2024 - Competitiveness. 

(56)  National  smart  specialisation  strategy  for  innovation  2022-
(p.  79)  national-smart-specialisation-strategy-for-

2027 
innovation-2022-2027.pdf (enterprise.gov.ie). 

(58)  KT Boost - Knowledge Transfer Ireland. 

(59)  Enterprise Ireland Technology Gateway Network 

40 

 
 
 
outputs  across  the  R&I  ecosystem.  The  2023 
Annual Knowledge Transfer Survey reveals positive 
trends,  including  in  R&D  collaborative  projects, 
licensing,  the  creation  of  spin-offs  and  new  R&D 
consultancy agreements (60).  

in higher education across different courses is still 
limited,  though  efforts  to  boost  this  area  are 
underway.  Additionally,  implementing  innovative 
pedagogies  and  a  more  systematic  evaluation  of 
entrepreneurship  skills  and 
impact  of 
education could boost this area. 

the 

FINANCING INNOVATION  

The availability of risk capital in Ireland falls 
slightly short of the EU average. In 2023, the 
value  of  private  equity  investments  amounted  to 
0.2%  of  GDP,  falling  below  the  EU  average  of 
0.4%,  as  it  did  in  most  of  the  previous  years.  On 
the  other  hand,  Ireland  performed  better  on 
venture  capital  investments,  registering  0.4%  of 
GDP in 2023, just below the EU average of 0.5%, 
and achieving higher relative values than in some 
of the previous years.    

INNOVATIVE TALENT  

Skills  in  the  domain  of  R&I  are  relatively 
strong and continue to be developed. Ireland’s 
National  Skills  Strategy  includes  a  number  of 
objectives  relating  to  R&I  such  as  increased 
support  for  postgraduate  researchers  to  address 
demand  in the  economy, and  growing  support  for 
the  bilateral  exchange  of  researchers  between 
academia  and  industry (61).  This  can  build  on 
existing  strengths  such  as  the  share  of  new 
graduates in science and engineering per thousand 
of the population, which is significantly above the 
EU  average  (26.5  vs  17.6),  and  graduates  in  the 
field  of  computing,  which  is  nearly  four  times 
above the EU average (12.3 vs 3.6).  

Entrepreneurship education is a key objective 
in  Irish  national  policy,  although  further 
integration  is  needed  in  higher  education.  
Entrepreneurship  education  is  integrated  into  the 
curricula,  for  instance  generally  in  secondary 
schools  or  as  a  separate  subject  in  secondary 
business  studies  or  in  higher  education  courses. 
Nevertheless,  the  integration  of  entrepreneurship 

(60)  Knowledge  Transfer 
Survey-2023.pdf. 

Ireland,  Annual-Knowledge-Transfer-

(61)  Ireland’s  National  Skills  Strategy  2025,  gov.ie  -  Ireland’s 

National Skills Strategy. 

41 

 
 
Table A3.1:  Key innovation indicators 

(1)  EU average for the last 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 EU 

42 

EUUSA20232024average (1)R&D intensity (GERD as % of GDP)1.551.211.121.071.531.58:2.243.45R&D intensity (GERD as % of GNI*)2.132.022.162.082.992.77:::Public expenditure on R&D as % of GDP0.430.310.230.210.190.22:0.720.64Public expenditure on R&D as % of GNI*0.590.520.440.410.370.39:::Scientific publications of the country within the top 10% most cited publications worldwide as % of total publications of the country 12.511.611.311.3:::9.612.3Researchers (FTE) employed by public sector (Gov+HEI) per thousand active population5.85.25.45.565.4:4.2:International co-publications as % of total number of publications51.659.663.263.964.766.1:55.939.3Business enterprise expenditure on R&D (BERD) as % of GDP1.110.90.890.861.341.36:1.492.7Business enterprise expenditure on R&D (BERD) as % of GNI*1.531.501.711.672.612.38:::Business enterprise expenditure on R&D (BERD) performed by SMEs as % of GDP:0.33:0.32:::0.400.30Business enterprise expenditure on R&D (BERD) performed by SMEs as % of GNI*:0.55:0.62:::::Researchers employed by business per thousand active population4.25.55.85.04.74.9:5.7:Patent applications filed under PCT per billion GDP (in PPS€)2.31.71.71.21.1::2.8:Employment share of high-growth enterprises measured in employment (%)14.0124.74:::::12.51:SMEs with at least a basic level of digital intensity% SMEs (EU Digital Decade target by 2030: 90%)::::74.05:73.3872.91:Data analytics adoption% enterprises (EU Digital Decade target by 2030: 75%):::::37.09:33.17:Cloud adoption% enterprises (EU Digital Decade target by 2030: 75%):::47.39:53.07:38.86:Artificial intelligence adoption% enterprises (EU Digital Decade target by 2030: 75%):::7.88:8.0114.913.48:Public-private scientific co-publications as % of total number of publications8.910.19.39.009.39.6:7.78.9Public expenditure on R&D financed by business enterprise (national) as % of GDP0.0080.010:0.007:::0.0500.020Public expenditure on R&D financed by business enterprise (national) as % of GNI*0.0110.017:0.014:::::Total public sector support for BERD as % of GDP0.2260.194:0.202:::0.2040.251Total public sector support for BERD as % of GNI*0.3110.324:0.393:::::R&D tax incentives: foregone revenues as % of GDP0.1590.1450.1720.1680.222::0.1020.141R&D tax incentives: foregone revenues as % of GNI*0.2190.2420.3310.3270.433::::Business enterprise expenditure on R&D (BERD) financed by the public sector (national and abroad) as % of GDP 0.0660.049:0.034:::0.1000.110Business enterprise expenditure on R&D (BERD) financed by the public sector (national and abroad) as % of GNI*0.0910.082:0.066:::::Venture Capital (market statistics) as % of GDP, Total0.0380.0490.070.0510.0640.055:0.078:Venture Capital (market statistics) as % of GNI*, Total0.0520.0820.1350.0990.1250.096:::Seed stage funding share (% of Total VC)1.417.65.25.66.37.8:7.3:Start-up stage funding share (% of Total VC)57.154.559.469.558.054.0:44.0:Later stage funding share (% of Total VC)41.427.935.324.935.738.2:48.7:New graduates in science and engineering per thousand population aged 25-3419.220.025.626.226.5::17.6:Graduates in the field of computing per thousand population aged 25-342.48.712.412.412.3::3.6:Headline indicatorPublic science for robust innovative ecosystemsBusiness innovation: Investment & researchers employedBusiness innovation enablers: Public support for business innovationBusiness innovation: Innovation outputsBusiness innovation: Technology performance and diffusion20222021Ireland201220172020Business innovation enablers: Academia-business collaborationBusiness innovation enablers: Financing innovationBusiness innovation enablers: Innovative talent 
 
 
 
  
 
ANNEX 4: MAKING BUSINESS EASIER 

Ireland’s  economic  prosperity  is  intricately 
linked  to  the  multinational  sector’s  growth, 
which  has  slowed  alongside  the  global 
economy.  The  current  geopolitical  landscape  and 
rising  protectionist  industrial  policies  could  pose 
considerable  challenges  for  Ireland’s  key  sources 
of  foreign  direct  investment  (FDI).  Ireland’s  new 
government 
several 
important  initiatives  focused  on  competitiveness 
and  SMEs.  If  implemented,  they  would  have  an 
important impact on challenges in this annex.  

programme 

contains 

Economic framework conditions 

Ireland’s corporation tax receipts are heavily 
concentrated  and  therefore  risky.  The  top 
three  companies  account  for  38%  of  total 
corporation tax revenue (62). According to the Fiscal 
Council,  extraordinary  corporation  tax  receipts  are 
keeping  the  public  finances  in  surplus.  Even  when 
the Apple case money is excluded, corporation tax 
receipts  have  almost  tripled  since  2019  and  is 
expected to account for 29% of total tax revenue 
in  2024.  Over  92%  of  inward  FDI  came  from  the 
USA  in  2024(63)  and  this  remains  heavily  focused 
the  digital  and  electronics,  and  health 
on 
(pharmaceuticals)  sectors.  A  hit  to  these  key 
sectors  could  therefore  have  a  massive  impact. 
Several  factors  affect  Ireland’s  attractiveness  to 
foreign  investors  but  maintaining  a  competitive 
cost  of  doing business  and  supportive  regulations 
are key to Irish competitiveness.  

Firms  operating  in  Ireland  have  a  positive 
investment  outlook.  21%  of 
firms  were 
expecting  to  increase  investment  in  2024  (higher 
than  the  EU  average  14%).  The  most  frequently 
mentioned  long-term  barriers  to  investment  are 
energy  costs  (91%),  availability  of  skilled  staff 
(91%) and uncertainty about the future (70%) (64). 
Infrastructure  gaps  are  also  a  barrier  as  they 
increase  costs  for  businesses.  Housing  shortages 
can  be  a  barrier 
raising 
accommodation costs and wages. 

to  enterprises, 

Labour  shortages  and  high  energy  costs  are 
hampering  SMEs.  Ireland  allocates  less  funding 

(62)  Understanding  Ireland’s  Top  Corporation  Taxpayers  –  Irish 

Fiscal Advisory Council. 

(63)  Commission sources. 
(64)  EIB Investment Survey Country Overview 2023-Ireland. 

than  other  advanced  economies  to  support  SMEs 
and young firms, dedicating only 0.02% of GDP to 
these  areas  (compared  with  the  benchmark  of 
0.25%) (65) (66).  

areas 

remain 

adoption 

Ireland  has  made  significant  advances  in 
digital  connectivity.  Efforts  are  focused  on 
achieving  the  EU  Digital  Decade  targets  (67), 
although  deployment  of  mid-band  5G  and 
cybersecurity 
for 
improvement.  Coverage  of  fibre  to  the  premises 
(FTTP) increased to 78.5% in 2023 (above the EU 
average  of  64%).  Rural  FTTP  coverage  also 
improved,  reaching  62.7%  (the  EU  average  was 
52.7%).  Ireland’s  national  broadband  plan,  which 
was supported by the recovery and resilience plan 
(RRP),  facilitated  the  connection  of  over  205 000 
premises in 2023, including ten islands and many 
underserved  areas.  Under  the  same  plan,  very 
high-capacity  network  (VHCN)  coverage  reached 
87%  (the  EU  average  was  78.8%)  and  5G 
coverage  reached  85.3%  (the  EU  average  was 
89.3%).  Progress  in  deploying  5G  on  the  3.4-3.8 
GHz spectrum band has been slower (from 56% in 
2022  to  56.6%  in  2023)  and  this  has  limited  the 
delivery of ultra-high-speed mobile services. 

Enterprises’  awareness  of  cybersecurity 
remains  an  area  of  focus.  The  percentage  of 
enterprises  that  reported 
ICT  security-related 
incidents  leading  to  unavailability  of  ICT  services 
due to attacks from outside (e.g. ransomware and 
denial of service attacks) fell from 2% in 2022 to 
1.22%  in  2024.  However,  the  percentage  of 
enterprises implementing at least one ICT security 
measure  (86.2%)  was  below  the  EU  average 
(92.8%).  69.2%  of  enterprises  have  policies  to 
make employees aware of ICT security obligations 
(above  the  EU  average  of  59.97%).  Ireland’s 
includes 
National  Cyber  Security  Strategy 
initiatives 
the  National  Cyber 
to  strengthen 
Security  Centre  and  establish  a  Counter-
Ransomware Task Force to increase resilience and 
address vulnerabilities. 

(65)  OECD,  Quantifying 

Industrial  Strategies 

(QuIS),  benchmarking 

countries. 

(66)  Irish GDP is distorted by the presence of multinationals. 

(67)  The  Digital  Decade  Policy  Programme  sets  out  a  pathway  for  the 
EU’s  digital  transformation,  including  commitments  from  Member 
States to common objectives and digital targets by 2030. 

43 

 
 
 
 
 
Graph A4.1: Making Business Easier: selected 
indicators. 

digitalisation and fragmented information systems 
hinder court performance (68). 

The  percentage  of 
firms  experiencing 
material supply constraints was much higher 
than  the  EU  average  in  2023  (40.8%  vs 
17%).  The  main  concerns  relate  to 
labour 
shortages,  with  37.5%  of  Irish  firms  reporting 
constraints  (compared  with  20%  in  the  EU).  This 
phenomenon 
in  the 
construction sector. This along with the escalating 
costs of construction materials (particularly timber, 
concrete  and  cement,  and  steel)  are  severely 
impacting 
is 
characterised  by  high  demand  and  insufficient 
supply. 

Ireland’s  housing  market,  which 

is  particularly  prevalent 

Single Market 

Ireland  can  further  integrate  into  the  Single 
Market.  Over  the  past  five  years,  Irish  intra-EU 
trade has consistently been below the EU average, 
comprising  about  36%  of  its  GDP  (63%  of  GNI* 
and EU 43%). While Ireland outperforms many EU 
Member  States 
(17% 
in  service 
compared  to  the  EU  average  of  15%),  intra-EU 
trade  in  goods  constituted  only  18%  in  2023, 
compared with the EU average of 28%. 2024 SAFE 
data  indicate  that  65%  of  exporting  SMEs  export 
to  the  euro  area  (below  the  EU  average  of  89%). 
By contrast, 82% of Irish exporting SMEs export to 
the UK and 83% to North America.  

integration 

Ireland implements Single Market rules more 
than  the  EU  average.  The  transposition  deficit 
for  Single  Market  directives  (i.e. directives  not 
transposed  into  national  legislation  on  time)  and 
the  conformity  deficit  (i.e. directives  that  are 
wrongly  transposed)  are  both  better  than  the  EU 
average.  In  2024  the  number  of  infringement 
proceedings  related  to  Single  Market  issues  (20) 
was  lower  than  the  EU  average  of  twenty-four. 
Ireland  resolved  88.9%  of  the  SOLVIT  cases  it 
managed  as  the  lead  centre  in  2024  (the  EU 
average was 84.9%). 

(68)  For  more 

information,  please  see  the  annex  on  effective 

institutional framework. 

44 

Share of (1) enterprises, (2) average intra-EU exports and 
imports in GDP, (3) SMEs. 
Source: (1) EIB IS, (2) Eurostat, (3) SAFE survey. 

Regulatory and administrative 
barriers 

Ireland has a competition-friendly regulatory 
framework,  ranked  4th  in  the  2024  IMD  World 
Competitiveness  Report.  This  was  a  slight  decline 
from  2023  (2nd)  but  an  improvement  on  2022 
(11th).  Challenges 
infrastructure 
remain 
delivery,  primarily  due  to  planning  bottlenecks, 
with Ireland ranking 17th for overall infrastructure 
and  38th 
infrastructure.  Regulatory 
obstacles  hinder  entrepreneurial  activity  and 
innovation, particularly in the service sector. 

in  basic 

in 

and 

legal 

costs 

Increasing 
lengthy 
proceedings  affects  business  confidence. 
Companies  trust  Ireland’s  legal  system  but  have 
concerns 
court 
proceedings,  partly  due  to  pandemic  related 
legal  costs.  Low 
backlogs,  and 

increasing 

prolonged 

regarding 

both 

44.313.638.222.647.916.641.624.50102030405060from private entitiesfrom public entitiesEU Trade IntegrationRegulation as a majorobstacle to investment(3) Late payments(2) Single Market(1) RegulatoryburdenShare (%)EU27IE 
       
 
financing  has  been  on  a  downward  trend  year  on 
year over the past decade, falling from a peak of 
39% in 2012 to 18% by the end of 2023 (71). The 
contraction  in  traditional  financing  demands  on 
the part of SMEs has partly been compensated by 
the  government’s  wide-ranging  support  through 
agencies  such  as  Enterprise  Ireland  and  the 
Strategic  Banking  Corporation  of  Ireland  (SBCI) 
increasingly, 
through  a  growing  non-banking 
finance market.  

Irish SMEs suffer from late payments. Around 
42%  experienced  late  payments  in  the  last  six 
months  and  payment  delays  of  over  two  weeks 
(from  both  public  (18 days)  and  private  (16 days) 
sources). Delays in payments to Irish business can 
hamper  their  ability  to  operate  and  invest  in  the 
future.  On  average, there is  a  gap  of  14 days  for 
business-to-business  payments  and  17 days  for 
payments  from  the  public  sector  (both  are  longer 
than the EU average of 15.6 and 15.1 days).  

Public procurement  

Competition in public procurement is healthy 
is 
in  Ireland.  The  share  of  direct  awards 
significantly  below  the  EU  average  (1%  vs  8%) 
and  so  is  the  share  of  single  bids (16%  vs  29%). 
The Irish government’s long-term vision for public 
procurement  is  to  enable  sustainable,  innovative, 
transparent, 
public 
procurement. This is to be aided via a new national 
public 
prioritising 
procurement  aimed  at  minimising  environmental 
impact  and  increasing  the  delivery  of  community 
benefit, 
SME 
participation  in  public  procurement,  and  enabling 
Ireland’s transition to the circular economy. 

cost-effective 

procurement 

supporting 

innovation 

strategy 

and 

and 

Digital  public  procurement  in  Ireland  is  at  a 
promising  stage  of  development.  A  recent 
OECD  study  concluded  that  the  state  of  digital 
public  procurement  in  Ireland  shows  promising 
future  (69).  This  includes  the  mature  use  of  an  e-
procurement  system  for  the  tendering  phase  of 
the procurement lifecycle, as well as a supportive 
policy framework that encourages the use of data 
and  the  digital  transformation  of  government 
processes  and  services.  There  are  gaps  in  areas 
like the pre-tender and post-tender phases and the 
use  of  data  across  the  procurement  system.  The 
adoption 
public 
procurement  remains  limited.  There  is  no  unified 
national approach, methodology or tool to monitor 
the social impacts of procurement. 

responsible 

socially 

of 

Access to finance – scale-up 

Finance  remains  a  significant  cost  for 
businesses,  particularly  SMEs.  The  cost  of 
borrowing  for  Irish  business  has  long  been  above 
the  euro  area  average  and  one  of  the  highest  in 
the  EA  (70).  There  are  now  only  three  fully 
operating banks in the market following the exit of 
Ulster Bank and KBC, so there are fewer financing 
options for SMEs and the lack of competition may 
further push up borrowing costs. Demand for bank 

(69)  The Digital Transformation of Public Procurement in Ireland: 
A  Report  on  the  Current  State  |  OECD  Public  Governance 
Reviews | OECD iLibrary. 

(70)  ECB 

Dashboard   

(71)  gov.ie  -  SME  Credit  Demand  Survey  –  January  2023  –

https://data.ecb.europa.eu/data/datasets/MIR/dashboard. 

December 2023. 

45 

 
 
 
Table A4.1:  Making Business Easier: indicators. 

*Change in methodology in 2024: reporting late payments from public and private entities separately. 
**Data on single bids for 2024 is provisional and subject to revision. Please note that approximately 98% of the total data is 
currently missing, which may impact the accuracy and completeness of the information. Due to missing data, the EU average of 
direct awards data is calculated without Romania. 
Source: (1) ECFIN BCS, (2) Eurostat, (3) EIB IS, (4) Digital Decade Country reports, (5) Intrum Payment Report, (6) SAFE survey, (7) 
OECD, (8) up to 2023: Single Market and Competitiveness Scoreboard, 2024: Public procurement data space (PPDS). 

46 

POLICY AREA20202021202220232024EU-27 average13.638.552.040.8-10.09.224.846.837.5-20.20.71.31.61.11.02.38.113.816.812.312.113.4-78.383.887.0-78.8-62.272.178.5-64.0-72.183.985.3-89.3Regulatory environment13.418.48.813.422.624.516.013.813.914.714.015.625.511.418.517.917.415.1from public or private entities in the last 6 months39.334.938.642.6--from private entities in the previous or current quarter----44.347.9from public entities in the previous or current quarter----13.616.631.633.136.336.438.241.60.0420.0420.0420.0420.0460.0501.32.21.20.50.40.81.31.21.61.50.80.987.087.091.987.088.984.923.018.022.023.020.024.41415211616-241117.0IrelandINDICATOR NAMEInvestment climateShortagesMaterial shortage, firms facing constraints, %1Labour shortage, firms facing constraints, %1Vacancy rate, vacant posts as a % of all available ones (vacant + occupied)2InfrastructureTransport infrastructure as an obstacle to investment, % of firms reporting it as a major obstacle3VHCN coverage, %4FTTP coverage, %45G coverage, %4Reduction of regulatory and administrative barriersImpact of regulation on long-term investment, % firms reporting business regulation as a major obstacle3Late paymentsPayment gap - corporates B2B, difference in days between offered and actual payment5Payment gap - public sector, difference in days between offered and actual payment5Share of SMEs experiencing late payments, %*6Single MarketIntegrationEU trade integration, % (Average intra-EU imports + average intra EU exports)/GDP2EEA Services Trade Restrictiveness Index7ComplianceTransposition deficit, % of all directives not transposed8Conformity deficit, % of all directives transposed incorrectly8SOLVIT, % resolution rate per country8Number of pending infringement proceedings8Competition and transparency in public procurementSingle bids, % of total contractors**8Direct awards, %**8Public procurement 
 
 
 
 
       
 
ANNEX 5: CAPITAL MARKETS, FINANCIAL STABILITY AND ACCESS TO FINANCE 

Graph A5.1: Net savings-investment balance 

Source: AMECO 

then, 

negative 

the  NIIP  has 

recent 
an 

Despite 
improvements, 
Ireland 
net 
overall 
maintains 
international  investment  position  (NIIP).  Due 
to strong investment inflows, Ireland accumulated 
a deeply negative NIIP, hitting  -190.6% of GDP in 
improved 
2019.  Since 
significantly  to  -82.5%  in  2024,  thanks  to  the 
current account surpluses in the most recent years. 
Most  of  the  foreign  investment  in  Ireland  comes 
as  portfolio 
investment  with  an  outstanding 
balance  of  11-times  GDP.  The  country’s  NIIP  is 
heavily  influenced  by  the  activities  and  balance 
the 
sheets  of  multinational  companies  and 
country’s position as a major financial centre. Most 
of  the  constituent  entities  have  limited  links  to 
Ireland’s domestic economy, which in turn reduces 
domestic exposure and vulnerabilities.  

Graph A5.2: International investment position 

Source: ECB 

and 

households.  Overall, 

Ireland  is  an  important  financial  centre 
Its 
mediating  international  capital  flows. 
financial institutions can be grouped into: (i) those 
that  have  an 
focus  such  as 
international 
investment  banks,  money-market  funds  and 
investment funds; and (ii) those that cater to Irish 
businesses 
Irish 
businesses appear to be content with their access 
to  finance.  Irish  businesses  have  deleveraged 
substantially since the financial crisis in 2008, and 
more than half of Irish SMEs recently reported not 
having any bank debt. The Irish stock exchange is 
a  global  hub  for  bond  and  fund  listings,  but  the 
number  of  equity  listings  is  small  as  many  Irish 
companies have chosen to list overseas instead of 
in  their  home  market.  Households’  level  of  direct 
participation  in  financial  markets  is  low,  as  they 
hold  most  of  their  financial  wealth  in  insurance 
and pension funds. Growth capital for investments 
in  innovative  companies  is  slightly  less  available 
than  in  the  EU  on  average.  Financial  literacy  is 
above EU average but could be improved in certain 
parts of the population. The government published 
its  National  Financial Literacy Strategy for Ireland 
in February 2025. 

Availability and use of domestic 
savings 

Ireland  has  been  net  exporter  of  capital  
since  2021.  Ireland’s  saving  and  investment 
balance,  which  is  equal  to  the  current  account, 
stood  at  6.4%  of  GDP  in  2023,  showing  that 
Ireland’s  aggregate  savings  exceeded  domestic 
investment  needs  and  the  surplus  had  to  be 
invested overseas. While Ireland’s aggregate gross 
private savings rate averaged 32% relative to GDP 
in  the  last  decade,  the  net  savings  rate  after 
deducting  capital  depreciation,  stood  at  8.3%  of 
GDP.  Private  investment  was  exceptionally  strong 
in 
in  2019 
investments  of  intellectual  property,  it  but  fell 
sharply  thereafter  as  the  pandemic  curtailed 
construction  activity  and  severely  impacted  the 
aircraft  leasing  business,  which  is  very  important 
for  Ireland.  Depreciation  of  the  capital  stock even 
exceeded  overall  investments  in  2021  and  2022 
and  net 
investments  turned  negative,  before 
in  2023. 
recovering  tepidly  to  single  digits 
Government finances delivered a surplus over the 
most  recent  years  contributing  positively  to  total 
national savings.  

temporary  spike 

thanks 

to  a 

47 

-20-10010203040502017201820192020202120222023% of GDPPrivate investment, netLending to the governmentPrivate saving, netPrivate saving, grossBorrowing from the rest of the world-2500-2000-1500-1000-500050010001500200020172018201920202021202220232024-Q3% of GDPForeign Direct Investment, AssetsPortfolio Investment, AssetsOther investment, AssetsOfficial reserve assetsForeign Direct Investment, LiabilitiesPortfolio Investment, LiabilitiesOther investment, LiabilitiesNIIP 
 
  
  
 
 
Structure of the capital markets and 
size of the financial sector 

Ireland-based 

In  recent  years,  Ireland  has  emerged  as  a 
significant 
international  financial  centre, 
particularly  for  investment  banks,  money-
market funds, and investment funds. Many of 
the 
institutions  have 
financial 
therefore  only  limited  exposures  to  the  Irish 
economy.  Their  assets  and  liabilities  are  located 
outside Ireland and they offer services on a cross-
border  basis.  Ireland’s  non-bank  financial  sector 
has grown rapidly over the past years, reaching an 
asset volume of roughly  EUR 6.1 trillion in assets 
in mid-2024. The sector is composed of a diverse 
set  of  institutions:  investment  and  money  market 
funds, 
non-securitisation 
vehicles,  as  well  as  other  financial  institutions, 
which  are  mainly  treasuries  of  non-financial 
corporations.  

securitisation 

and 

Euronext Dublin, formerly known as the Irish 
Stock  Exchange,  has only  a  small  number  of 
stock  listings,  but  is  an  important  trading 
venue  for  debt  securities  and  investment 
funds. The Dublin Stock exchange became part of 
the  Euronext  group  in  2018  (72).  Euronext  Dublin 
has  established  itself  as  the  largest  listing  venue 
for  bond  and  fund  listings  in  the  world.  Its  stock 
market  itself  is  quite  small.  The  number  or 
companies  listed  has  been  declining  over  recent 
years  and  only  29  companies  had  their  equity 
listed  on  Euronext  Dublin  in  March  2025.  Many 
Irish  companies  have  chosen  to  list  abroad,  in 
many  cases  in  third  countries  in  the  expectation 
that  this  would  facilitate  market  access.  The 
outstanding listed equity – domestically or abroad 
- of Ireland’s non-financial corporations amounted 
to 192.2% of GDP in 2023.  

Resilience of the banking sector 

The  Irish  banking  sector  consists  of  a  small 
number 
international 
investment  banks,  which  have  two  different 

retail 

and 

of 

business models. Ireland has two types of banks: 
investment  banks,  and 
internationally-oriented 
retail  banks  serving  the  domestic  market.  About 
half of the banking sector’s assets are held by the 
three retail banks that cater to Ireland’s domestic 
clients.  Ireland’s  investment  banks,  on  the  other 
hand,  have  a  very  different  risk  profile.  Their 
clients are mainly large multinational corporations, 
whom  they  serve  from  their  Irish  base.  They  also 
serve  the  country’s  investment-fund  industry  by 
providing  custody,  fiduciary  and  post-trading 
services.  The  sector  has  grown  significantly  over 
the past years, also as those institutions looked for 
a  new  EU  footing  after  the  UK  left  the  EU.  By 
nature of their business, they have a very low NPL 
ratio (1.1%). 

Graph A5.3: Capital markets and financial 
intermediaries 

Source: ECB, EIOPA, AMECO 

Irish  retail  banks  have  successfully  worked 
out  most  of  their  legacy  non-performing 
exposures  (NPEs)  since  the  financial  crisis, 
and lowered their non-performing loan (NPL) 
ratios to the EU average. The financial crisis of 
2008-2012  left  Irish  banks  with  large  stocks  of 
NPLs,  but  these  have  largely  been  worked  out  by 
now.  After  the  retail  banks’  NPL  ratio  peaked  at 
31.9%  in  2014-Q1,  they  reduced  their  NPEs 
mainly through portfolio sales and securitisations. 
By the end of 2024 their NPL ratio had dropped to 
1.9% (73), 0.5ppt lower than a year earlier and also 
below the EU-average of 2.0%. NPLs on household 
loans  stood  at  2.2%,  after  steady  declines  in 

(72)  Euronext  maintains  seven  exchanges, 

four  securities 
depositories  and  one  clearing  house,  and  a  single  trading 
system that works across all markets. 

(73)  The aggregate NPL ratio for the entire sector and all lending 
segments  stood  at  1.2%  compared  with  an  EU  average  of 
1.9%.  Thanks  to  their  business  model,  investment  banks 
have generally very low NPL ratios.  

48 

Non-financial corporationsFinancial corporationsNon-financial corporationsMFIsInsurance  and pension fundsOther financialsGovernmentMFIs​Insurance corporationsInvestment funds0100200300400500600700800     Shares                           Bonds                        Assets by sector% of GDP 
 
   
 
to 

years  due  mainly 

earlier 
sales  and 
restructurings. Loans to non-financial corporations 
(NFCs)  were  affected  severely  by  the  pandemic, 
but  asset  quality  improved  over  the  course  of 
2023, with NPLs declining from 5.5% at end-2022 
to  3.9%  at  in  Q3  2024  vs  EU-average  of  3.6%. 
Provisioning  levels  of  31.4%,  although  recently 
increasing, remain below the EU average of 42.4% 
in  September  2024,  especially  for  NFCs.  These 
lower  provisioning  levels  can  partly  be  attributed 
to  the  higher  proportion  of  loans  secured  by 
collateral and the more prevalent use of calendar 
provisioning,  i.e.  deducting  expected  future  losses 
directly  from  regulatory  capital,  rather  than 
increasing reported provisions.  

The  rise  in  interest  rates  helped  domestic 
retail banks to increase interest margins and 
significantly  improved  their  profitability  in 
2023  and  2024.  Aggregate  profits  increased  to 
EUR  4.0  bn  in  2024,  from  EUR  1.87  bn  a  year 
earlier. Annualised return on equity reached 14.1% 
in  the  year  to  September  2024,  exceeding  the 
already  buoyant  returns  of  12.4% 
in  2023. 
Meanwhile,  the  annualised  return  on  assets  was 
1.3%,  compared  to  1.2%  in  2023.  Improved 
profitability was largely thanks to Improved higher 
net interest income, which grew by  EUR 0.2  bn to 
EUR 8.3 bn in 2024, driven by larger loan volumes 
and  widening  lending  margins,  and  the  large 
amount of excess liquidity held on deposit with the 
ECB.  Net  fee  and  commission  income  also  grew, 
while operating costs rose at a much slower pace 
than revenues. The increase in operating costs can 
largely  be  attributed  to  staff  expenses  but  banks 
also reported the highest loan loss provisions since 
2020. The profitability outlook appears less bright 
given  the  potential  pressure  of  higher  deposit 
rates and the risk of adverse credit developments. 
Banks’ capacity to effectively curb their structural 
costs  will  be  critical  for  ensuring  sustainable 
future  profitability,  especially  in  a  lower  interest 
rate environment. (A5.1). 

The  quality  of  mortgages  remains  solid,  but 
the  commercial  property  sector  continues  to 
face  strong  headwinds.  The  Irish  residential 
property  market  remains  very  tight,  with  supply 
shortages  supporting  house  prices  and  thus 
mitigating banks’ risks on outstanding mortgages. 
However, the increase in interest rates of the past 
two  years  has  weakened  many  borrowers’  debt-
servicing capacity. In contrast, the commercial real 
estate  (CRE)  sector,  offices  in  particular,  is  still 
squeezed  amid  subdued  demand,  with  offices 

recording  price  drops  of  over  15%  in  2023.  Irish 
banks’  CRE  loan  book  is  worth  EUR  16.3  bn 
compared to EUR 101.7 bn for the residential real 
estate  sector.  It  represents  31%  of  exposures  to 
NFCs, and its share of stage 2 loans rose to 40% 
at  the  end  of  2023  from  34%  the  previous  year, 
while the share of stage 3 loans increased to 7% 
from  6%.  CRE  loans  have  been  granted  under 
more  conservative  lending  standards  than  before 
the global financial crisis, which should limit banks’ 
losses in case of borrowers’ defaults. 

to  use 

(CCyB)  and 

the  CCyB  as 

The  Central  Bank  uses  the  countercyclical 
capital  buffer 
the  other 
systemically  important  institutions  (O-SII) 
buffer  as  its  main  macroprudential  capital 
tools.  The  Central  Bank  published  its  framework 
for  macroprudential  capital  in  June  2022,  after 
drawing  lessons  from  developments  over  the  last 
decade,  including  the  pandemic.  The  Central  Bank 
the  primary 
decided 
macroprudential  buffer  against  macro-financial 
risks,  while  the  systemic  risk  buffer  will  not  be 
activated. The Central Bank targets a 1.5% rate for 
the CCyB on Irish exposures when risks are neither 
elevated  nor  subdued.  Since  June  2024  the 
applicable  CCyB  is  set  at  said  rate  of  1.5%.  In 
addition, the Central Bank uses the O-SII buffer for 
all  systemically-  important  institutions.  Six  banks 
are currently classified as O-SII and need to fulfil 
additional capital requirements between 0.5% and 
1.5%.  The  Central  Bank  also  has  a  number  of 
mortgage measures in place to ensure sustainable 
lending standards in the mortgage market. 

Resilience of non-bank financial 
intermediaries 

in  the  EU. 

Ireland  is  the  second  largest  domicile  for 
investment  funds 
Irish-based 
investment funds held EUR 4.6 trillion in assets in 
November 2024. About two thirds of these assets 
are held by UCITS funds and one third by AIFs. This 
sector  (UCITS  funds  and  AIFs)  includes:  (i)  equity 
funds;  (ii)  bond  funds;  (iii)  mixed  funds  that  hold 
both equities and bonds; (iv) hedge funds; (v) real-
estate  funds;  and  (vi)  other  funds.  In  Ireland,  the 
largest  group  in  the  ‘other’  category  are  liability-
typically 
driven-investment  funds,  which  are 
pension  funds.  Although  the  fund  industry  is  a 
significant  employer  in 
Ireland,  global  asset-
management  groups  with  fund  ranges  registered 

49 

 
in  Ireland  operate  under  a  delegation  model.  This 
investment-management 
means  that  the  key 
functions  are  handled  from  the  groups'  main 
asset-management  centres,  usually  outside  the 
country,  rather  than  taking  place  in  the  fund 
domicile itself. Moreover, the funds invest globally 
and have very few investments in Ireland. Looking 
at  the  asset  exposures  for  funds  broken  down  by 
investment  type,  the  largest  funds  are  equity 
funds,  with  EUR 1 869  bn,  the  second  largest 
group  is  made  up  of  fixed-income  funds  with  a 
total value of EUR 1 139 bn, and the third largest 
is  comprised  of  mixed  funds  with  EUR  289  bn 
under management. 

Graph A5.4: Composition of NFC funding as a % of 
GDP 

The sum of NFC liabilities only reflects the total for the NFC 
liabilities considered. Reference period 2023. 
Source: Eurostat and DG FISMA E2 calculations 

Irish property funds have close links with the 
Irish  economy  and  are  highly  leveraged.  A 
subset of investment funds with close links to the 
Irish economy are Irish property funds, which hold 
properties  worth  about  EUR  29  bn,  either  directly 
(EUR  22.5  bn)  or  indirectly  (EUR  6.5  bn).  Property 
funds  also  have  the  lowest  liquidity  of  all  fund 
types.  In  November  2022,  the  central  bank  of 
Ireland  introduced  a  60%  leverage  limit  for  Irish 
property  funds,  which  all  property  funds  must 
meet  by  2027.  At  end-2022,  Irish  property  funds 
had  around  EUR  6.5  billion  in  outstanding  bank 
debt,  accounting  for  36%  of  their  total  leverage, 
exposing banks to developments in this sector. 

Ireland  has  become  an  important  hub  for 
insurance  companies  that  do  business  with 
the rest of the EU from their Irish base. This 
explains  the  large  size  of  the  insurance  sector 
relative to Ireland’s GDP (assets of EUR 489 bn or 

equivalent  to  95.6%  of  GDP  vs  an  EU  average  of 
55.3% of GDP in Q4-2023). 

Sources of business funding and the 
role of banks 

as 

their 

Ireland 

chosen 

multinational 

non-financial 
Many 
corporations  (NFCs)  use  Ireland  as  their 
European  base.  Many  non-European  companies 
European 
have 
headquarters,  benefiting  from:  (i)  a  business-
friendly  environment  and  corporate  tax  code;  (ii) 
use of the English language; and (iii) a skilled work 
force.  This  explains  the  outsized  balance  sheet  of 
the  NFC  sector  of  4.5  times  GDP,  and  the  large 
share of unlisted equity (36%) on the liability side 
of the aggregate balance sheet compared with an 
EU average of 24.5%. Loans also play a significant 
role  in  corporate  funding,  but  less  so  than  at  EU 
level, with loans accounting for 21% of Irish firms’ 
balance sheets, vs an EU average of 27.2%. Listed 
shares accounted for 32.8% of funding sources in 
2023,  compared  with  an  EU  average  of  27.2%, 
(see  Graph  A5.4).  Ireland’s  high  market-funding 
ratio of 87.4% masks a sharp distinction between 
multinational corporations, which can easily source 
financing 
indigenous 
in  capital  markets,  and 
companies,  predominantly  SMEs  that  rely  almost 
exclusively on bank loans.  

The  credit  demand  of  Irish  companies  has 
been lacklustre over the past 10 years amid 
elevated interest rates. Since the financial crisis 
Ireland’s  business  sector  has  been 
in  2008, 
loans  to 
deleveraging,  and  outstanding 
Irish 
businesses 
intermediation) 
(excluding  financial 
have  been  trending  lower.  In  September  2024, 
these outstanding loans stood at EUR 34.4 billion, 
compared  to  EUR  174 477  in  September  2008. 
The  same  declining  trend  has  been  observed  for 
the subgroup of SME loans, shrinking to EUR 16. 9 
billion  in  September  2024,  from  a  peak  of 
EUR 61 019  in  March  2012.  About  half  of  Irish 
SMEs  report  not  having  any  debt  at  all.  At  the 
same  time  credit  to  non-Irish  resident  enterprises 
grew.  In  this  context,  it  is  important  to  note  that 
lending rates for business loans – and in particular 
for  SMEs  –  have  in  the  recent  past  been  higher 
than  in  most  other  EU  countries.  The  reasons  for 
this  are  linked  to  the  experience  of  the  Irish 
banking crisis in 2008-2010. The interest rate for 
corporate  loans  of  a  size  of  up  to  EUR  1  million 

50 

050100150200250300350400450500IEEU% of GDPLoansTrade credit and advancesBondsListed sharesUnlisted sharesOther equity 
  
stood at 5.32% in November 2024, compared with 
a euro area average of 4.73%. 

Surveys  suggest  that  Irish  companies  are 
content with their access to external finance. 
According  to  the  2024  EIB  Investment  Survey, 
80%  of  investments  by  companies in  Ireland  was 
financed  internally  or  from  intra-group  sources, 
compared  with  an  EU  average  of  75%.  At  the 
same  time,  80%  of  Ireland’s  firms  believed  that 
their investment activities over the previous three 
years  were  at  about  the  right  amount,  a  view 
shared by 80% of EU firms on average. Only 17% 
of Irish firms said they had invested too little over 
this period, although this was greater than the EU 
average of 14%, suggesting that there could be a 
financing  gap  relative  to  investment  demand  in 
Ireland. According to the same survey, the share of 
finance-constrained firms is around 10% and thus 
above  the  EU  average  of  around  7%.  The  most 
important  reason  cited  by  these  firms  for  being 
finance-constrained 
loan 
amounts  than  they  had  applied  for.  For  SMEs 
specifically,  in  the  last  SAFE  Access  to  Finance 
Survey,  the  share  of  Irish  SMEs  reporting  that 
access  to  finance  was  a  constraint  for  them  was 
6%, which is in line with the EU average.  

receiving  smaller 

is 

lenders  are 

institutions,  with 

In  addition  to  banks,  non-bank  lenders  have 
become  significant  suppliers  of  credit  for 
Irish companies, especially for SMEs active in 
the  real-estate  sector.  Non-bank  lenders  are  a 
diverse  set  of 
the  most 
significant  types  being  asset-finance  providers, 
specialist  property  lenders,  and  general  lenders. 
Specialist property  lenders  have the largest  share 
of non-bank lending in Ireland and lend exclusively 
to  real-estate  companies,  implying  that  these 
specialist 
taking  on  greater 
concentration  risk.  Based  on  new  data  derived 
from Ireland’s Central Credit Register (CCR) at the 
end of 2022, non-bank lenders held EUR 7.7 billion 
of  loans  to  Irish  SMEs.  The  share  of  non-bank 
lending to SMEs declined in 2022 as interest rates 
began to rise and non-bank lenders faced funding 
issues  given  their  reliance  on  wholesale  funding 
(non-bank lenders do not have any depositors who 
could  help  fund  non-bank  lending).  However,  the 
share  of  new  lending  to  SMEs  by  non-banks 
stabilised at 35% of all new lending to SMEs in Q3 
2023.  Non-bank  lenders  have  been  shown  to 
stimulate competition with retail banks, leading to 
lower  borrowing  costs  and  greater  volumes  of 
external 
for  companies.  Non-bank 
lenders have also made inroads into the mortgage 

financing 

market.  In  December  2024,  banks  accounted  for 
approximately 80% of the total outstanding value 
of home  loans, while  non-bank lenders accounted 
for 20%.  

The participation of retail investors in 
capital markets 

investment  funds, 

Irish  households’  participation  in  financial 
markets is dominated by insurance products. 
Average  financial  household  wealth  in  Ireland  is 
estimated  at  EUR 98 000  and  thus  above  the  EU 
average  of  EUR  80 300.  Households’ 
largest 
holdings are deposits, insurance funds and pension 
funds.  Although  households  have  higher  debt 
levels  than in the  EU  on  average, this is matched 
by  their  larger  cash  holdings.  The  share  of  their 
wealth  that  Irish  households  hold  in  financial 
instruments,  namely 
listed 
equities and bonds, is only 3.8%, falling far below 
Ireland’s 
the  EU  average  of  23.2%.  Despite 
Irish 
role  as  a 
outstanding 
households’  holdings  of  investment  funds  are 
unusually low, accounting for less than 1% of the 
aggregate  household  balance  sheet,  compared 
with an EU average of 10.0%.  This could be linked 
to  the tax  treatment  of  fund  investments;  an  exit 
tax  of  41%  is  applied  on  gains  from  investment 
funds  and 
life  assurance  policies.  Further  a 
“deemed disposal rule” crystalises unrealised gains 
every  eight  years  in  order  to  prevent  indefinite 
gross  roll-up  and  deferral  of  exit  tax.  Further, 
financial  advice  in 
is  heavily  geared 
Ireland 
towards  insurance  product  which  explains  the 
large  share  of  this  type  of  investment  in  the 
household balance sheet.  

fund  centre, 

The role of domestic institutional 
investors 

Ireland  hosts  the  fifth  largest  insurance 
sector  in  the  European  Economic  Area  by 
assets. Investment funds accounted for 44.0% of 
these  insurers’  portfolios.  Of  these  investment 
funds, 39.4% were equity funds, 23.0% were debt 
funds,  19.9%  were  asset  allocation  funds,  and 
only  0.5%  were  private-equity 
funds.  The 
remaining 56% of the insurers’ portfolio that is not 
invested  in  investment  funds  is  split  between 

51 

 
equities  (18.1%),  and  government  and  corporate 
bonds  (22.6%).  Domestic  investments  in  Ireland 
account  for  only  11%  of  all  investments,  mostly 
made  by  mutual  funds.  The 
largest  single 
jurisdiction  to  which  Irish  insurers  are  exposed  is 
the  United  States  (15%  of  total  investments), 
followed  by  France  and  the  United  Kingdom  with 
13% 
large 
investments  outside  the  euro  area  are  used  to 
match  liability  exposures in  foreign  currency  —  in 
particular  non-life  firms  and  reinsurers  have 
significant  GBP  and  USD  liabilities.  The  remaining 
cross-border  exposures  are  spread  across  a  wide 
range of geographies. 

respectively.  Such 

and  10% 

in 

Ireland 

landscape 

Ireland’s  state  pension  is  complemented  by 
occupational  pension  schemes  and  self-
invested  pension  schemes. 
Ireland’s  state 
pension  scheme  works  on  a  pay-as-you-go  basis 
and covers all workers who have worked in Ireland 
and  have  paid  social  insurance  contributions.  The 
occupational  pension 
is 
fragmented  with  more  than  11  000  active 
schemes  in  March  2025,  a  lot  of  these  with  only 
one  member.  The  schemes  hold  total  assets  of 
EUR  141.6  bn  in  September  2024,  invested  in  a 
mix  of  equities  (6.8%),  fixed  income  (20%),  real 
estate  (1.5%)  and  alternative  investments (9.1%), 
but the biggest single asset type was pension fund 
reserves (56.0%), which are essentially unit-linked 
claims  on  insurance  companies.  Individuals  also 
have  the  option  to  invest  in  a  tax-advantaged 
personal pension account.  

Ireland  expects  to  launch  a  new  auto-
in 
enrolment  retirement  savings  scheme 
2026.  The  new  scheme  will  cover  all  private-
sector  workers  in  Ireland  who  currently  lack 
retirement savings beyond the public pension, and 
enrol  eligible  employees  automatically,  with 
contributions  from  the  employee,  employer,  and 
the  Irish  government.  The  National  Automatic 
Enrolment  Retirement  Savings  Authority  is  the 
administrative body that will oversee management 
of  the  scheme,  with major  Irish pension providers 
likely managing the funds. 

The  participation  of  domestic  institutional 
investors  in  providing  funding  for  start-ups 
and  venture-capital  investors  in  Ireland  is 
small.  A  recent  CEPS  paper  showed  that  pension 
funds  in  Ireland  accounted  for  12%  of  private-
equity  and  venture-capital  funds  raised  annually 

52 

over  2007-2023,  a  figure  that  falls  short  of  the 
EU average of 15% (74). 

Graph A5.5: Composition of household financial 
assets per capita and as a % of GDP 

The sum of household assets only reflects the total for the HH 
assets considered. Reference period 2023. 
Source: Eurostat and FISMA E2 calculations 

The depth of available venture and 
growth capital  

The  availability  of  growth  capital  in  Ireland 
falls  slightly  short  of  the  EU  average.  In 
2023,  the  value  of  private-equity  investments  in 
the country was equivalent to 0.2% of GDP, below 
the EU average of 0.4%, and it has been below the 
EU average for most of the past 10 years. On the 
other  hand,  with 
to  venture-capital 
respect 
investments,  Ireland  performed  better,  with  a 
value  equivalent  to  0.4%  of  GDP  in  2023,  just 
below  the  EU  average  of  0.5%,  and  reaching 
higher  relative values  in  some  of  the previous  10 
years.  

innovative  businesses, 
To  support  young 
Ireland  offers  attractive  start-up  support 
programmes.  Enterprise  Ireland  is  a  government 
agency responsible  for helping Irish businesses to 
start, grow, and expand into international markets. 
It  provides  support  through  several  programmes, 
such as the Competitive Start Fund (CSF) and the 

(74)  Centre for European Policy Studies (2024) Closing the gaping 
hole  in  the  capital  market  for  EU  start-ups  –  the  role  of 
pension funds 

050100150IEEUper capita (000 EUR)Currency and depositsInsurance and pension fundsInvestment fundsBondsListed sharesUnlisted sharesOther equityHH Debt (liability) 
  
 
High Potential Start-Up Fund. The CSF provides up 
to  EUR  50 000  in  equity  funding  to  early-stage 
start-ups,  and  is  designed  to  support  start-ups 
that have the potential to scale internationally. The 
CSF  funding  is  typically  used  to  support  the 
development of a start-up's product or service, as 
well  as  its  business  plan  and  marketing  strategy. 
The High Potential Start-Up Fund provides funding 
and support to start-ups that have the potential to 
scale  quickly  and  become  major  players  in  their 
markets.  The  fund  typically  provides  funding  of 
between  EUR  500 000  and  EUR  5  million  and  is 
designed to support  start-ups that are developing 
innovative  products  or  services,  and  that  have 
strong  potential  for  export  growth.  In  addition, 
Enterprise  Ireland’s  Seed  and  Venture  Capital 
private-sector 
Scheme 
investment by co-funding venture-capital projects, 
thereby  easing  financial  barriers  for  start-ups.  By 
August 2024, Enterprise Ireland had invested over 
in  the  scheme,  which  has 
EUR  700  million 
leveraged  funds  totalling  EUR  3.3  billion.  Further, 
the  Ireland  Strategic  Investment  Fund,  managed 
and 
the  National  Treasury 
Management  Agency  (NTMA),  has  a  mandate  to 
support  economic  activity  and  employment  in 
Ireland.  Its  main  investment  areas  are  climate, 
housing  and  regional 
indigenous 
investments, 
Businesses, and food and agriculture.  

controlled  by 

leverage 

aims 

to 

Financing the green transition  

The  Irish  government  set  up  the  Climate 
Action  Fund  to  help  finance  the  country’s 
green transition. Ireland’s economy needs initial 
investments of an estimated  EUR 21.1 bn for the 
green  transition  (75).  The  Department  of  Public 
Expenditure  estimated  that  some  EUR  7  bn 
allocated  in  2025  will  be  spent  on  climate  and 
environmentally  favourable  programmes  (76)The 
Climate  Action  Fund  was  set  up  by  the  Irish 
government as part of Project Ireland 2040, which 
is  the  country's  long-term,  policy  and  planning 
framework. The fund was announced in 2018 and 
is one of a series of funds created to support the 
in  the  country’s 
strategic  objectives  outlined 

(75)  European Commission (2023) Climate Action Progress Report 

(76)  Revised 

Estimates 

for 

Public 

Services 

2025 

- 

https://assets.gov.ie/static/documents/climate-
environmental-expenditure-revised-estimates-for-public-
services-2025.pdf   

53 

national  development  plan  for  2018-2027.  The 
Climate  Action  Fund  is  specifically  designed  to 
support  projects  that  contribute  to 
Ireland's 
transition  to  a  low-carbon  and  climate-resilient 
society.  It  is  managed  by  the  Department  of  the 
Environment,  Climate  and  Communications,  which 
is  responsible  for  overseeing  the  allocation  of 
resources and ensuring that funded  projects align 
with national climate goals. 

Sustainable  finance  has  been  one  of  the 
government’s  priorities 
in  the  annually 
updated  ‘Ireland  for  Finance’  action  plan 
since  2021.  The  sustainable  finance  roadmap, 
first published in 2021, lays out the government’s 
response  to  challenges  such  as  climate  change, 
the  just  transition  and  nature  degradation.  The 
goal  of  the  roadmap  is  to  channel  financial 
resources 
into  emissions  reductions,  climate-
change adaptation,  and resilience-building efforts. 
As one of the key  initiatives of the action plan,  is 
the  International  Sustainable  Finance  Centre  of 
Excellence  in  Dublin.  The  centre  supports  both:  (i) 
the development of technical knowledge, research, 
and  product  development  in  sustainable  finance; 
and  (ii)  the  training  of  the  financial  workforce  in 
sustainable 
the  NTMA 
finance  skills.  Since 
launched  Ireland’s  first  sovereign  green  bond  in 
2018,  a  total  of  EUR  10.8  bn  of  proceeds  from 
bond  sales  have  been  allocated  to  eligible  green 
projects,  such as retrofit programmes, investment 
in public transport, and flood-relief schemes.  

The Dublin stock exchange is the hub for the 
ESG  bond  listings  of  the  Euronext  Group. 
Since 2015, EUR 177 bn has been raised for ESG 
purposes in Dublin. In 2022, Euronext introduced a 
new  listing  for  ESG  bonds  from  companies  with 
the  most  ambitious  climate  targets,  aligned  with 
limiting  the  global  temperature 
the  aim  of 
increase  to  1.5 °C  above  pre-industrial  levels.  To 
be  included  in  this  listing,  issuers  of  ESG  bonds 
must  commit  to  science-based  climate  targets 
which are validated by the Science Based Targets 
initiative. 

Financial literacy 

Financial  literacy  in  Ireland  is  above  the  EU 
average, but more could  be  done to improve 
financial  education  in  the  population.  The 
2023  OECD/INFE  International  Survey  of  Adult 

 
 
Table A5.1:  Financial indicators 

(1) Annualised data. 
Credit growth and pension funds EU data refers to the EA average 
Source:  ECB, ESTAT, EIOPA, DG FISMA CMU dashboard, AMECO. 

Financial  Literacy  found  Ireland  had  the  second 
highest  overall  score  among  the  included  EU 
countries. Still, the survey showed that 43% of the 
adult  population  do  not  meet  the  OECD  definition 
of financial literacy and that 44% do not meet the 
minimum  target  level  of  digital  financial  literacy 
needed  to  navigate  their  finances.  A  different 
survey  showed  that  79%  of  the  Irish  population 
report  being  very  comfortable  or  somewhat 
comfortable  with  using  digital  financial  services, 
which is above the EU average 77% but does not 
put  Ireland  among  the  EU  leaders  for  digital 
financial  services  (77).  This  leads  to  an  overall 
financial literacy indicator of 31.0, which is above 
the  EU  average  of  26.0.  As  one  of  the  last  EU 
countries,  the 
its 
National Financial Literacy Strategy 2025-2029 in 
February 2025.  

Irish  government  published 

(77)  European  Commission 

(2023)  Monitoring  the 

level  of 

financial literacy in the EU, Eurobarometer survey 

54 

20172018201920202021202220232024-Q3EUTotal assets of MFIs (% of GDP)341.2329.1344.3362.7315.2301.2312.8328.6248.4Common Equity Tier 1 ratio22.922.922.322.322.221.320.820.416.6Total capital adequacy ratio25.225.424.925.425.524.523.923.620.1Overall NPL ratio (% of all loans)9.95.53.43.42.41.71.31.21.9NPL (% loans to NFC-Non financial corporations)11.85.73.26.26.15.13.93.63.5NPL (% loans to HH-Households)15.510.17.26.84.73.02.52.32.2NPL-Non performing loans coverage ratio29.928.527.530.230.631.125.827.642.1Return on Equity15.04.93.7-2.24.53.37.69.510.0Loans to NFCs (% of GDP)13.412.210.68.96.85.95.85.430.0Loans to HHs (% of GDP)38.133.829.827.823.419.520.119.744.5NFC credit annual % growth-0.61.70.0-4.61.64.1-0.91.50.8HH credit annual % growth-1.5-0.80.1-1.5-1.6-1.31.82.40.7Stock market capitalisation (% of GDP)170.9166.0206.5204.0236.7170.0201.8237.269.3Initial public offerings (% of GDP)0.290.030.090.000.040.000.00-0.05Market funding ratio84.384.585.086.288.387.787.7-49.6Private equity (% of GDP)0.230.220.350.180.880.240.16-0.41Venture capital (% of GDP)0.040.110.040.070.050.080.04-0.05Financial literacy (composite)------45.5-45.5Bonds (as % of HH financial assets)0.10.10.00.00.00.00.1-2.7Listed shares (as % of HH financial assets)2.52.22.42.12.11.61.7-4.8Investment funds (as % of HH financial assets)0.70.70.70.70.90.90.9-10.0Insurance/pension funds (as % of HH financial assets)47.346.047.746.547.242.944.8-27.8Total assets of all insurers (% of GDP)114.8106.3128.4127.7120.193.894.697.454.8Pension funds assets (% of GDP)--33.233.130.622.526.127.023.41-34-1011-1718-2425-27Colours indicate performance ranking among 27 EU Member States.Banking sectorNon-banks sector 
 
 
   
 
ANNEX 6: EFFECTIVE INSTITUTIONAL FRAMEWORK 

to 

the 

improve 

efficiency 

Ireland’s  institutional  framework  influences 
its competitiveness. Public institutions in Ireland 
generally  perform  well  and  enjoy  a  high  level  of 
trust.  The  government  has  implemented  various 
initiatives 
of 
administrative  procedures,  reduce  bureaucracy, 
and increase transparency. However, there is much 
scope to enhance regulatory practices, and further 
reduce  administrative  burdens.  Ireland  has  also 
made  significant  progress  in  digitalising  public 
services although challenges persist in areas such 
as e-health services. The justice system continues 
to  face  serious  challenges  affecting  its  overall 
efficiency,  in  particular  regarding  the  duration  of 
proceedings. 

Public perceptions 

Graph A6.1: Trust in justice, regional / local 
authorities and in government 

(1) EU27 from 2019; EU28 before 
Source: Standard Eurobarometer surveys 

in  public  institutions  continues  to 
Trust 
exceed  the  EU  average.  Trust  in  the  judiciary 
and  in  regional  authorities  has  followed  a  similar 
trend  and  remains  high,  despite  a  slight  drop  in 
recent  years.  Trust  in  central  government  is 
comparatively  lower  but  is  above  the  EU  average 
(Graph  A6.1).  When  asked  about  ways  to  boost 
trust  in  Ireland’s  public  administration,  39%  of 
transparency  about 
citizens  wanted  more 
decisions  and  the  use  of  public  money  (EU 
average: 44%), 37% wanted more decisions to be 
made  at  local  level  (EU  average:  23%),  and  36% 

55 

suggested more communication with the citizens -
skilled  civil  servants  (EU  average:  31%)  (78).  The 
overall  perceived  quality  of  government  is  above 
the  EU  average  and  has  improved  in  all  of 
this  backdrop, 
Ireland’s  regions 
building trust in public institutions is a core aim of 
Ireland’s  Better  Public  Services  strategy  published 
in 2023. 

(79).  Against 

Quality of legislation and regulatory 
simplification 

in 

for 

the 

system 

developing 

evaluating 
Performance 
legislation  remains  below  the  EU  average.  It 
is  generally  stronger  for  primary  laws  than  for 
subordinate  regulations  and  for  ex-ante  impact 
assessments  than  for  public  consultation  and  ex 
post  evaluation  of  legislation.  Moreover,  Ireland 
has  an  underdeveloped  oversight  and  quality 
control 
above-mentioned 
regulatory tools, as well as for the methodological 
aspects  of  ex  post  evaluations  of  legislation 
(Graph  A6.2).  Ireland  continues  to  advance  in 
innovation and use of evidence in policymaking, as 
part  of  its  Public  Service  Transformation  2030 
Strategy.  In  2024,  a  new  agency  was  established 
to  enhance  collaboration  between 
research, 
government,  public  bodies  and  society,  while 
strategic 
promoting  equality, 
research  areas 
country’s 
competitiveness and sustainability. 

inclusion  and 
the 
for 

crucial 

to 

is  scope 

further  strengthen 
There 
mechanisms  for  simplifying  regulation.  For 
example, ex post evaluations of primary legislation 
are  not  required  to  include  an  assessment  of 
administrative  burdens  and  of 
substantive 
compliance  costs.  Moreover,  periodic  ex  post 
evaluations  of  existing 
legislation  are  not 
mandatory (Table ). 

The  OECD  product  market  regulation  indicators 
show  that  Ireland’s  licensing  system  is  slightly 
more  burdensome  than  the  EU-27  average  and 
could  be  further  aligned  with  best  practices.  For 
example, the government does not keep an up-to-

(78)  Understanding  Europeans’  views  on  reform  needs  -  April 

2023 - - Eurobarometer survey, Country Fact Sheet  

(79)  Inforegio - European Quality of Government Index 

00.10.20.30.40.50.60.70.8AutumnSpringAutumnSpringAutumnSpringAutumnSpringAutumnSpringAutumnSummerWinterSummerWinterSpringAutumnSpringAutumn2014201520162017201820192020202220232024Justice,  legal system EU27Justice,  legal system IERegional or local public authorities EU27Regional or local public authorities IEGovernment  EU27Government  IE 
 
       
 
 
 
 
Table A6.1:  Selected indicators on administrative burden reduction and simplification 

(1) This table presents a subset of iREG indicators focusing on regulatory costs. The indicators refer to primary legislation. 
Source: OECD (2025), Regulatory Policy Outlook 2025 [https://doi.org/10.1787/56b60e39-en] and Better Regulation across the 
European Union 2025 (forthcoming). 

inventory  of  all  permits  and 

licences 
date 
required/issued to businesses by public bodies (see 
also Annex 4). 

Social dialogue  

Graph A6.2: Indicators of Regulatory Policy and 
Governance (iREG) 

Source: OECD (2025), Regulatory Policy Outlook 2025 and 
Better Regulation across the European Union 2025 
(forthcoming). 

The  Labour  Employment  Economic  Forum 
(LEEF)  is  the  primary  national  platform  for 
tripartite social dialogue in Ireland, although 
its  impact  on  decision-making  is  limited.  The 
LEEF  brings  together  representatives  from  the 
government,  the  Irish  Congress  of  Trade  Unions 
(ICTU),  which  is  the  umbrella  organisation  for 
labour, and employers, represented by Ibec. These 
stakeholders  meet  multiple  times  per  year  to 
discuss  issues  of  common  interest  related  to 
economic policy, where social partners can provide 
their views. While social partners can participate in 
these  meetings,  the  extent  to  which  their  views 
influence policy decisions is unclear. Notably, LEEF 
is  a  consultative  rather  than  a  negotiating  body, 
and  social  partners  have  expressed  concerns  that 
in  certain  cases 
the 
government  often  go  unanswered.  Furthermore, 
they consider the national social dialogue structure 
to be weak, hindering its ability to effectively drive 
policy forward (on collective bargaining see Annex 
10).(80) 

their  submissions 

to 

(80)  For  an  analysis  of  the  involvement  of  Ireland’s  social 
partners at national level in the European Semester and the 

56 

0.00.51.01.52.02.53.03.54.0Primary lawsSubordinateregulationsPrimary lawsSubordinateregulationsPrimary lawsSubordinateregulationsIE_StakeholderengagementIE_Regulatory ImpactAssessmentIE_Ex-post evaluation oflegislationMethodologySystematic adoptionTransparencyOversight and quality control2021EU-27Ex ante impact assessment of legislationEx post evaluation of legislationIdentify and assess the impacts of the baseline or ‘do nothing’ option.Is required to consider the consistency of regulations and address areas of duplication.Identify and assess the impacts of alternative non-regulatory options.Is required to contain an assessment of administrative burdens.Quantify administrative burdens of new regulations.Is required to contain an assessment of substantive compliance costs.Quantify substantial costs of compliance of new regulations.Compares the impact of the existing regulation to alternative options.Assess macroeconomic costs of new regulations. Periodic ex post evaluation of existing regulations is mandatory.Assess the level of compliance.Government uses stock-flow linkage rules when introducing new regulations (e.g., one-in one-out).Identify and assess potential enforcement mechanisms.A standing body has published an in-depth review of specific regulatory areas in the last 3 years.In the last 5 years, public stocktakes have invited businesses and citizens to assess the effectiveness, efficiency, and burdens of legislation.When developing new legislation, regulators are required to …Yes /  For all primary laws For major primary laws For some primary lawsNo / Never 
       
 
 
 
 
   
 
Table A6.2:  Key Digital Decade targets monitored through the Digital Economy and Society Index 

Source: State of the Digital Decade report 2024 

Digital public services 

Ireland  has  made  significant  progress  in 
terms of digital public services, scoring 81.2 in 
the provision of services to citizens, above the EU 
average of 79.4. Notably, Ireland leads the way in 
terms  of  digital  public  services  to  businesses  and 
has  maintained  a  score  of  100  since  2020,  a 
major  achievement  equalled  only  by  Finland  and 
Malta (Table A6.2). 

Ireland  has  one  of  the  highest  rates  of 
digital  service  use  in  the  EU.  Some  91.5%  of 
people  in  Ireland  use  e-government  services,  well 
above the EU average of 75%. Moreover, 73.8% of 
people use eID, significantly above the EU average 
of 41.1% (81). This high rate of use is the result of 
a  focus  on  creating  services  and  has  simplified 
how  people  interact  with  public  administration. 
However, access to e-health records remains a key 
challenge,  with  Ireland  achieving the lowest  score 
in the EU at just 11 out of 100, compared to an EU 
average of 18.4%. Ireland also has not yet set up 
and  notified eID  schemes for  legal  persons  under 
the  eIDAS  Regulation  (82).  This  means  that  Irish 
businesses  cannot  authenticate  themselves  to 
access  public  services  provided  by  other  Member 
States,  including  those  enabled  by  the  Once-Only 

Recovery  and  Resilience  Facility,  see  Eurofound  (2025), 
National-level  social  governance  of  the  European  Semester 
and the Recovery and Resilience Facility. 

(81)  European Commission. Digital Decade 2024: Country reports 

Technical  System  (83),  System,  part  of  the  EU 
Single Digital Gateway. 

is  making  progress 

Ireland 
in  providing 
seamless  access  to  its  digital  services,  both 
domestically  and  within  the  EU.  Significant 
milestones  have  been  reached, 
including  the 
widespread  adoption  of  the  MyGovID  digital 
system,  which  boasted  over 
identification 
2.3 million  verified  accounts  as  of  October 2023, 
covering  more  than  half  of  the  adult  population. 
Ireland’s aim is that 80% of eligible citizens will be 
using MyGovID by 2030. 

Additionally,  Ireland  is  actively  involved  in 
the European Digital Identity Wallet pilot and 
the  Digital  Credentials  for  Europe  initiative, 
focusing  on  sectors  such  as  education  and  social 
security.  Ireland  is  currently  conducting  a  pre-
notification  health  check  of  its  eID  infrastructure 
and is exploring its applications in other areas such 
as banking and insurance. 

is  advancing  towards  seamless, 
Ireland 
automated exchange of authentic documents 
and  data  across  the  EU.  It  has  developed  the 
necessary  infrastructure  and  is  beginning  the 
process  of  connecting  the  first  authorities  to  the 
Once-Only Technical System (84). 

In 2024, the government signalled progress on the 
‘Life  Events’  Programme,  aimed  at  transforming 
public  services  by  making  them  more  accessible, 

(83)  European  Commission,  The  Once  Only  Principle  System:  A 

breakthrough for the EU’s Digital Single Market 

(84)  European  Commission,  Once-Only 

Technical  System 

(82)  European Commission, eIDAS Dashboard. 

Acceleratormeter.  

57 

Digital Decadetarget by 20302022202320242024EU-27Digitalisation of public services180818179100Score (0 to 100)20212022202320232030210010010085100Score (0 to 100)202120222023202320303na01179100Score (0 to 100)20212022202320232030IrelandEU-27Digital public services for citizensDigital public services for businessesAccess to e-health records 
 
 
 
  
 
proactive  and  seamless  online.  The  Life  Events 
online  platform,  co-designed  with  the  public 
through consultations and workshops, will make it 
easy  for  users  to  obtain  services  via  MyGovID 
related  to  housing,  having  a  child,  finding  a  job, 
starting a business, obtaining welfare, etc. (85). 

In  addition,  the  government  launched  an 
updated  National  AI  Strategy  in  2024.  Key 
elements  include  an  AI  regulatory  sandbox,  a 
National  AI  Research  Nexus,  and  expanded  digital 
upskilling initiatives.  The  strategy  aims to  support 
responsible  AI  adoption  to  enhance  productivity 
and public services, positioning Ireland as a leader 
in the AI sector (86). 

Graph A6.3: Participation rate of 25-64 year olds 
in adult learning (%) by occupation 

servants  pursuing  adult  learning  has  increased 
recently (Graph A6.3). Ireland is well above the EU 
average in terms of the share of civil servants who 
frequently  work  from  home.  Only  Finland  has  a 
higher  share.  However,  the  share  of  employees 
who  frequently  work  from  home  fell  significantly, 
however, between 2022-2023, from 38% to 27% 
(88). 

The  Better  Public  Services  strategy  focuses 
on  shaping  the  workforce  and  organisation 
of  the  future.  Key  priorities  include  making  the 
public  service  more  diverse,  agile,  and  inclusive. 
Following  an  independent  review  of  senior  public 
service 
recruitment  and  pay  determination 
processes  in  2023,  a  senior  posts  remuneration 
committee  (89)  was  set  up  in  2024  to  give 
independent  advice  on  pay  for  senior  roles. 
Additionally, 
to  Career 
the  Assisted  Return 
programme  for  the  civil  service  was  launched  in 
2024  to  support  skilled  workers  returning  to  the 
workforce after a career break, promoting a more 
inclusive job market (90). 

Integrity 

Source: European Commission, based on the Labour Force 
Survey 

Civil service  

implemented  measures 

Ireland  has 
to 
maintain  the  age  and  skill  structure  of  its 
civil service. The ratio between staff aged 25-49 
and staff aged 50-64 is above the EU average and 
has  remained  stable(87).  The  proportion  of  civil 

(85)  Government advances Life Events Programme for enhanced 

public services 

(86)  Refreshed National AI Strategy: “Huge opportunity for Ireland 

legislation  has  been 

A lower percentage of companies than the EU 
average consider corruption to be a problem, 
while 
improved  to 
combat foreign bribery. In Ireland, only 33% of 
companies  consider  that  corruption  is  widespread 
(EU  average  64%),  while  only  9%  consider  that 
corruption  is  a  problem  when  doing  business  (EU 
average  36%) (91).  However,  only  25%  of 
companies  believe  that  people  and  businesses 
caught 
senior  official  are 
appropriately punished (EU average 31%) (92). The 
lack  of  resources  and  specialisation  within  the 
national police and prosecution services remains a 
investigating  and  prosecuting 
challenge 

for  bribing  a 

in 

(88)  Eurostat.  Employed  persons  working  from  home  as  a 

percentage of the total employment. 

(89)  gov.ie - Minister Donohoe announces establishment of Senior 
Post Remuneration Committee to guide Government’s work 

(90)  gov.ie - Minister Donohoe launches Assisted Return to Career 

(ARC) Programme for Civil Service 

to harness AI for our greater good” 

(91)  Flash  Eurobarometer  543  on  businesses’  attitudes  towards 

(87)  Eurostat. Labour Force Survey.  Employment by sex, age and 

corruption in the EU (2024).   

economic activity. 

(92)  Ibid. 

58 

02468101214161820IEEU-27IEEU-27IEEU-27IEEU-272021202220232024Public administration and defence; compulsory social securityHigh-skilled occupationsMedium-skilled occupationsUnskilled occupationsArmed forcesTotal economy 
     
 
 
corruption  cases  (93).  Recent  legislative  changes 
are  expected  to  streamline  the  investigation  of 
foreign  bribery  (94).  Sectors  which  have  been 
identified  by  stakeholders  as  areas  of  risk  for 
corruption  are  planning,  public  utilities,  sports 
natural 
manipulation, 
resources and private procurement (95). 

renewables, 

offshore 

Ireland  has  strengthened  its  public  register 
for  lobbyists.  As  with  most  EU  Member  States, 
Ireland  implemented  rules  on  lobbying.  Since 
2024,  corporate  interest  groups  and  other  such 
coalitions  which  do  not  engage  any  direct 
employees  are  required  to  make  returns  to  the 
Register  of  Lobbying.  New  provisions  also  include 
administrative financial sanctions, for instance for 
breaches of the cooling-off provision (96). 

Justice 

The  justice  system  continues to  face  serious 
challenges  as  regards  its  overall  efficiency, 
in  particular  concerning  the 
length  of 
proceedings. A detailed overview of the efficiency 
of justice remains unavailable due to a persistent 
lack  of  data  on  court  proceedings  based  on 
defined 
Justice 
indicators.  The  2025  EU 
Scoreboard shows that in 2023 the clearance rate 
for non-criminal cases was 81%, the lowest in the 
is  advanced. 
EU.  The 
Moreover,  Ireland  has  rolled  out  several  digital 
strategies which may help to fill outstanding gaps 
in  the  digitalisation  of  justice.  As  regards  judicial 
independence, no systemic deficiencies have been 
reported (97). 

level  of  digitalisation 

(93)  See the 2024 country-specific chapter for Ireland of the Rule 

of Law Report, pp. 12-13. 

(94)  Ibid., pp. 15-16. 

(95)  Ibid. p. 20. 

(96)  Ibid., p. 18. 

(97)  For more detailed analysis of the performance of the justice 
system  in  Ireland,  see  the  upcoming  2025  EU  Justice 
Scoreboard and the 2024 Rule of Law Report. 

59 

 
 
SUSTAINABILITY 
ANNEX 7: CLEAN INDUSTRY AND CLIMATE MITIGATION 

Ireland  faces  significant  challenges  in  its 
clean  industry  transition  and  the  quest  to 
remain  competitive  in  a  low-carbon  setting: 
the  country  shows  vulnerability  due to its  modest 
manufacturing  capacity  in  net  zero  technologies 
and  heavy  reliance  on  imports  of  critical  raw 
materials.  While  Ireland  has  made  progress  in 
reducing  greenhouse  gas  emissions, 
it  could 
further  specify  climate  mitigation  policies  to 
achieve 
its  2030  emission  reduction  target. 
Additionally,  Ireland's  circular  economy  transition 
lags  significantly,  with  very  low  circular  use  of 
materials  and  insufficient  investment  to  reach 
circular  targets.  This  annex  reviews  the  areas  in 
need of urgent attention in Ireland’s clean industry 
transition  and  climate  mitigation, 
looking  at 
different dimensions. 

Strategic autonomy and technology 
for the green transition  

Net zero industry 

technologies 

Ireland  modest  manufacturing  capacity  in 
net zero technologies and reliance on imports 
of  key  clean 
indicate  a 
vulnerability  (98).  The  main  clean  technologies 
production facilities include, for li-ion batteries, the 
Xerotech in Galway  and Li-Gen in Tipperary, while 
Nines  photovoltaics  produces  solar  photovoltaics 
(PV)  cells  in  Dublin.  Eirsun  has  announced  the 
opening  of  a  facility  producing  solar  PV  modules 
by 2024, with an expected capacity of 250 - 350 
MW per year. On wind manufacturing, there are a 
research  and  development 
few  small-scale 
initiatives  on  offshore  wind.  Ireland  is  involved  in 
components 
testing  and  grid  management 
software,  and  Dublin  hosts  a  growing  company 
focused on developing a modular floating offshore 
wind platform.  

The  policy  framework  supporting  the  scale-
up  of  net  zero  technologies  manufacturing 
remains  limited  to  sectoral  policies,  focused 

(98)  European Commission, Directorate-General for Energy, 2025, 
The net-zero manufacturing industry landscape across the 
Member States 2025, 
https://data.europa.eu/doi/10.2833/2181110   

mostly  on  offshore  wind.  In  March  2024, 
Ireland  published  its  offshore  wind  industrial 
strategy, Powering Prosperity. The strategy aims to 
build an offshore wind industry in Ireland, ensuring 
that the sector creates as much value as possible 
and  maximises  the  economic  benefits.  Measures 
for  strengthening  manufacturing  capacity  under 
the strategy include establishing an Offshore Wind 
Centre  of  Excellence  to  facilitate  collaboration 
between  supply  chain  companies,  government 
agencies, and education institutions to access and 
implement  new  technologies.  Ireland  will  also 
investigate  options  for  building  green  energy 
industrial  parks,  aiming  to  provide  comprehensive 
property,  utility  and  infrastructure  solutions  on  a 
large scale. A key challenge to the timely delivery 
of  projects  is  the  range  of  permits  required  (67 
permits  and  licences,  to  be  obtained  from  18 
and 
issuing 
Development  Act  from  October  2024  aims  to 
streamline the process for Strategic Infrastructure 
Developments. 

Planning 

bodies). 

recent 

A 

Incentives are in place supporting investment 
and  skills  in  net  zero  technologies.  This 
includes  the  Disruptive  Technologies  Innovation 
the  development  of 
Fund,  which  supports 
renewable energy equipment and other innovative 
technologies.  Two  skills  programmes  provide 
vocational  training  and  upskilling  opportunities  in 
the renewable energy industries.  

investment 

Public 
in  energy-related  R&I 
decreased  from  0.022%  of  GNI*  in  2014  to 
0.005%  in  2021.  Ireland’s  Sustainable  Energy 
Authority  (SEAI)  has  begun  publishing  yearly  calls 
to  fund  innovative  energy  research  development 
and  demonstration  projects.  The  main  financing 
instrument  supporting  energy  R&I  is  the  SEAI 
national  energy 
research  development  and 
demonstration (RD&D) funding programme. 

Critical raw materials  

Ireland  relies  heavily  on  imports  of  critical 
raw  materials.  With  33.5 %  of  material  inputs 
stemming from imports in 2023, compared to the 
EU  average  of  22 %, 
is  particularly 
vulnerable  to  supply  chain  disruptions.  Whilst 
Ireland  is  a  leading  EU  producer  of  refined 
aluminium, in 2023 its imports included fertilisers, 

Ireland 

60 

 
 
 
 
 
 
Platinum  Group  Metals,  wood,  aluminium,  and 
resource 
coking  coal.  Since  2000, 
productivity  has  increased  more  than  threefold, 
outpacing the EU average.   

Ireland’s 

Climate mitigation 

Industry decarbonisation 

Manufacturing  production  in  Ireland  is  a 
minor emitter of greenhouse gases. The sector 
accounts  for  less  than  10%  of  total  greenhouse 
gas  emissions  in  the  country,  among  the  lowest 
shares  in  the  EU (99).  With  40  g  CO2eq  of 
greenhouse  gases  per  euro  of  gross  value  added 
(GVA),  the  emissions  intensity  of  manufacturing 
production  in  Ireland  equals  15%  of  the  EU 
average,  making  it  number  one  in  the  EU  in  this 
regard. Since 2017, Ireland has seen the emissions 
intensity  of  manufacturing  production  decline  by 
52%,  significantly  more  than  in  the  EU  overall 
where  it  decreased  by  22 %.  A  major  share  of 
Ireland’s  manufacturing  greenhouse  emissions, 
58%,  come  from  energy  use,  similar  to  the  EU 
overall;  the  rest  come  primarily  from  industrial 
processes.  

of 

intensity 

The  recent  decline  in  the  greenhouse  gas 
emissions 
Ireland’s 
manufacturing production appears to be due 
to higher energy efficiency (100). Between 2017 
and  2022,  energy-related  and  non-energy-related 
greenhouse  emissions  intensity  of  manufacturing 
production  declined  by  51  and  55  %  respectively, 
the  strongest  reductions  in  the  EU.  In  the  same 

(99)  In 2023. Manufacturing includes all divisions of the “C” section of 
the NACE Rev. 2 statistical classification of economic activities. In 
the remainder of this section, unless indicated otherwise, data on 
manufacturing  refer  to  the  divisions  of  the  NACE  section  C 
excluding  division  C19  (manufacture  of  coke  and  refined 
petroleum products), and the year 2022. The source of all data in 
this  section  is  Eurostat;  data  following  the  UNFCCC  Common 
Reporting  Framework  (CRF)  are  from  the  European  Environment 
Agency (EEA), republished by Eurostat. 

(100) For the GHG emissions intensity of GVA related to energy use and 
industrial processes and product use respectively, GHG emissions 
are  from  inventory  data  in  line  with  the  UNFCCC  Common 
Reporting  Format  (CRF),  notably  referring  to  the  source  sectors 
CRF.1.A.2  –    fuel  combustion  in  manufacturing  industries  and 
construction  and  CRF.2  –  industrial  processes  and  product  use. 
The  CRF.1.A.2  data  broadly  correspond  to  the  NACE  C  and  E 
sectors,  excluding  C-19.  GVA  data  (in  the  denominator  for  both 
intensities)  are  aligned  with  this  sectoral  coverage.  Therefore, 
they  are  not  fully  consistent  with  the  data  referred  to  in  other 
part of this section. 

61 

period,  the  share  of  electricity  and  renewables  in 
final  energy  consumption  of  the  manufacturing 
sector  remained  broadly  stable,  around  35%. 
Conversely,  the energy intensity  of manufacturing 
in Ireland declined by 53%, from 0.26 GWh to 0.12 
GWh per euro of GVA.  

Graph A7.1: GHG emissions intensity of manu-
facturing and energy-intensive sectors, 2022 

Source: Eurostat. 

Energy-intensive industries do not play a role 
in Ireland’s economy. These sectors (101) account 
for less than 1 % of Ireland’s total manufacturing 
gross  value  added  (2022).  Among  these,  in  2022 
the  manufacture  of  basic  metals  recorded  a 
particularly high emissions intensity of production, 
with  11.9 kg  CO2eq/€  of  GVA,  significantly  above 
the EU-level  of, 3.5 kg CO2eq/€. The manufacture 
of  non-metallic  mineral  products  also  recorded  a 
high emissions intensity of production, with 3.4 kg 
CO2eq/€  of  GVA,  well  above 
the  EU-level 
emissions  intensity  of  2.2 kg  CO2eq/€.  Electricity 
prices  in  Ireland  have  risen  significantly  in  the 
2020s, to relatively high levels compared to other 
EU  Members  (see  Annex  8  on  the  affordable 
energy  transition).  Still,  production  in  the  non-
metallic minerals sector has increased by about a 
quarter since 2021 (102). 

Ireland  has  put  in  place  policies  to  support 
the  decarbonisation  of  industry  but  much 
more is needed. Ireland’s climate action plan for 
2024  includes  measures  such  as  electrifying 

(101) Notably,  the  manufacture  of  paper  and  paper  products  (NACE 
division  C17),  of chemicals  and  chemical  products  (C20),  “other” 
includes 
non-metallic  mineral  products 
manufacturing activities related to a single substance of mineral 
origin,  such  as  glass,  ceramic  products,  tiles,  and  cement  and 
plaster),  and  basic  metals  (C24).  To  date,  these  industries  are 
energy-intensive  –  i.e.  consuming  much  energy  both  on  site 
and/or in the form of purchased electricity – and greenhouse gas 
emissions intensive, in various combinations. 

(C23;  this  division 

(102) For  the  other  energy-intensive  sectors,  production  data  are  not 

available. 

02468101214C-C19C17C20C23C24KG CO2eq / €IrelandEU-27 
 
   
 
manufacturing  processes  to  replace  fossil  fuels; 
substituting low  and  net  zero  carbon  products  for 
construction  materials;  prioritising  biomass  and 
low-emission  gases  in  areas  where  electrification 
or  other  forms  of  decarbonisation  are  not 
commercially  or  technically  viable;  and  advancing 
policies  for  the  deployment  of  hydrogen  and 
carbon  capture,  utilisation  and  storage.  In  2024, 
Ireland  published  its  decarbonisation  of  industrial 
heat  roadmap,  outlining  the  necessary  steps, 
supports  and 
reduce  carbon 
emissions from manufacturing sectors. Businesses 
have  access  to  various  decarbonisation  support 
instruments,  such  as  the SEAI  energy  audit  grant, 
Enterprise  Ireland’s Green Start  and  the  Industrial 
Development  Agency’s  Green  Start  and  Go  Green 
programmes.  These  are  effective  for  early-stage 
climate  initiatives;  however,  the  current  support 
measures for large-scale heat decarbonisation are 
insufficient to meet national  targets, notably with 
regard to price caps and low uptake rates (103).  

regulations 

to 

the  Effort  Sharing  Regulation,  this  would  not  be 
sufficient to close the gap to target. 

Graph A7.2: Greenhouse gas emissions in the 
effort sharing sectors, 2005 and 2023 

Source: European Environment Agency. 

Reduction  of  emissions  in  the  effort  sharing 
sectors 

Sustainable industry 

further 

To  attain  its  2030  target  for  the  effort 
sharing  sectors,  Ireland  could  specify  and 
implement 
climate  mitigation 
policies (104). GHG emissions from Ireland’s effort 
sharing sectors in 2023 are expected to have been 
10.3%  below  those  of  2005.  By  2030,  current 
policies  are  projected  to  reduce  them  by  8.9% 
relative  to  2005  levels.  Additional  policies  under 
Ireland’s final updated national energy and climate 
plan are projected to achieve further reductions of 
16.5  percentage  points.  This  results  in  a  sizeable 
shortfall  against  Ireland’s effort  sharing  target  of 
a  42%  reduction,  by  16.6  percentage  points (105). 
Swift and steady adoption and implementation of 
further climate mitigation measures will be critical. 
While Ireland could use flexibilities available under 

(103) See Ibec (2024), Decarbonisation through Climate Action 

Contracts: An Ibec Proposal, July 2024, Ibec - For Irish Business. 

(104) The national greenhouse gas emission reduction target is set out 
in  Regulation  (EU)  2023/857  (the  Effort  Sharing  Regulation).  It 
applies  jointly  to  buildings  (heating  and  cooling);  road  transport, 
agriculture;  waste;  and  small  industry  (known  as  the  effort 
sharing sectors). 

(105) The emissions from effort sharing sectors for 2023 are 

based on approximated inventory data. The final data will be 
established in 2027 after a comprehensive review. 
Projections on the impact of current policies (“with existing 
measures”) and additional policies (“with additional 
measures”) as per Ireland’s final updated national energy 
and climate plan. 

Circular economy transition 

Ireland  has  a  very  low  circular  use  of 
materials.  Ireland’s  circular  use  of materials  has 
been relatively static in the last 10 years and well 
below  the  EU  average.  The  rate  stood  at  2.3%  in 
2023,  against  an  EU  average  of  11.8%.  This 
makes  Ireland  the  Member  State  with  the  second 
lowest  rate  for  the  circular  use  of  materials. 
Consequently, there is an urgent need to promote 
(i)  technologies  aimed  at  replacing  critical  raw 
materials with materials that can be reused at the 
end of their life and (ii) the use of secondary raw 
materials.  In  September  2024,  Circle  Economy 
published  Ireland’s  Circularity  Gap  Report (106).  It 
concluded that over 97% of the materials flowing 
through 
Ireland’s  economy  come  from  virgin 
sources,  higher  than  for  the  global  economy  (just 
over  92%  in  2023).  The  report  will  inform  the 
second  Whole  of  Government  Circular  Economy 
Strategy which was due to be published before the 
end of 2024.  

Various  initiatives  on  the  circular  economy 
have  been  launched  recently.  In  2022  Ireland 
adopted  the  Circular  Economy  and  Miscellaneous 

(106) CGR, 2024, The Circularity Gap Report, Link. 

62 

010203040506020052023MtCO2eDomestic transport (excl. aviation)Buildings (under ESR)AgricultureSmall industryWaste 
 
          
 
Provisions Act. This Act provides the first definition 
of  the  circular  economy  in  Irish  domestic  law.  It 
incentivises  the  use  of  reusable  and  recyclable 
alternatives  to  disposable  products;  establishes  a 
dedicated  fund  for  the  circular  economy;  and 
places  pieces  of  legislation  related  to  the  circular 
economy  on  statutory  footing.  Ireland’s  national 
waste  prevention  programme  was  reconfigured 
into  a  circular  economy  programme  for  2021-
2027. At regional level, Ireland West is developing 
a  regional  circular  economy  action  plan.  Ireland 
has  also  adopted  a  national  waste  management 
plan for a circular economy for 2024-2030, which 
includes  a  framework  for  the  prevention  and 
management of waste for 2024-2030. 

Municipal  waste  generation  per  capita 
increased  between  2014  and  2020,  and 
Ireland  risks  missing  the  2025  municipal 
waste  target.  Waste  composition  analysis  done 
in  2018  and  2022  indicates  that  the  increase  is 
mainly due to growth in packaging waste, which is 
significantly  above  the  EU  average.  In  2021,  the 
recycling  rate  for  plastic  packaging  (28%)  was 
below  the  EU  average.  In  2020,  only  39.7%  of 
construction  and  demolition  waste  was  recycled 
(excluding  backfilling),  well  below  the  EU  average 
of  78%.  The  rate  of  preparing  for  reuse  and 
recycling  of  municipal  waste  is  stagnating,  at 
around  41%  in  2020,  slightly  below  the  EU 
average.  The  landfill  rate  has  stabilised  since 
2018 (at around 16%), almost entirely due to the 
diversion  of  waste  to  incineration,  whereas  the 
incineration 
increased  significantly, 
reaching 42% in 2020. 

rate  has 

Current  investment  in  the  circular  transition 
is  insufficient  to  reach  the  circular  target. 
Ireland is estimated to need additional investment 
of  at  least  EUR  827  million  per  year  for  the 
circular  transition,  representing  0.16%  of  GDP.  To 
close the circular economy gap, EUR 196 million is 
estimated to be needed for recent initiatives, such 
as eco-design for sustainable products; packaging 
and  packaging  waste;  labelling  and  digital  tools; 
and measures proposed under the amendment of 
the  Waste  Framework  Directive.  Over  EUR  500 
million  of  further  investment  is  estimated  to  be 
needed  to  unlock 
Ireland’s  circular  economy 
potential (107).   

Zero pollution industry 

reduction  commitments  under 
Reduction 
Emission 

Ireland  has  made  considerable  progress  in 
reducing  air  pollution,  which 
is  now 
decoupled  from  GDP  growth.  The  2020-2029 
emission 
the 
National 
Commitments 
Directive  have  been  met,  except  for  ammonia. 
Ireland  is  on  track  to  meet  the  stricter  emissions 
reduction  commitments  for  2030  and  onwards, 
except 
organic 
compounds  (NMVOC).  In  2023,  there  were  no 
exceedances above the limit values established by 
the Ambient Air Quality Directive in Ireland.  

non-methane 

volatile 

for 

the 

lowest 

It  has  the  2nd 

Considering 
Irish 
the  make-up  of 
economy,  Ireland  is  one  of  the  EU’s  lowest 
emitters  of  industry  pollutants  to  air  and 
water. 
industrial  air 
emissions  intensity  for  industry  in  the  EU  (2.9 
EUR/thousand  EUR  GVA,  below  the  EU  average  of 
EUR 27.5). The main industrial sectors contributing 
to  air  emissions  are  the  energy  sector  and  the 
mineral industry. On water pollution, Ireland ranks 
amongst the Member States with the lowest heavy 
metals  emission  intensity  (far  below  the  EU 
average  intensity  of  0.864  kg/billion  EUR  GVA  for 
industry).  The  main  contributors  to  emissions  to 
water  are  the  chemical  sector  for  heavy  metals 
(human toxicity)  and  the energy  sector  (electricity 
and heat production) for total organic carbon. 

The  costs  of  pollution  remain  higher  than 
investment 
in  pollution  prevention  and 
control.  For  2022,  about  530  deaths  were 
attributed to fine particulate matter (PM2.5), 100  

deaths  to  nitrogen  dioxide  (NO2),  and  240  deaths 
to ozone. To meet its environmental objectives on 
pollution  prevention  and  control  (towards  zero 
pollution),  it  is  estimated  that  Ireland  would 
require  an  additional  EUR  847  million  per  year 
(0.17% of GDP), mostly for measures on clean air 
and noise (108). 

(107) European  Commission,  DG  Environment,  Environmental 
investment  needs  &  gaps  assessment  programme,  2025 
update. Expressed in 2022 prices. 

(108) European  Commission,  DG  Environment,  Environmental 
investment  needs  &  gaps  assessment  programme,  2025 
update. Expressed in 2022 prices. 

63 

 
 
 
 
Table A7.1:  Key clean industry and climate mitigation indicators: Ireland 

Source:  Net zero industry: European Commission: The net-zero manufacturing industry landscape across Member States: final 
report, 2025. Automotive industry transformation: Eurostat. Critical raw materials: Eurostat. Climate mitigation: See 
footnotes in the "climate mitigation" section; reduction of effort sharing emissions: EEA greenhouse gases data viewer; European 
Commission, Climate Action Progress Report, 2024. Sustainable industry: Years of life lost due to PM2.5: Eurostat and EEA, 
Harm to human health from air pollution in Europe: burden of disease status, 2024. Air pollution damage: EEA, EU large industry 
air pollution damage costs intensity, 2024. Emissions covered: As, benzene, Cd, Cr, Hg, NH3, Ni, NMVOC, NOX, Pb, dioxins, PM10, 
PAH, SOX. Water pollution intensity: EEA, EU large industry water pollution intensity, 2024. Releases into water covered from 
cadmium, lead, mercury, nickel. Other indicators: Eurostat. 

64 

Strategic autonomy and technology for the green transitionNet zero industryOperational manufacturing capacity 2023- Solar PV (c: cell, w: wafer, m: module), MW-- Electrolyzer, MW-- Wind (b: blade, t: turbine, n: nacelle), MW-- battery, MWh-Automotive industry transformation201720182019202020212022202320182021Motorisation rate (passenger cars per 1000 inhabitants), %441442450452448443453539561New zero-emission vehicles, electricity motor, %0.470.972.914.418.4714.7518.471.038.96Critical raw materials201720182019202020212022202320182021Material import dependency, %30.728.629.331.531.533.524.222.6Climate mitigationTrendIndustry decarbonisation201720182019202020212022202320172022GHG emissions intensity of manufacturing production, kg/€0.070.070.070.050.050.04 0.340.27Share of energy-related emissions in industrial GHG emissions44.243.540.440.737.741.141.344.842.5Energy-related GHG emissions intensity of manufacturing44.041.639.833.727.221.6-158.4132.9and construction, kg/€Share of electricity and renewables in final energy consumption35.934.033.834.234.235.736.243.344.2in manufacturing, %Energy intensity of manufacturing, GWh/€0.260.240.230.190.150.120.161.291.09Share of energy-intensive industries in manufacturing production0.77.3GHG emissions intensity of production in sector [...], kg/€- paper and paper products (NACE C-17)0.090.110.050.080.040.050.04-0.730.68- chemicals and chemical products (NACE C20)-----0.00--1.251.26- other non-metallic mineral products (NACE C23)3.673.533.262.993.593.353.00-2.532.24- basic metals (NACE C24)4.484.253.905.209.0211.857.48-2.793.49Reduction of effort sharing emissions20182019202020212022202320182023GHG emission reductions relative to base year, % -2.7-3.8-10.3- domestic road transport-5.8-5.7-20.4-15.1-10.1-9.81.45.2- buildings-18.3-20.7-17.0-20.0-27.7-32.321.432.92005202120222023TargetWEMWAMEffort sharing: GHG emissions, Mt; target, gap, %47.746.445.942.8-42.0-33.1-16.6Sustainable industryTrendCircular economy transition20182019202020212022202320182021Material footprint, tonnes per person16.623.419.113.714.011.814.715.0Circular material use rate, %1.9        1.8        1.8        2.1        2.1        2.3        11.611.1Resource productivity, €/kg2.7        2.9        3.2        3.8        4.3        4.7        2.12.3Zero pollution industryYears of life lost due to PM2.5, per 100,000 inhabitants149      142      114      111      192      -702571Air pollution damage cost intensity, per thousand € of GVA    2.9            27.5      Water pollution intensity, kg weighted by human factors per bn € GVA    0.1   0.9IrelandEU-27IrelandEU-27IrelandEU-27 
 
   
 
ANNEX 8: AFFORDABLE ENERGY TRANSITION 

This  annex  outlines  the  progress  made  and 
the  ongoing  challenges  faced  in  enhancing 
energy  competitiveness  and  affordability, 
while advancing the transition to net zero. It 
examines  the  measures  and  targets  proposed  in 
the  final  updates  to  the  national  energy  and 
climate plans (NECPs) for 2030. 

household  retail  prices  also  remained  above  the 
true  for 
EU  average.  This  was  particularly 
electricity,  with  a  year-on-year  increase,  despite 
lower  network  costs  than  EU  average  (20,6%  of 
the final price against 27,2% at EU-average level) 
and  lower  VAT  level  (8,6%  against  14,6%  at  EU 
average level). 

Despite  high  ambitions  and  substantial 
efforts  in  terms  of  support  for  deployment 
of  renewable  energy  sources  (RES),  complex 
permitting process and lack of grid flexibility 
the  decarbonisation  of 
are  hampering 
Ireland’s energy mix. Good progress in terms of 
renovation  of  buildings  and  energy  efficiency 
heating  is  counterbalanced  by  an  increase  in 
overall energy consumption.  

Energy prices and costs 

Graph A8.1: Retail energy price components for 
household and non-household consumers, 2024 

(i) For household consumers, consumption band is DC for 
electricity and D2 for gas. Taxes and levies are shown 
including VAT. 
(ii) For non-household consumers, consumption band is ID for 
electricity and I4 for gas. Taxes and levies are shown 
excluding VAT and recoverable charges, as these are typically 
recovered by businesses. 
Source: Eurostat 

Ireland’s retail energy prices dropped slightly 
in  2024,  except  for  household  electricity 
price,  the  third  highest  in  the  EU.  Retail 
prices for non-household consumer remained 
higher or close to the EU average, despite low 
taxes  and  levies  (excluding  VAT)  which  accounted 
for  1,6%  of  electricity  prices  and  4,2%  of  gas 
prices  (significantly  below  than  the  respective  EU 
averages  of  15,4%  and  11,6%).  Similarly, 

Graph A8.2: Monthly average day-ahead wholesale 
electricity prices and European benchmark 
natural gas prices (Dutch TTF) 

(i) the Title Transfer Facility (TTF) is a virtual trading point for 
natural gas in the Netherlands. It serves as the primary 
benchmark for European natural gas prices. 
(ii) CWE gives average prices in the central-western European 
market (Belgium, France, Germany, Luxembourg, the 
Netherlands and Austria). 
Source: S&P Platts and ENTSO-E 

in 

in 

spikes 

occurred 

With an average of 108.7€/MWh in 2024 (EU 
average  84.7€/MWh)  (109),  Ireland  had  the 
third-highest  wholesale  electricity 
EU’s 
prices. 
the 
Price 
spring/summer, 
line  with  broader  Central 
Western  European  (CWE)  markets,  amid  rising 
natural  gas  costs  and  Ireland’s  continued  reliance 
on gas for electricity generation – the third-largest 
share  in  the  EU  at  49%  of  the  electricity  mix  in 
2024.  In  the  autumn  and  winter,  prices  increased 
further, exacerbated by the Dunkelflaute (a period 
of  low  wind-  and  solar  generation)  in  north-
western  Europe.  Increased  electricity  demand  in 
Ireland  –  driven  by  data  centres  and  a  colder 
to  higher  consumption 
autumn/winter  – 
throughout  the  year,  particularly  from  April  to 
December  (+2.5%  vs  the  same  period  in  2023). 
Although  the  supply-demand  gap  was  partially 
offset  by  higher  net  imports  (+69%),  lower  wind 

led 

(109) Fraunhofer (ENTSO-E data) 

65 

 
 
 
 
 
 
 
generation  (-5.8%)  (110)  due  to  meteorological 
conditions and limited  non-fossil flexibility further 
exacerbated the supply-demand gap. Natural gas-
fired generation was the main source of electricity, 
particularly  during  evening  peak  hours  in  the 
summer  and  throughout  the  entire  day  in  winter. 
Consequently,  and  more  so  than  in  2023,  these 
conditions  led  to  concentrated  price  spikes  during 
evening  hours 
in  November  and 
December, when wind output declined significantly 
(-17.5%) (111), and demand remained high (112). 

(18h–21h) 

Flexibility and electricity grids  

In  terms  of  interconnectivity,  cross-border 
capacity  remains  limited  because  Ireland  is 
not yet connected to the continental grid. The 
Single  Electricity  Market  (SEM)  of  Ireland  and 
Northern  Ireland  is  a  single  bidding  zone  that  is 
currently not connected to any other in the EU. To 
restore  Ireland’s  connection  to  the  EU  post-Brexit 
and  strengthen  security  of  supply  as  well  as 
renewable  energy  integration,  it  is  key  for  Ireland 
to  ensure  the  timely  completion  of  the  700 MW 
Celtic  Interconnector  Project  of  Common  Interest 
(completion  is  currently  expected  in  2026).  This 
will  create  a  new  bidding  zone  border  between 
Ireland  and  France,  which  has  been  assigned  to 
the  Core (113)  capacity  calculation  region  (CCR). 
New  interconnection  projects  with  EU  Member 
States  should  continue  to  be  evaluated  in  a 
regional  context  to  support  Ireland’s  renewable 
energy  ambitions.  Continuing 
support  and 
engagement  in  the  context  of  the  North  Seas 
Energy  Cooperation  (NSEC)  High  level  group  is 
important 
to 
strengthen  interconnection  with  the  UK  (including 
Northern Ireland), could be further advanced.  

regard.  New  projects 

this 

in 

is  key  for 

It 
Ireland  to  continue  the 
modernisation  of  its  national  grid,  because 

(110) In Apr – Dec 2024, compared to same period in 2023 

(111) In Nov – Dec 2024, compared to same period in 2023 

(112) Yearly  electricity  data,  Ember  (consumption  and  generation 

data throughout the paragraph) 

(113) Core  is  the  capacity  calculation  region  (CCR)  which  covers 
Belgium,  Czechia,  Germany,  France,  Croatia,  Hungary,  the 
Netherlands, Austria, Poland, Romania, Slovenia and Slovakia 
(and, once connected, Ireland). A CCR is a group of countries 
that calculate cross-border electricity trade flows together. 

66 

additional  capacity  and  more  flexibility  are 
required  to  ensure  security  of  supply  and  to 
meet  Ireland’s  target  of  80%  renewable 
electricity  by  2030.  Ireland  has  put  in  place  a 
fast-track  permit-granting  process,  known  as 
strategic 
infrastructure  development  (SID)  for 
strategic  energy  infrastructure  projects,  such  as 
projects  of  common  interest  and  projects  of 
mutual  interest.  According  to  this,  a  decision 
should  be  issued  on  these  projects  within  a 
statutory  period  of  18  weeks  from  the  expiry  of 
the period for making submissions or observations. 
However,  the  nature  and  scale  of  the  projects 
involved  and  their  complexity  mean  that  the 
statutory  deadline  is  often  not  met  and  the 
permitting  process  can  take  up  to  24-36 months. 
End  of  2024,  the  government  announced  an 
investment  of  EUR  750  million  to  further develop 
electricity infrastructure. 

The constraints of the electricity system and 
networks in Ireland have caused curtailments 
of  renewable  electricity  to  significantly 
increase  over  the  last  couple  of  years.  In 
2023,  the  dispatch-down  energy  from  wind 
resources  was  1 124 GWh  (8.9%  of  the  total 
available  wind  energy)  and  39 GWh  for  solar 
resources  (9.5%  of  the  total  available  solar 
energy) (114).  Estimates for 2024 indicates a 14% 
wind energy curtailment.  

Ireland  has  ambitious  goals  for  energy 
storage  and  demand  response,  but  enabling 
legislation  for  grid  flexibility  is  still  lacking. 
Ireland  aims  to  achieve  a  level  of  20-30%  of 
electricity demand being flexible by 2030, with an 
intermediary target of 15-20% flexibility by 2025. 
The  national  energy  demand  strategy  aims  to 
achieve  these  targets  by  facilitating  the  active 
participation  of  citizens  and  businesses  in  the 
energy  market.  However,  the  necessary  enabling 
legislation  for  demand-side  response  (DSR)  and 
storage to sell and buy electricity in the day-ahead 
and  intraday  markets  in  a  non-discriminatory 
manner  has  not  been  implemented  yet.  Equal 
participation  is  allowed  in  the  balancing  market 
and  battery  storage  participates  in  the  ancillary 
services market. Currently, batteries represent only 
a  1.03  GW  (115)  capacity.  Long  term  storage  is 

(114) Annual-Renewable-Constraint-and-Curtailment-Report-

2023-V1.0.pdf. 

(115) European Energy Storage Inventory | JRC SES 

 
 
 
expected  to  represent  1.7 GW  by  2030,  based  on 
Ireland’s NECP.  

intervals. 

However, 

Despite  an 
increasing  roll-out  of  smart 
meters,  the  empowerment  of  citizens  and 
their  participation  in  the  energy  system 
remain  rather  limited.  In  2023,  69%  of  Irish 
households  were  equipped  with  a  smart  meter, 
with access to near real-time consumption data at 
30-minute 
household 
consumers  did  not  have  access  to  dynamic-price 
contracts  in  2023  and  could  only  access  market-
based offers. This meant that consumers could not 
compare  dynamic  contracts  using  a  comparison 
tool.  The  fact  that  Ireland  did  not  offer  any  data 
on  the  uptake  of  contracts  indicates  that  it is  not 
actively  monitored.  Only  3%  of  households 
(67 GWh  overall)  and  3%  of  non-household 
consumers  (5 GWh  overall)  generate  their  own 
electricity in Ireland.  

Household 

decade (116). 

In  2023,  electricity  accounted  for  24.8%  of 
Ireland’s  final  energy  consumption  (FEC) 
(somewhat  above  the  EU  average  of  22.9%) 
and  this  share  has  slightly  increased  in  the 
last 
electricity 
consumption  accounts  for  27.3%  of  FEC  while 
represents 
industry’s  electricity 
28.0%  (see  also  the  Clean  Industry  and  Climate 
Mitigation  Annex).  For  the  transport  sector,  this 
share remains negligible at 0.7%. Further progress 
in electrification across sectors would be crucial to 
cost-effectively  decarbonise  the  economy  and 
bring 
renewable 
generation to consumers. 

the  benefits  of  affordable 

consumption 

Renewables and long-term contracts 

Renewables capacity increased but Ireland is 
at  risk  of  missing  its  2030  targets.  Ireland’s 
installed  renewable  electricity  capacity  increased 
by  11%  in  2024,  a  slight  slowdown  compared  to 
Installed  solar 
2023, 
capacity  steadily 
to 
1340 MW,  while  installed  wind  capacity  exceeded 
increase 
4 900 MW 

increased  by  51%  up 

reaching  6606MW (117). 

(only  a  4,3% 

in  2024, 

(116) The  CAGR  (compound  annual  growth  rate)  was  1.7% 
between  2013  and  2023.  The  minimum/maximum  shares 
were 20.8% and 24.8% respectively. 

compared to 2023). Ireland has ambitious plans to 
reach more than 10 GW of installed wind capacity 
by 2030. More than 5 GW of this will be offshore, 
supported  by  the  Offshore  Renewable  Electricity 
Support Scheme. In 2024, RES accounted for 45% 
of  Ireland  electricity  mix  (vs  the  EU  overall  RES 
share  of  47%),  stagnating  compared  with 
2023 (118). 
its 
is  thus 
intermediary RED target. 

likely  to  miss 

Ireland 

Graph A8.3: Ireland's installed renewable capacity 
(left) and electricity generation mix (right) 

“Other” includes renewable municipal waste, solid biofuels, 
liquid biofuels, and biogas. 
Source: IRENA, Ember 

a 

of 

by 

for 

passing 

renewables 

consultations 

improve  the 

In  2023  and  2024,  Ireland  took  several 
legal 
important  steps  to 
project 
framework 
permitting. This includes consolidating renewable 
energy  planning;  introducing  statutory  timelines 
for  decision-making  processes;  and  strengthening 
new 
public 
comprehensive  Planning  and  Development  Bill. 
There  is  room  for  improvement  regarding  (i) the 
introduction 
permit-granting 
simplified 
procedures  and  policy  support  for  repowering 
existing  renewable  energy  installations  and  (ii) 
regulatory 
the  establishment  of 
facilitating 
energy  projects. 
renewable 
for 
sandboxes 
Positions are vacant, but permitting authorities are 
finding  it  difficult  to  recruit  relevant,  qualified 
staff. This results in human resources constraints. 
The adoption of the first Designated Maritime Area 
Plan  for  offshore  renewable  energy  in  November 
2024 (South Coast) is a step in the right direction, 
and  further  designation  of  areas  for  offshore 
renewable energy is highly anticipated.  

Ireland  published  its  schedule  of  offshore 
wind  auctions  until  2028  on  the  Union 
Renewable Development Platform. Ireland also 

(117) IRENA 2025: Renewable Energy Capacity Statistics 2025 

(118) Yearly electricity data, Ember. 

67 

 
 
 
 
pledged  a  total  additional  capacity  of  3 GW 
onshore  wind  and  5 GW  offshore  wind  by  2030 
under  the  European  Wind  Power  Action  Plan. 
However,  the  annual  auction  volumes  mentioned 
on these two platforms differ. 

identified  power  purchase 
Ireland  has 
important 
as 
(PPAs) 
an 
agreements 
energy 
renewable 
its 
of 
component 
ambitions.  The  PPA  market  has  been  growing 
(both within support schemes and corporate PPAs) 
following  the  2022  Roadmap  on  PPAs.  Ireland’s 
onshore  auction  design  is  based  on  contracts  for 
difference that are conditional on the signature of 
a commercial PPA. 

Energy efficiency 

(FEC) 

increased  by  0.7% 

Ireland’s  energy  intensity  had  improved  in 
recent years, but it increased by 4% in 2023. 
Primary  energy  consumption  (PEC)  decreased  by 
2.0%  to  14.06 Mtoe  in  2023  but  final  energy 
consumption 
to 
12.00 Mtoe.  FEC  increased  in  transport  by  5.3% 
and in the service sector by 4.5%  – driven by the 
increasing number of datacentres in Ireland, which 
accounted  for  21%  of  electricity  consumption  in 
2023.  FEC  decreased 
in  the  residential  and 
industrial  sectors  by  6.8%  and  2.0%  respectively. 
The recast Energy and Efficiency Directive requires 
Ireland to achieve a PEC of 11.29 Mtoe and a FEC 
of 10.45 Mtoe by 2030.  

important  part 

Renewable  energy  and  decarbonisation  of 
cooling  will  play  an 
in 
Ireland’s  heating  and  cooling  policies.  Ireland 
has outlined measures to unlock the development 
of  infrastructure  for  high-efficiency  cogeneration, 
focusing  on  district  heating  and  cooling  using 
waste  heat  and  RES  (including  in  the  industrial 
sector). Key measures  include  establishing  district 
heating centre of excellence, updating the Support 
Scheme  for  Renewable  Heat  and  introducing  a 
Renewable Heat Obligation. Ireland aims to install 
in  new  and  existing 
680 000  heat  pumps 
dwellings  by  2030.  The  development  of  a 
comprehensive  geothermal  energy  strategy  will 
further 
towards 
the 
decarbonisation and efficient energy use. However, 
Ireland  has  not  yet  notified  its  comprehensive 
heating  and  cooling  assessment,  which  could 
identify  the  potential  for  the  application  of  high-

support 

efforts 

efficiency  cogeneration  and  efficient  district 
heating  and  cooling  in  line  with  the  Energy 
Efficiency Directive. 

With  regard  to  energy  consumption 
in 
buildings,  the  2022  residential  final  energy 
consumption data decreased by 4% between 
2018  and  2022  (after  applying  climate 
correction), and data from 2023 suggest that 
this trend has continued. This is consistent with 
the  national  long-term  renovation  strategy,  which 
envisages a 12% reduction of energy consumption 
by  buildings  by  2030  (compared  with  2020). 
Ireland has made significant progress in promoting 
energy-efficient  renovations  through  government 
support  programmes.  The  Home  Energy  Grants 
scheme,  which  is  managed  by  the  Sustainable 
Energy Authority of Ireland (SEAI(119), together with 
the Better Energy Warmer Home scheme provides 
financial assistance to homeowners for a range of 
energy upgrades.  

In  2022,  heating  and  cooling  accounted  for 
79%  of  Ireland’s  residential  final  energy 
consumption, and approximately 33 000 heat 
pumps  were  sold  in  2023  (an  increase  of 
63%  on  2022).  Irish  building  regulations  require 
20% of energy to come from renewable sources in 
new  buildings,  so  heat  pumps  are  the  default 
choice in most cases. There are several measures 
in  place  to  support  energy  renovations  (including 
support for installation of heat pumps, covering up 
to EUR 6 500 of the cost). 

Ireland  deploys  an  effective  and  supportive 
national  financing  framework  that  mobilises 
energy  efficiency  investment  (mainly  in  the 
form of grants, financial instruments and tax 
implementing 
Ireland  continued 
incentives). 
several  relevant  financing  measures  in  2024 
(particularly  the  Pathfinder  Programme,  which 
supports sustainable solutions in the public sector). 
Ireland  adequately  deployed  financial instruments 
for  energy  efficiency  (e.g. the  Energy  Efficiency 
Obligation System, the Sovereign Green Bond and 
the National  Energy  Efficiency  Fund)  that  address 
all sectors. 

(119) Subsidies for energy efficiency retrofits of residential houses 

and solar PV installation – Policies – IEA. 

68 

 
 
Security of supply and diversification  

Ireland  has  made  progress  on  renewables, 
but  its  overall  energy mix  in  2023  remained 
heavily  reliant  on  fossil  fuels.  Oil  and  natural 
gas  accounted  for  49.4%  and  28.8%  of  gross 
inland  consumption respectively  (120).  Renewables 
(together with biofuels) accounted only for 13.9% 
(121).  This  reliance  underscores  the  importance  of 
Ireland’s  ongoing  efforts  (related  to  the  energy 
transition)  to  diversify  its  energy  sources  and 
strengthen energy security. 

Fossil fuel subsidies 

In  2023,  environmentally  harmful  (122)  fossil 
fuel  subsidies  without  a  planned  phase-out 
before  2030  represented  0.37%  (123)  of 
Ireland’s  GDP  (124),  below  the  EU  weighted 
average of 0.49%. Tax measures accounted for 
61.9%  of  this  volume,  while  direct  grants  and 
income/price  support  represented  22.6%  and 
15.4%,  respectively.  However, 
Ireland’s  2023 
Effective  Carbon  Rate  (125)  averaged  EUR  54.82 
per tonne of CO₂, below the EU weighted mean of 
EUR 84.80 (126). 

(120) Electricity  and  heat  are  excluded  to  avoid  double  counting 

focusing on primary energy sources. 

(121) Gross Inland Consumption, 2023 Energy Balances - Eurostat 
(122) Direct  fossil  fuel  subsidies  that  incentivise  maintaining  or 
increasing  in  the  availability  of  fossil  fuels  and/or  use  of 
fossil fuels. 

(123) Numerator is based on volumes cross-checked with the Irish 
authorities.  For  all  Member  States,  it  includes  public  R&D 
expenditures  for  fossil  fuels  as  reported  by  the  IEA  (Energy 
Technology RD&D Budgets) and excludes, for methodological 
consistency,  excise  tax  exemption  on  kerosene consumed  in 
intra-EU27 air traffic. 

(124) 2023 Gross Domestic Product at market prices, Eurostat 

(125) The  Effective  Carbon  Rate  is  the  sum  of  carbon  taxes,  ETS 
permit  prices  and  fuel  excise  taxes,  representing  the 
aggregate effective carbon rate paid on emissions. 

(126) OECD (2024), Pricing Greenhouse Gas Emissions 2024. 

69 

 
 
Table A8.1:  Key Energy Indicators 

Source: Eurostat, ENTSO-E, S&P Platts 

70 

20212022202320242021202220232024Household consumer - Electricity retail price (EUR/KWh)0.2847          0.2956              0.3310              0.3593          0.2314              0.2649          0.2877          0.2879          Energy & supply [%]43.0%78.0%116.0%84.9%36.6%54.3%55.6%47.8%Network costs32.9%34.7%23.9%20.6%26.7%25.3%24.8%27.2%Taxes and levies including VAT24.2%-12.7%-39.8%-5.5%36.7%20.3%19.6%25.0%VAT11.3%10.9%11.3%8.6%14.5%13.4%13.8%14.6%Household consumer - Gas retail price0.0663          0.1060              0.1603              0.1312          0.0684              0.0948          0.1121          0.1128          Energy & supply49.0%57.5%68.2%61.1%43.7%61.0%64.5%53.9%Network costs31.7%27.1%18.8%23.6%22.5%17.3%17.1%18.3%Taxes and levies including VAT19.3%15.4%13.0%15.4%33.8%21.7%18.4%27.8%VAT11.2%9.3%8.0%8.2%15.5%11.6%10.2%13.6%Non-household consumer - Electricity retail price0.1414          0.2234              0.2357              0.2217          0.1242              0.1895          0.1971          0.1661          Energy & supply75.1%78.7%83.4%81.0%43.0%66.5%63.0%55.8%Network costs8.9%10.2%11.1%11.1%15.8%10.7%11.9%15.5%Taxes and levies excluding VAT7.1%4.2%-1.3%1.6%30.4%9.9%11.2%15.4%Non-household consumer - Gas retail price0.0293          0.0545              0.0601              0.0503          0.0328              0.0722          0.0672          0.0517          Energy & supply62.7%72.9%75.5%71.1%66.2%77.3%77.3%68.7%Network costs24.5%16.4%15.2%18.8%7.7%3.8%5.3%7.1%Taxes and levies excluding VAT5.1%4.2%3.5%4.2%12.5%6.1%7.3%11.6%Wholesale electrity price (EUR/MWh)135.8226.8122.1108.4111.0233.299.184.7Dutch TTF (EUR/MWh)n/an/an/an/a46.9123.140.534.420172018201920202021202220232024Gross Electricity Production (GWh)30,997          31,278              31,122              32,460          32,028              34,045          31,853          -Combustible Fuels22,525       21,546           19,771           19,440       20,968          21,551       18,098       -Nuclear-              -                 -                 -              -                 -              -              -Hydro895             932                1,132             1,224         1,036            948             1,238         -Wind7,567         8,783             10,185           11,740       9,940            11,393       11,863       -Solar10               18                  34                  55               85                  149             646             -Geothermal-              -                 -                 -              -                 -              -              -Other Sources-              -                 -                 -              -                 4                 7                 Gross Electricity Production [%]Combustible Fuels72.7%68.9%63.5%59.9%65.5%63.3%56.8%-Nuclear0.0%0.0%0.0%0.0%0.0%0.0%0.0%-Hydro2.9%3.0%3.6%3.8%3.2%2.8%3.9%-Wind24.4%28.1%32.7%36.2%31.0%33.5%37.2%-Solar0.0%0.1%0.1%0.2%0.3%0.4%2.0%-Geothermal0.0%0.0%0.0%0.0%0.0%0.0%0.0%-Other Sources0.0%0.0%0.0%0.0%0.0%0.0%0.0%-Net Imports of Electricity (GWh)-679-28645-1521,5882523,275-As a % of electricity available for final consumption -2.5%-0.1%2.3%-0.5%5.3%0.8%10.5%-Electricity Interconnection [%]7.4%7.1%6.3%6.6%0.0%0.0%0.0%0.0%Share of renewable energy consumption - by sector [%]Electricity30.3%33.3%36.5%39.1%37.7%37.4%40.4%-Heating and cooling6.6%6.4%6.3%6.3%5.6%5.5%7.9%-Transport7.4%7.2%8.9%10.2%4.6%5.8%7.6%-Overall10.5%10.9%12.0%16.2%13.0%13.1%15.3%-20202021202220232020202120222023Import Dependency [%] 71.1%77.0%79.2%77.9%57.5%55.5%62.5%58.3%of Solid fossil fuels 57.9%106.4%126.8%86.4%35.8%37.2%45.9%40.8%of Oil and petroleum products 103.2%98.4%100.6%99.5%96.8%91.7%97.8%94.5%of Natural Gas 63.6%71.3%73.9%77.5%83.6%83.6%97.6%90.0%Dependency from Russian Fossil Fuels [%]of Natural Gas 0.0%0.0%0.0%0.0%41.0%40.9%20.7%9.3%of Crude Oil0.0%0.0%0.0%0.0%25.7%25.2%18.4%3.0%of Hard Coal23.6%80.7%35.7%0.0%49.1%47.4%21.5%1.0%2017201820192020202120222023Gas Consumption (in bcm)5.3                 5.5                     5.5                     5.6                 5.2                    5.3                 4.9                 Gas Consumption year-on-year change [%]2.5%3.9%1.5%0.3%-6.2%1.5%-7.7%Gas Imports - by type (in bcm)1.7                 2.0                     2.9                     3.4                 3.7                    3.8                 3.7                 Gas imports - pipeline1.7                 2.0                     2.9                     3.4                 3.7                    3.8                 3.7                 Gas imports - LNG0.00.00.00.00.00.00.0Gas Imports - by main source supplier [%]United Kingdom100.0%100.0%100.0%100.0%100.0%100.0%100.0%IrelandEU 
 
 
 
     
 
ANNEX 9: CLIMATE ADAPTATION, PREPAREDNESS AND ENVIRONMENT 

to  build  up 

Ireland  is  exposed  to  climate  risks,  meriting 
resilience. 
urgent  action 
Additional action could include increasing its 
preparedness  and  its  water  resilience  and 
reducing  the  economy’s  impact  on  nature. 
Tackling  the  risks  of  flooding,  pollution  in  surface 
water  bodies  and  degrading  biodiversity  remain 
key  challenges.  Despite  the  high  level  of  water 
availability,  Ireland’s  water  environment  is  under 
pressure as water quality is not improving, nutrient 
levels  remain  too  high,  and  sustainable  water 
management  remains  a  major  environmental 
issue.  The  two  most  significant  causes  of  water 
pollution  and 
the  water 
degradation 
environment  are  agriculture  and  sewage  pollution 
(127).  Protecting  and  restoring  key  ecosystems 
long-term 
maintain 
would 
competitiveness of important economic sectors. 

help 

the 

of 

broader  services  for  hundreds  of  thousands  of 
people (130). 

Climate change is already having a negative 
effect on Ireland’s economy and society, but 
adaptation  solutions  could  significantly 
alleviate the impacts. Between 1980 and 2023, 
Ireland  recorded  68  fatalities  and  almost  EUR 4 
billion  in  economic  losses  due  to  weather  and 
climate-related  extreme  events.  However,  only 
14%  of  the  economic  damages  were  insured, 
compared  to  62%  in  Denmark,  which  had  the 
highest  coverage  rate  in  the  EU  (131).  Adaptation 
can  significantly  reduce  the  negative  effect  of 
climate  change  impacts  on  the  economy  and 
society.  By  2040,  action  to  adapt  to  climate 
change  could  reduce  gross  damages  from  over 
2.7% of Irish gross domestic product (GDP) to less 
than 1% of GDP, at a cost of 0.25% of GDP (132). 

Climate adaptation and preparedness 

Ireland  is  vulnerable  to  the  impacts  of 
climate change, particularly floods, droughts 
and  storms.  More  frequent  extreme  weather 
events  resulting  from  climate  change  threaten  to 
disrupt  transport  systems,  damage  infrastructure 
and strain water supply networks. Climate change 
also increases the risks of water- and food-borne 
invasive  species  (128). 
diseases,  wildfires  and 
Ireland  can  expect  more  dry  periods  and  heavy 
rainfall  events,  as  well  as  greater  risks  of  storm 
surge  and  coastal  flooding.  2024  was  Ireland’s 
fourth warmest year on record and 7 of the top 10 
warmest years have occurred since 2005. In 2024, 
many  instances  of  heavy  rainfall  led  to  flooding, 
and  violent,  storm-force  winds  were  reported 
during  storms  Isha  (January  2024)  and  Darragh 
(December  2024)  (129).  In  January  2025,  Storm 
Éowyn brought new wind speed records to Ireland 
and  significantly  impaired  access  to  power  and 

(127) Environmental  Protection  Agency, 

Ireland’s  Environment: 

Water, Link. 

(128) Department 

of 

the 

Environment, 

Climate 

and 

Communications, 2023, Climate Action Plan 2024, Link. 

(129) Met  Éireann,  The  Irish  Meteorological  Service,  2024,  Annual 

Climate Statement for 2024, Link. 

71 

It 

is 

the 

Ireland  has  a  well-established  adaptation 
policy  framework  but  there  is  scope  to 
develop  it  further,  notably  in  monitoring 
climate impacts and in coastal management. 
The  Climate  Action  and  Low  Carbon  Development 
(Amendment)  Act  2021  provides 
legal 
Ireland’s  transition  to  climate 
framework  for 
implemented  through  annual 
resilience. 
climate  action  plans,  with one  of  the  23  chapters 
in  the  2024  version  dedicated  to  adaptation. 
Ireland’s  second  statutory  national  adaptation 
framework was published in June 2024, replacing 
the  2018  version.  The  framework  sets  out  the 
national  strategy  to  reduce 
Ireland’s  climate 
vulnerability  and  outlines  a  whole-of-government 
and  society  approach.  It  contains  objectives  and 
proposals, 
on 
preparing  sectoral  adaptation  plans,  improving 
monitoring,  evaluation,  open  data  sharing,  skills 
targeted 
development, 
climate adaptation investments (133).  

including  updated  guidance 

research  funding  and 

(130) Met Éireann, The Irish Meteorological Service, 2025,  Climate 

Statement for January 2025, Link. 

(131) EEA,  2024,  Economic  losses  from  weather-  and  climate-

related extremes in Europe, Link. 

(132) De  Bruin,  K.  et  al.,  2024,  Policy  Brief  on  Economic  Costs  of 
Climate  Change  Impacts  and  Adaptation  in  Ireland:  A 
Sectoral Analysis on Five Climate Change Impacts, Link. 

(133) Department 

of 

and 
Communications,  2024,  National  Adaptation  Framework 
(NAF), Link. 

Environment, 

Climate 

the 

 
 
 
 
 
 
Ireland  published  sectoral  adaptation  plans  in 
2019, which include action to integrate adaptation 
into  sectoral  policies,  identify  risks,  assess  costs 
and  benefits,  and  build  sectoral  capacity.  New 
sectoral  adaptation  plans  are  being  developed 
under  the  second  statutory  national  adaptation 
framework (NAF), with a deadline to complete the 
plans  by  the  end  of  Q3 2025.  Ireland’s  first 
National  Climate  Change  Risk  Assessment  is  due 
by March 2025. It is intended to guide adaptation 
planning  and  ensure  consistent  risk  assessment 
across sectors, fostering tailored solutions to boost 
resilience (134). To improve Ireland’s overall climate 
resilience, it could develop a coastal management 
plan to boost resilience in coastal areas and create 
a  national  climate  damage  register  to  track  the 
costs and impacts of extreme events and improve 
policy responses, as recommended by the Climate 
Change Advisory Council (135). 

Ireland’s  adaptation  framework  takes  a 
decentralised  approach,  based  on 
the 
national  adaptation  framework  (NAF)  and 
sectoral  adaptation  plans  (SAP).  However,  the 
Climate  Change  Advisory  Council  has  highlighted 
weaknesses in this approach, including inadequate 
monitoring and evaluation of SAP implementation, 
and 
in 
insufficient  resources  for  adaptation 
departments  and  agencies.  This  underscores  a 
need  for  greater  centralised  accountability  to 
ensure effective implementation (136). The National 
Adaptation  Steering  Committee,  chaired  by  the 
Department  of  the  Environment,  Climate  and 
Communications, oversees sectoral coordination of 
adaptation  policy.  The  department  also  oversees 
the NAF. Four Climate Action Regional Offices, led 
by  local  authorities,  address  regional  climate 
issues under the guidance of the department and 
a local authority management group (137). 

(134) European  Commission,  2024,  Ireland  -  Final  updated  NECP 

2021-2030, p. 183, Link. 

Water resilience 

is  an 

in  Europe.  However, 

Ireland  is  subject  to  only  marginal  levels  of 
water  stress,  mainly  from  electricity  cooling 
and  public  water  supply,  but 
it  faces 
increasing  pressure  due  to  growing  demand. 
Currently,  Ireland  has  one  of  the  highest  rates  of 
the 
water  availability 
biological  health  of  rivers  and  lakes  has  shown 
small  net  declines.  Although  concentrations  of 
levels  of 
nutrients  seem  to  have  stabilised, 
nitrogen  and  phosphorous  in  rivers  and  lakes  are 
still  too  high to  maintain  high  and  good  quality 
(138).  There 
surface  waters 
imbalance 
between areas where water availability is greatest 
(the  west  of  Ireland)  and  where  water  is  most 
needed  (the  east  of  Ireland).  Ireland’s  water 
productivity  is  considerably  above  the  levels  in 
other  Member  States,  at  EUR 240  per  m3  of 
abstracted water in 2022 and on an upward trend 
over a five-year period (139). The Water Exploitation 
Index Plus (WEI+) reached 1.1 in 2022, showing a 
slight  upward  trend  over  the  last  few  years,  but 
remaining  rather 
low  and  stable.  The  main 
consumers of water are the energy sector and the 
public water supply. The Irish water supply system 
has  little  excess  capacity  and  significant  leakage 
rates 
in  water 
infrastructure. It is estimated that almost 40% of 
all  water  due  to  be  delivered  to  households  and 
non-domestic  customers  in  2022  was  lost  due  to 
leakages  (140).  Pressure  on  the  water  supply 
system is exacerbated by the fact that Irish water 
suppliers  do  not  charge  households  for  water 
supply  or  wastewater  services,  and  it  is  not  clear 
when water excess use charges will be introduced. 

underinvestment 

due 

to 

Water  quality  in  Ireland  is  still  of  concern, 
and  the  latest  data  has  yet  to  be  assessed. 
Ireland  failed  to  submit  the  third  river  basin 
management  plan  (2022-2027)  under  the  Water 
Framework Directive on time (by March 2022) and 
the  Commission  has  not  been  able  to  include 
Ireland in its report on the assessment of the third 
plan to the European Parliament and Council. Data 

(135) Climate  Change  Advisory  Council,  2024,  Summary  for  All: 

(138) EPA, 2024, Water Quality in 2023 An Indicators Report, Link. 

Annual Review 2024, Link. 

(139) Measured  as  GDP  in  2010  chain  linked  volumes  over  total 

(136) Climate  Change  Advisory  Council,  2024,  Preparing  for 

fresh surface water abstracted in cubic metres. 

Ireland’s Changing Climate: Annual Review 2024, Link. 

(137) European  Commission,  2024,  Ireland  -  Final  updated  NECP 

2021-2030, Link. 

(140) Uisce  Éireann,  2023,  National 

Leakage  Reduction 
Programme  continues  in  Cork  as  Ovens  set  to  reap  the 
benefits, Link. 

72 

 
 
 
on  the  ecological  and  chemical  status  and 
potential are therefore not updated. Based on the 
reporting and data collected under the second plan 
published  in  2020,  100%  of  groundwater  bodies 
are reported as having a good quantitative status 
and  9%  failed  to  achieve  good  chemical  status. 
45.4% of all surface water bodies achieved a good 
ecological  status  (with  the  status  of  24.7% 
unknown). Only 6.9% are classified as having good 
(with  the  status  of  91.9% 
chemical  status 
unknown).  Despite  some  progress  and 
the 
adoption  of  new  legislation  in  June  2022,  the 
country  has  not  fully  complied  with  the  Water 
Framework Directive. The main issues are gaps in 
the  legal  framework  related  to  water  usage  and 
changes  to  natural  water  bodies.  The  main 
problem  affecting  Ireland’s  water  quality  and  the 
health  of  aquatic 
in 
life 
concentrations  of  nutrients  such  as  phosphorus 
and  nitrogen  (141).  Human  activities  such  as 
agriculture,  waste  water  and  forestry  are  the 
primary  cause  of  nutrients  leaching  into  water 
(142). 

increase 

the 

is 

treatment 

is  a 
Ireland’s  wastewater 
particular  cause  for  concern.  In  many  areas, 
wastewater  treatment  is  not  sufficient  to  prevent 
wastewater  discharges  from impairing the quality 
of  rivers,  estuaries,  lakes  and  coastal  waters. 
Ireland  has  experienced  serious  difficulties  in 
implementing  the  Urban  Wastewater  Treatment 
Directive.  Overall,  Ireland’s  compliance  rate  was 
47%  in  2020.  EU  funding  is  available  and  the 
recovery and resilience plan provides support to 10 
small  wastewater  treatment  plants  (WWTPs)  and 
feasibility studies to upgrade 20 WWTPs, for which 
swift  implementation  is  crucial.  However,  there  is 
scope 
to 
implement  further  projects  to  fully  comply  with 
the  requirements  of  the  Directive.  The  estimated 
investment  gaps  (see  Graph  A9.2)  for  water 
protection and water management are substantial. 
It  is  estimated  that  Ireland  will  face  a  financing 
gap  of  EUR 954  million  per  year  by  2027,  with 
around one third needed for waste water (EUR 323 
million per year). Drinking water measures require 
an  additional  EUR 51  million  per  year  and  the 
other  aspects  of  the  Water  Framework  Directive 

take  additional  measures  and 

to 

around  EUR 577  million  per  year  over  current 
levels  of  financing.  Increasing  investment  will  be 
even more important as the Directive was revised 
and  strengthened  in  2024(143).  Although  EUR 20 
million  from  the  Recovery  and  Resilience  Facility 
contribute  to  meeting  Ireland’s  investment  needs 
for  water  protection  and  management,  additional 
funding 
infrastructure 
development  such  as  wastewater  collection  and 
treatment,  water  reuse,  reducing  leaks  in  the 
networks and the general water supply, would help 
improve 
Additional 
water  management. 
investment  to  improve  monitoring  (quality  and 
quantity)  and  support  nature-based  solutions, 
flood  prevention  and  river  restoration  would  also 
contribute to this end. 

needed. 

Further 

is 

Biodiversity and ecosystems 

The  state  of  nature  remains  fragile  in 
Ireland,  reducing  the  country’s  climate 
resilience.  The  State  of  Nature  report  indicates 
that in Ireland, 15% of Annex I habitat types of the 
Habitats Directive have a favourable conservation 
status  indicating  “good  condition”,  slightly  above 
the EU average of 14.7%, and 57% of species  of 
Annex  II  have  favourable  conservation  status 
reported in 2019 (144), well above the EU average 
of  27%.  However,  the  majority  of 
Ireland’s 
important  habitats  have  an  unfavourable  overall 
conservation status, particularly raised and blanket 
bogs,  sand  dune  systems,  fens  and  mires,  natural 
grasslands  and  woodlands  (145).  The  situation  for 
forest  habitats  protected  under  the  Habitats 
Directive  is  still  concerning,  as  75%  of  the 
assessments  show  a  bad  conservation  status. 
Despite  improvements  to  the  conservation  status 
for  some 
of  some  habitats  and  species, 
ecosystems, 
and 
grasslands,  and  most  freshwaters,  forest  and 
dunes  habitats,  the  conservation  status  is  still 
unfavourable  and  on  a  downward  trend.  Some 
restoration  measures  have  received  EU  funding, 
but  more  action  will  be  necessary.  A  combination 

peatlands 

including 

all 

(141) According  to  early  EPA  data,  there  are  some  signals  of 
improvements  in  nitrates  concentrations  in  2024  –  Early 
insights  indicator  report:  Nitrogen  concentrations  in  selected 
major rivers, January-December 2024. 

(143) Directive  2024/3019,  of  27 November  2024.  The  deadline 

for transposition is 31 July 2027. 

(144) Conservation  status  and  trends  of  habitats  and  species  | 

European Environment Agency's home page 

(145) According to the assessment under Article 17 of the Habitats 

(142) EPA, 2024, Water Quality in 2023 An Indicators Report, Link. 

Directive. 

73 

 
 
 
of pressure from agricultural activities, notably air 
and  water  pollution  (146),  forestry  and  discharges 
from  wastewater 
climate 
impair 
resilience. The loss of biodiversity undermines the 
ecosystems’  ability  to  provide  services  such  as 
regulating  water  cycles,  maintaining  soil  health 
and  sequestering  carbon  that  help  mitigate  the 
effects of climate change. 

Ireland’s 

Compared to other Member States, Ireland is 
less  dependent  on  ecosystem  services,  but 
some  key  sectors  are  highly  dependent. 
Ireland  has  a  moderate  degree  of  supply  chain 
dependency  on  ecosystem  services,  at  15%  of its 
gross  value  added,  against  the  EU-27  average  of 
22%.  It  is  also  below  the EU  average  in terms  of 
overall dependency on ecosystem services and has 
the  lowest  degree  of  dependency  in  the  EU. 
However,  several  sectors  such  as  agriculture, 
forestry, fisheries, aquaculture, mining and metals, 
construction,  water  utilities  and  health  deliveries 
(see  Graph  A9.1)  are  particularly  dependent  on 
ecosystem  services.  100%  of  the  gross  value 
added  generated  by  these  sectors  is  directly 
dependent on ecosystem services. This means that 
failure  to  maintain  the  capacity  of  ecosystems  to 
deliver  services  could  entail  significant  costs  or 
even  stop  production  in  these  sectors.  Protecting 
and restoring key ecosystems would help maintain 
the long-term competitiveness of these sectors. 

Graph A9.1: Direct dependency(1) on ecosystem 
services(2) of the gross value added generated by 
economic sector in 2022 

(1) Dependency based on the sector’s own operations, 
excluding value chain operations within countries and across 
international value chains. A high dependency indicates a high 
potential exposure to nature-related shocks or deteriorating 
trends, which means that the disruption of an ecosystem  
service could cause production failure and severe financial 
loss. 
(2) Ecosystem services are the contributions of ecosystems to 
the benefits that are used in economic and other human 
activity, including provisioning services (e.g. biomass 
provisioning or water supply), regulating and maintenance 
services (e.g. soil quality regulation or pollination), and cultural 
services (e.g. recreational activities). 
Source: Hirschbuehl et al., 2025, The EU economy's 
dependency on nature, Link. 

is  crucial  to  meet 

Targeted  action  on  nature  protection  and 
restoration 
Ireland’s 
nature  restoration  targets.  When  including 
both Natura 2000 and other nationally designated 
protected  areas,  Ireland legally  protects  13.9%  of 
its land (EU average: 26%) and 2.3% of its marine 
areas  (EU  average:  12%).  Ireland  adopted  its 
fourth national biodiversity action plan (NBAP) for 
the  period  2023-2030  in January  2024.  The  plan 
sets out 194 actions to be carried out by a range 
of  government,  civil  and  private-sector  bodies  to 
achieve  Ireland’s  ‘Vision  for  Biodiversity’,  in  a 
whole-of-government 
whole-of-society 
approach. Ireland’s 4th NBAP sets out action under 
five  strategic  objectives:  (i)  adopt  a  whole-of-
government,  whole-of-society 
to 
biodiversity;  (ii)  meet  urgent  conservation  and 
nature’s 
restoration 

approach 

secure 

needs; 

and 

(iii) 

(146) According to the assessment under Article 17 of the Habitats 

Directive, Link. 

74 

0%20%40%60%80%100%AgricultureForestryFishery and acquacultureMining and metalsConstructionWater utilitiesHealthcare deliveryAviation travel and tourismFood beverages and tobaccoSupply chain and transportPublic services and othersElectricityChemical and materials industryElectronicsOil and gasReal estateHeat utilitiesAutomotiveRetail consumer goods and…Information technologyBanking and capital marketsInsurance and asset…Digital communicationsHighMediumLow 
 
      
contributions  to  people;  (iv)  enhance  the  evidence 
base for action on biodiversity; and (v) strengthen 
Ireland’s contribution to international biodiversity.  

that 

Ireland 

Ireland  could  restore  up  to  6 297  km2  of  the 
habitats listed in Annex I to the Habitats Directive, 
corresponding to up to 8.9% of the country (147). It 
is  estimated 
requires  annual 
investment of EUR 1.1 billion to effectively protect 
its  natural  capital,  mitigate  the 
and  restore 
impacts  of  climate  change,  and  maintain  the 
country’s  rich  biodiversity  (see  Graph  A9.2).  The 
current  level  of  financing  for  biodiversity  and 
is  around 
ecosystem  conservation 
EUR 419  million  per 
shortfall 
undermines  the  country’s  commitment  to  global 
long-term 
biodiversity  agreements  and 
economic and social development. 

in 
year. 

Ireland 

This 

its 

Graph A9.2: Investment needs and gaps in EUR 
million, in 2022 constant prices 

Source: European Commission, DG Environment, 
Environmental investment needs & gaps assessment 
programme, 2025 update. 

Sustainable agriculture and land use 

Ireland’s  carbon  removals  fall  short  of  the 
level  of  ambition  needed  to  meet  its  2030 
target  for  land  use,  land-use  change  and 

(147) European 

Commission, 

assessment 
accompanying  the  proposal  for  a  Regulation  on  nature 
restoration. 

Impact 

2022, 

forestry  (LULUCF).  Since  data  collection  started 
in 1990, Ireland has never had negative emissions. 
To meet its 2030 LULUCF target, additional carbon 
removals of  -0.6 million tonnes of CO2 equivalent 
(CO2eq)  are  needed  (148).  The  latest  available 
projections  show  a  gap  to  target  of  1.4  million 
for  2030(149).  Therefore, 
tonnes  of  CO2eq 
additional measures are crucial to reach the 2030 
target. 

in 

(UAA) 

Irish  agriculture 
remains  a  source  of 
greenhouse  gas  emissions  and  continues  to 
have  an  impact  on  air,  water  and  soils.  In 
2023, agriculture generated 20.8 million tonnes of 
CO2eq, 
representing  38%  of  all  emissions 
(excluding  LULUCF).  This  includes  15.5  million 
tonnes  of  CO2eq  from  enteric  fermentation  and 
manure  management  in  the  livestock  sector.  The 
utilised  agricultural  area 
Ireland 
decreased from 4.5 million hectares in 2012 to 4.2 
million  hectares  in  2023.  Despite  this  decrease, 
the gross nitrogen balance, which is an indicator of 
potential  nutrient 
from  agriculture, 
losses 
increased  from  35.1 kg/ha  in  2012  to  62.3 kg/ha 
in  2017  (latest  available  data).  According  to  data 
collected under the Nitrates Directive (150), 1.5% of 
groundwater  monitoring  stations 
Ireland 
recorded  average  nitrate  concentrations  above 
50 mg/l  between  2016  and  2019  (EU  average 
12.6%),  exceeding  the  healthy  threshold  for 
human consumption. In addition, the Irish report on 
implementation  of  the  Nitrates  Directive  (2020-
2023)  (151)  concludes  that  there  has  been  an 
overall  decline  in  water  quality  in  Ireland  since 
2016-2019,  with  rising  nitrate  concentrations  in 
groundwater,  rivers  and  transitional  waters.  This 
from 
report 
covers  pollution  by  nutrients 
agricultural 
covers 
approximately  70%  of  the  land  area  of  Ireland. 
The  Water  Framework  Directive  characterisation 
identifies  agriculture  as  the  main  source  of 
significant  pressure,  affecting  over  1 000 
waterbodies  or  approximately  60%  of  all 
waterbodies that are at risk of not achieving their 

Agriculture 

sources. 

in 

(148) National  LULUCF  targets  of  the  Member  States  in  line  with 

Regulation (EU) 2023/839. 

(149) Climate Action Progress Report 2024, COM/2024/498. 

(150) European  Commission,  2021,  Report  from  the  Commission 
on the implementation of Council Directive 81/676/EEC, Link. 

(151) Environmental Protection Agency, 2024, Article 10 Report for 

Ireland for the Period 2020-2023, p. 48, Link. 

75 

 - 200 400 600 800 1,000 1,200 1,400 1,600 1,800BiodiversityWaterBaselineGap 
      
 
 
environmental objective under the Directive (152). In 
2021,  pesticides  were  detected  in  9%  of  surface 
water  bodies,  below  the  EU  average  (21%).  The 
analysis of Ireland’s past river basin management 
plan  identified  nutrients  from  agriculture  as  a 
major  source  of  pressure  on  groundwater/surface 
water impairing the good status and an important 
factor for failure to meet the Directive’s objectives. 
In 2022, pesticides were detected in 9% of surface 
water bodies. 

to 

air 

due 

emission 

pollutant 

challenges. 

agricultural 

environmental 

Despite  a  slight  decrease 
in  ammonia 
emissions,  Ireland  still  does  not  meet  its 
ammonia  reduction  commitments.  This  is 
largely 
sources, 
particularly  cattle  farming,  which  poses 
The 
ongoing 
livestock  density  index  was  1.41  in  2020,  well 
above  the  EU  average  of  0.75.  According  to  the 
national 
inventory 
submission  (2024)  which  was  reviewed  by  the 
Commission,  Ireland  did  not  meet  its  ammonia 
the  National 
reduction  commitments  under 
Emission  Reduction  Commitment  Directive 
in 
2020, 2021 or in 2022. According to the review of 
the  national  air  pollution  control  programme 
adopted in 2024, Ireland is at a (‘medium’) risk of 
non-compliance  with  the  more  ambitious  2030 
emission  reduction  commitments  for  ammonia. 
Although  emissions  have  decreased  slightly  since 
2018,  from  141 000  tonnes  in  2018  to  128 000 
tonnes  in  2022(153),  emissions  in  2022  were  still 
above 2005 levels. The source of 99% of Ireland’s 
ammonia  emissions  is  agriculture,  mainly  cattle 
farming. 

of  UAA  under  organic  farming  by  2030.  It  set  a 
more  ambitious  target  (10%  by  2030)  under  the 
Irish climate action plan (154).  

to 

includes 

several  actions 

To  mitigate 
impact  of 
the  environmental 
agriculture,  multiple  measures  targeting  around 
32%  of  agricultural  land  focus  on  improving  the 
quality of water bodies. They include reducing the 
use  of  chemical  nitrogen,  precision  agriculture, 
using  low-emission  slurry  spreading  and  creating 
riparian  zones  to  reduce  runoff  to  water  courses. 
The  common  agricultural  policy  (CAP)  strategic 
support 
plan 
biodiversity  conservation  and  restoration,  such  as 
measures  to  maintain  non-productive  areas  and 
landscape features, extensive livestock production, 
planting  native  trees  and  hedgerows.  Overall,  the 
Irish  CAP  strategic  plan  has  allocated  EUR 1.5 
billion 
(European 
Agricultural  Guarantee  Fund),  supporting  practices 
to increase biodiversity and reduce water pollution. 
It  also  earmarks  some  EUR 1  billion  from  the 
European Agricultural Fund for Rural Development 
for  environmental  and  climate  objectives  under 
rural development measures (155). The bioeconomy, 
encompassing  the  production  and  processing  of 
biological  products,  contributed  EUR 20  billion  of 
added  value  to  the  country’s  gross  domestic 
product  in  2021.  The  food  industry  generated 
pharmaceuticals 
EUR 8 billion, 
generated 
agriculture 
and 
billion 
generated EUR 4.1 billion (156). 

for  eco-scheme  measures 

bio-based 

EUR 5.5 

Ireland  is  promoting  sustainable agricultural 
practices to reduce the significant impact the 
agricultural  sector  has  on  air,  water  and 
soils. The country is transitioning to a sustainable 
food  system  by  implementing  policies  to  reduce 
the  environmental  impact  of  agriculture.  In  2022, 
7.49% of agricultural land had landscape features 
such  as  woods  and  non-productive  grasslands, 
above  the  EU  average  of  5.6%.  Organic  farming, 
which  reduces  the  use  of  synthetic  fertilisers  and 
pesticides,  made  up  2.2%  of  Ireland’s  agricultural 
land in 2022, an almost 50% increase since 2012, 
but still at a low level. Ireland aims to reach 7.5% 

(152) EPA,  2024,  The  latest Irish  report  on  the implementation  of 

(154) Department 

of 

the 

Environment, 

Climate 

and 

Communications, 2023, Climate Action Plan 2024, Link. 

the Nitrates Directive (2020-2023), Link. 

(155) European Commission, Ireland – CAP strategic plan, Link. 

(153) EEA,  2024,  National  air  pollutant  emissions  data  viewer 

(156) European  Commission,  2023,  EU  Bioeconomy  Monitoring 

2005-2022, Link. 

System dashboards, Link. 

76 

 
 
 
Table A9.1:  Key indicators tracking progress on climate adaptation, resilience and environment 

(1) The data show the average for the timespan 2006-2023 based on EFFIS - European Forest Fire Information System. 
(2) Scale: 0 (no protection gap) – 4 (very high gap). EIOPA, 2024, Dashboard on insurance protection gap for natural catastrophes. 
(3) van Daalen, K. R. et al., 2024, The 2024 Europe report of the Lancet Countdown on health and climate change: unprecedented 
warming demands unprecedented action, The Lancet Public Health. 
(4) This indicator measures total water consumption as a percentage of the renewable freshwater resources available for a given 
territory and period. Values above 20% are generally considered to be a sign of water scarcity, while values equal or greater than 
40% indicate situations of severe water scarcity. 
(5) European Commission, 2024, 7th Implementation Report from the Commission to the Council and the European Parliament on 
the implementation of the Water Framework Directive (2000/60/EC) and the Floods Directive (2007/60/EC) (Third River Basin 
Management Plans and Second Flood Risk Management Plans). 
(6) For this indicator, the EU average includes figures for the UK under the previous configuration, EU-28. 
(7) European Commission, 2023, EU Bioeconomy Monitoring System dashboards. 
(8) Nitrates can persist in groundwater for a long time and accumulate at a high level through inputs from anthropogenic sources 
(mainly agriculture). The EU drinking water standard sets a limit of 50 mg NO3/L to avoid threats to human health. 
(9) Net removals are expressed in negative figures, net emissions in positive figures. Reported data are from the 2024 
greenhouse gas inventory submission. 2030 value of net greenhouse gas removals as in Regulation (EU) 2023/839 – Annex IIa. 
Source: Eurostat, EEA. 

77 

Climate adaptation and preparedness:20182019202020212022202320182021Drought impact on ecosystems1.440.030.050.357.2406.772.76[area impacted by drought as % of total]Forest-fire burnt area (1)3 306       3 306       3 306       3 306       3 306       3 306       [ha, annual average 2006-2023]Economic losses from extreme events-           51            210          -           -           260          24 142       62 981       [EUR million at constant 2022 prices]Insurance protection gap (2)----0.88         0.88         [composite score between 0 and 4]Heat-related mortality (3)5              5              5              5              5              [number of deaths per 100 000 inhabitants in 2013-2022]Sub-national climate adaptation action49            52            52            62            63            57            4144[% of population covered by the EU Covenant of Mayors for Climate & Energy]Water resilience:20182019202020212022202320182021Water Exploitation Index Plus, WEI+ (4)1.01.20.81.01.2-4.54.5[total water consumption as % of renewable freshwater resources]Water consumption563          729          553          537          624          -           [million m3]Ecological/quantitative status of water bodies (5)[% of water bodies failing to achieve good status]Surface water bodies-------59%Groundwater bodies-------93%Biodiversity and ecosystems:20182019202020212022202320182021Conservation status of habitats (6)15.3-----14.7-[% of habitats having a good conservation status]Common farmland bird index0.00.0----72.274.42000=100Protected areas---1414--26[% of protected land areas]Sustainable agriculture and land use:20182019202020212022202320182021Bioeconomy's added value (7)17 564     16 806     17 721     20 042     634 378     716 124     [EUR million]Landscape features----7              -[% of agricultural land covered with landscape features]Food waste--154150145-[kg per capita]Area under organic farming1.71.61.72.02.27.99-[% of total UAA]Nitrogen balance------[kg of nitrogen per ha of UAA]Nitrates in groundwater (8)12.814.413.913.3--[mgNO3/l]Net greenhouse gas removals from LULUCF (9)4 186       4 282       5 152       4 628       3 983       -           256 077-     240 984-     [Kt CO2-eq]IrelandEU-27IrelandEU-27IrelandEU-27IrelandEU-27 
 
  
 
FAIRNESS 
ANNEX 10: LABOUR MARKET 

Ireland’s  labour  market  is  robust  and  has 
shown  steady  progress  in  recent  years,  as 
evidenced  by 
labour  market 
improving 
outcomes.  With  its  national  2030  employment 
target (78.2%) already surpassed, the challenge is 
to tackle the persisting structural  problems. There 
is  a  need  to  (I)  make  the  labour  market  more 
inclusive  by  helping  underrepresented  groups 
access  quality  jobs,  in  particular  persons  with 
disabilities,  single  parents  and  the  Roma  and 
Traveller  communities;  (II)  help  women  take  up 
work,  especially  those  providing  unpaid  care;  (III) 
further reduce the share of people living in quasi-
jobless  households;  (IV)  reduce  labour  shortages; 
and  (V)  increase  collective  bargaining  coverage 
and quality jobs provision. 

intensity  households,  but 

housing  or  childcare  and  discrimination  at  work. 
Disadvantaged  groups  are  overrepresented  in  low 
work 
the  overall 
percentage  (7.4%)  is  now  below  the  EU  average 
(8%). Effective activation of these untapped labour 
market reserves could help ease labour shortages 
and increase competitiveness. 

Graph A10.1: Key labour market indicators 

(75.8%  and  80.3%),  and 

Key  employment 
indicators  underpin  the 
good overall performance of the Irish labour 
market.  The  employment  and 
labour  force 
participation  rates  (20-64)  are  at  historically  high 
levels,  reaching  79.8%  and  83%,  respectively,  in 
2024. Both rates are considerably higher than the 
EU  averages 
the 
employment rate is also above the country’s 2030 
target  of  78.2%.  The  unemployment  rate  stands 
stable  at  4.3%  vs  5.9%  EU  average.  Youth  and 
long-term unemployment stood at 10.6% and 1%, 
respectively,  well  below 
respective  EU 
averages  of  14.9%  and  1.9%.  The  labour  force  is 
projected to increase, thanks to a relatively young 
population,  demographic  growth  and  net  inward 
migration(157). 

the 

among 

in 
different 

labour  market 
Significant  differences 
participation 
cohorts 
indicate  room  to  activate  much-needed 
labour 
(see  section  below  on 
labour 
shortages).  While  the  situation  is  somewhat 
improving,  disadvantaged  groups 
(especially 
persons  with  disabilities,  single  parents  and  the 
Roma and Traveller communities) continue to face 
barriers  in  accessing  (quality)  jobs.  Comparing 
their  employment  indicators  to  disadvantaged 
cohorts in other Member States suggests that they 
encounter  bigger  obstacles  when  seeking  work 
(see  dedicated  sections  below).  These  structural 
differences  result  from  various  factors,  including 
access  to  (social)  services  such  as  education, 

Source: Eurostat, LFS [lfsi_emp_a, une_rt_a, edat_lfse_20, 
une_ltu_a] 

in  the 

labour  market 

The  low  level  of  inclusion  of  persons  with 
is  a 
disabilities 
limited 
longstanding  challenge,  showing 
improvements. At 38.2pps in 2024, the disability 
employment  gap  is  one  of  the  largest  in  the  EU, 
with  the  gap  widening  slightly  from  the  previous 
year (+0.1 pps) (158). Many factors hinder access to 
work for this group. Education is a key enabler and 
persons with disabilities have generally low levels 
of  educational  attainment.  In  Ireland,  4  out  of  10 
working-age  individuals  with  a  disability  have 
attained  only  primary  or 
lower  secondary 
education  –  twice  the  proportion  observed  in  the 
rest of the working-age population(159). Ireland has 

(158) Across  the  EU,  the  prevalence  of  disability  is  negatively 
correlated  with  the  size  of  the  employment  gap;  in  other 
words, countries that report lower levels of disability tend to 
report  higher  employment  gaps,  and  countries  with  higher 
prevalence rates tend to report smaller employment gaps. 

(157) Labour  Force  Assumptions  Population  and  Labour  Force 

Projections 2023-2057 - Central Statistics Office. 

(159) OECD  (2021), Disability,  Work  and  Inclusion  in  Ireland: 
Engaging and Supporting Employers, OECD Publishing, Paris. 

78 

72747678808284051015202530352009201020112012201320142015201620172018201920202021202220232024%%IEActivity rate 20-64 (rhs)Unemployment rate 15-74 (lhs)Long-term unemployment rate 15-74 (lhs)Youth unemployment rate 15-24 (lhs)NEET rate 15-29 (lhs) 
 
 
 
  
 
 
 
transport  options  are  barriers 

one  of  the  highest  rates  of  persons  with 
disabilities neither in employment nor in education 
or training (NEETs), at 35.1% in 2022(160). Lack of 
suitable  housing  close  to  jobs  and  insufficient 
accessible 
to 
employment.  Inadequate  access  to  reasonable 
accommodation(161) at work is also an issue. From 
2024,  the  new  ‘Work  and  Access’  programme 
provides  various  means  of  support  to  employees 
and  employers  alike  to  address  the  additional 
needs  of  applicants  or  workers  with  disabilities. 
Associations  representing persons  with disabilities 
repeatedly  flagged  the  fear  of  losing  access  to 
social  benefits,  medical  cards,  or  even  social 
housing  due  to  the  increase  in  their  income  after 
taking up work(162). Adjusting the eligibility income 
(e.g. 
thresholds  of  existing  welfare  schemes 
medical  cards  or  the  disability  allowance)  could 
help better include persons with disabilities in the 
labour market. Permanent in-work payments could 
help compensate for the additional  costs of living 
with a disability. 

Graph A10.2: Disability employment gap, pps 

but 

rising, 

continued 

significant 

The  participation  rate  of  female  workers 
gender 
keeps 
disparities  and  employment  barriers  persist, 
affecting  single  parents 
in  particular. 
Ireland’s  female  employment  rate  has  increased 
over  recent  years,  reaching  75.2%  in  2024,  well 
above  the  EU  average  (70.8%).  Still,  a  gender 
employment  gap  of  9.3 pps  remains.  The  female 
activity  rate  rose  to  78.3%,  also  higher  than  the 
EU average (75.3%), but lagging 9 pps behind that 
of  men.  Despite 
improvements, 
insufficient  access  to  affordable  and  quality 
childcare and the burden of unpaid care work are 
significant obstacles for women who would like to 
take  up  work.  Nearly  40%  of  all  inactive  women 
indicate  that  they  are  outside  of  the  labour  force 
due to caring responsibilities for children or adults 
with  disabilities.  Single  parents,  who  are 
predominantly  women,  face  particular  challenges 
when  trying  to  enter  the  workforce,  with  an 
employment  rate  of  69.3%,  well  below  the  EU 
average  (75.3%).  Often,  they  only  have  access  to 
precarious, 
education 
attainment is low compared to other cohorts, and 
returning  to  education  is  difficult  due  to  financial 
constraints and the lack of support(163). The recent 
increase in subsidies under the National Childcare 
scheme for single parents was a step  in the right 
direction towards relieving financial stress, but the 
insufficient  number  of  available  childcare  places 
can still prevent single parents from working. They 
more  often  work  part-time,  for  low  pay,  facing 
higher levels of in-work poverty. Key to closing the 
gender  employment  gap  and  helping  single 
parents  access  quality  jobs  will  be:  (I)  expanding 
support  that  effectively  allows  single  parents  to 
return to education; (II) further improving childcare 
provision and affordability; and (III)  offering more 
flexible work opportunities. 

low-paid 

Their 

jobs. 

Source: EU-SILC, [hlth_dlm200__custom_14 751 014] 

(160) European  comparative  data  on  persons  with  disabilities  - 

Publications Office of the EU. 

(161) Employment Equality Directive (2000/78/EC). 
(162) Edward  Leonard(2023):  Assessing  the  policies  to  assist 
disabled  people  to  access  employment  in  Ireland,  Geary 
Institute for Public Policy. 

The  Roma  and  Traveller 
communities 
continue  to  face  barriers  in  accessing  the 
labour market. The 2022 Census found that only 
a relatively small proportion of Roma and Traveller 
adults are employed (18% of Travellers and 61% 
of Roma). Like in the case of other disadvantaged 
groups,  this  is  strongly  related  to  low  education 
attainment,  but  discrimination  plays  a  major  role 
too.  A  new  report  found  that  Travellers  and  the 
Roma experience the highest levels of prejudice of 
any  ethnic  groups  in  Ireland,  and  this  has  greatly 

(163) One Family (2021): Submission on the National Access Plan 

2022-2026. 

79 

 
 
 
 
hindered them in finding work(164). Other direct and 
indirect  barriers  include  language  and  literacy 
difficulties,  and  access  to  transport  and  childcare 
services as well as their poor health conditions(165). 
Addressing  these  with  targeted  programmes, 
along  with  anti-discrimination  and  awareness-
raising  measures,  will  help  break  the  cycle  of 
disadvantage.  The  second  National  Traveller  and 
Roma  Inclusion  strategy,  published  in  2024,  aims 
to tackle these issues. Its success will hinge upon 
it  being  implemented  effectively  with  adequate 
resources and rigorous monitoring(166). 

Ireland  is  tackling  persistent  labour  and 
skills  shortages  including  by  focusing  on 
welcoming  migrant  workers.  The  overall  job 
vacancy rate stood at 1.2% in Q3-2024(167), which 
is  a  decrease  of  0.4 pps  year-on-year.  However, 
employers  continue  to  report  difficulties  in  hiring 
in  multiple  sectors.  The  highest  job  vacancy  rates 
are  observed  in  public  administration  (3.3%), 
professional,  scientific  and  technical  occupations 
(2.5%), administrative and support services (1.8%), 
and information and communication (1.6%). Other 
sectors  that  report  a  severe  lack  of  personnel 
include  education,  the  health  and  social  care 
sector,  and  construction.  Shortages 
the 
construction sector are particularly problematic, as 
these delay deliveries of new houses, which in turn 
undermines  (I)  access  to  social  and  affordable 
housing,  (II)  in-bound  labour  migration  of  the 
required  qualified  labour  and  consequently  (III) 
competitiveness. The Irish authorities are issuing a 
growing number of work permits for workers from 
outside the EU to increase labour supply, with the 
number  of  permits  rising  from  around  16 000 
permits  in  2019  to  over  36 000  in  2024(168).  In 
parallel, Ireland supports activities in reskilling and 
upskilling the workforce (see Annex 12). 

in 

Skills  mismatches  have  decreased  but 
remain  a  challenge.  The  macroeconomic  skills 

(164) Carron-Kee,  E.,  McGinnity,  F.,  and  Alamir,  A. 

(2024). 
Understanding  attitudes  to  Travellers  and  Roma  in  Ireland, 
Jointly-published Reports 9, Dublin: ESRI and DCEDIY. 

(165) Pavee  Point  Traveller  and  Roma  Centre  and  Applied  Social 
Studies, Maynooth University (2023) Roma in Ireland: Access 
to Fair and Decent Work. 

(166) Pavee  Point:  Lessons  learnt  from  implementation  of  the 
National Traveller and Roma Inclusion Strategy 2017-2021. 
(167) Earnings  and  Labour  Costs  Q2  2024  (Final)  Q3  2024 

(Preliminary Estimates) - Central Statistics Office  

(168) Dept  of  Enterprise,  Trade  and  Employment:  Employment 
permits statistical tables and company listings: Statistics. 

mismatch(169) 
in  2024  at 
remained  stable 
approximately 19.2%, in line with the EU average . 
There  is  a  large,  high-productivity  multinational 
sector  in  Ireland  requiring  qualified  workers,  and 
the  country  has  the  biggest  share  of  people  with 
tertiary  education  in  the  EU.  In  2023,  28%  of 
workers  with  a diploma  carried  out  tasks that did 
not require their level of education (vs EU 21.9%), 
therefore  leading  to  a  situation  that  entailed 
significant skills mismatches in the labour market. 
However,  people  with  a  degree  have  greater 
flexibility  in  changing  occupations,  which  will  be 
even  more important in  the  future.  Some  sectors, 
such  as  agriculture 
transportation 
(62.7%),  and  administrative  and  support  services 
(52.6%),  experience  particularly  high  over-
qualification rates. 

(87.8%), 

for 

density 

employer 

In 
line  with  European  trends,  collective 
bargaining  coverage  has  decreased  over  the 
last decades. The share of workers protected by 
collective agreements stood at 34% in 2024(170), a 
19 pps decline from 2003(171). Trade Union density 
(‘membership’)  fell  to  22%  in  2024,  compared  to 
representative 
70% 
bodies(172).  The  labour  share  –  an  indicator  which 
reflects  the  income  distribution  between  labour 
and capital – somewhat declined from 2020 when 
it  stood  at  around  60%  to  53%  in  2023(173).  Low 
membership of labour interest organisations limits 
their  capacity  to  negotiate  for  fair  wages  and 
decent  working  conditions.  In  Ireland,  employees 
do  not  have  a  right  to  collective  bargaining. 
Regardless of the number of workers a trade union 
represents, employers can refuse to negotiate. The 
EU  Directive  on  adequate  minimum  wages 
requires  Member  States  to  promote  collective 
bargaining where the coverage rate is below 80% 

(169) The  macroeconomic  skills  mismatch  indicator  measures  the 
dispersion  of  employment  rates  across  skill  groups  (proxied 
by qualification levels, with ISCED 0-2 low; 3-4 medium and 
5-7 high). 

(170) Joint  Committee  on  Enterprise,  Trade  and  Employment 

debate - Wednesday, 24 Jan 2024. 

(171) Geary,  J.  and  Belizon,  M.  (2022)  Employee  voice  in  Ireland, 
First findings from the UCD Working in Ireland Survey, 2021, 
College of Business, University College Dublin. 

(172) Irish Congress of Trade Unions (2024): Opening statement to 
Oireachtas  Joint  Committee  on  Enterprise,  Trade  and 
Employment  on  the  regulatory  and  legislative  changes 
required  for  the  transposition  of  the  Adequate  Minimum 
Wages Directive. 

(173) Using  modified  Gross  National  Income  instead  of  GDP  to 
account  for  the  distortive  effect  of  the  large  multinational 
sector  in  Ireland.  Source:  O’Shea,  D.  (2024).  Estimating 
Ireland’s labour share, QEC Research Note, Dublin: ESRI. 

80 

 
 
 
and  to  strengthen  the  capacity  of  social  partners. 
To this end, Ireland must prepare an action plan in 
2025. Introducing the right to collective bargaining 
and  prioritising  companies 
in 
collective  bargaining 
for  public  procurement 
contracts  could  effectively  increase  the  coverage 
rate.  These  developments  could  well  revive  the 
collective bargaining process at national level. 

that  engage 

Over  a  quarter  of  workers  had  poor  quality 
jobs  according  to  the  first  major  survey  on 
job  quality  in  Ireland.  A  2023  report  by 
University  College  Dublin  and  the  Nevin  Social 
Research  Institute  found  that  altogether  27%  of 
workers  had  what  was  defined  as  ‘poor  quality’ 
jobs(174).  15%  were  in  ‘precarious,  low-paid’  jobs, 
and  12%  were  in  ‘demanding,  precarious,  highly 
controlled’ jobs. At the other end, 21% of workers 
had ‘secure, high-quality jobs’. Precarious, low-paid 
positions  are  mostly  occupied  by  young  people 
(16-24),  predominantly  women,  who  often  hold 
part-time  or  temporary  positions.  In  addition, 
fewer women have high-quality jobs, indicating an 
occupational  gender  segregation.  Further  factors 
affecting  job  quality  include:  (I)  the  size  of  the 
firm,  with  smaller  companies  (0-49  employees) 
typically having more low-paid precarious jobs; (II) 
not  having  a  degree;  and  (III)  the  type  of 
occupation.  Another  important  finding  from  the 
2023  report  is  that  minimum-wage  workers  are 
20 pps  less  likely  to  be  members  of  a  trade 
union(175). Measures that could improve job quality 
include  introducing  a  living  wage  from  2029 
onwards.  Originally  the  introduction  of  this  living 
wage  was  planned  for  2026,  but  the  government 
deferred it (along with the decision on youth sub-
minimum  wage  rates),  to  help  businesses  reduce 
costs 
instead.  Further  measures  could  be 
improving  working  conditions  and  job  security  in 
typically  precarious  sectors  such  as  care,  leisure 
and sales. 

Over  time,  real  wage  growth  stays  behind 
productivity growth. Wage growth in the 2014-
2024  period  was  somewhat  below  what  could 
have been expected based on developments in the 
usual macroeconomic drivers(176). Real wages have 

(174) Geary,  J.,  &  Wilson,  L.  (2023).  Job  quality  in  Ireland:  First 
findings from the UCD Working in Ireland Survey, 2021 (NERI 
Report Series No 27). 

(175) Redmond, P., Ciprikis, K., and Staffa, E. (2023). Job quality of 
minimum wage workers in Ireland, ESRI Research Series 165. 
in 
the 

(176) Wage  benchmarks  are  predicted  by  developments 

trade  balance  and 

the 

inflation,  productivity, 
unemployment rate. 

been  recovering  after  marked  losses,  but  since 
2019 their growth remains well below productivity 
development. Nominal wages increased by 2.5% in 
2022, 6.8% in 2023 and 4.4% in 2024(177). In turn, 
real wages grew by 3.0% in 2024 after a sizeable 
decrease in 2022 (5.0%) and a partial recovery in 
2023  (2.3%).  The  statutory  minimum  wage  grew 
by 28.56% between January 2022 and July 2025, 
which  corresponds  to  a  real  increase  of  14.43%. 
On  1 January  2025,  it  increased  from  EUR 12.70 
per hour to EUR 13.50 and is to be set at 60% of 
the  median  wage  from  2029  onwards.  Originally 
the  introduction  of  this  living  wage  was  planned 
for  2026,  but  the  government  deferred  it  (along 
with  the  decision  on  youth  sub-minimum  wage 
rates),  to  help  businesses  reduce  costs  instead. 
Unit  labour  costs  grew  significantly  in  2023  (by 
17.0%), following a slight increase in 2022 (0.9%). 
They are also set to have increased by an average 
7.4%  in  2024.  However,  when  comparing  over  a 
longer  time  horizon  (2019-2024)  cumulative  real 
wage  growth  was  at  least  7  percentage  points 
behind productivity growth.   

in 

energy-intensive 

The  workforce  is  adapting  to  the  green  and 
digital  transitions,  with  a  growing  need  for 
skilled  workers  in  emerging  sectors.  In  2023, 
employment 
industries 
represented 0.9% of total employment, while jobs 
in  the  green  economy  have  expanded.  In  2021, 
employment  in  the  environmental  goods  and 
services sector reached 1.7% of total employment 
(EU: 2.7%). The greenhouse gas emission intensity 
of  Ireland’s  workforce  has  improved,  decreasing 
from  28.2  tonnes  per  worker  in  2015  to  22.1 
tonnes in 2023. This reflects the progress made in 
the  green  transition,  but  it  is  still  very  far  above 
the EU average (12.3 tonnes in 2023). In 2023, ICT 
specialists  accounted 
total 
employment,  above  the  EU  average  of  4.8%. 
Among workers aged 25-64, 85.5% have at least 
basic digital  skills (EU: 64.7%), reflecting Ireland’s 
emphasis  on 
readiness. 
Despite  these  achievements,  the  demand  for  ICT 
specialists  continues  to  exceed  supply,  requiring 
stronger 
targeted  upskilling 

fostering  workforce 

initiatives  and 

for  6.2% 

of 

(177) For  nominal  wage  growth,  compensation  per  employee  is 
considered. It includes: i) wages and salaries payable in cash 
or in kind; and ii)  social contributions payable by employers. 
For  real  gross  wages,  the  deflator  used  is  the  Harmonised 
Index  of  Consumer  Prices  (HICP).  Real  wages  using  this 
deflator  then  can  differ  from  real  wages  shown  in  AMECO 
(that  uses  private  consumption  as  deflator).  Data  for  2024 
and  2025  are  based  on  the  European  Commission  Autumn 
2024 economic forecast. 

81 

 
 
 
integration  of  digital  skills  development 
into 
education and training frameworks (see Annex 12). 

82 

 
 
 
ANNEX 11: SOCIAL POLICIES 

in 

Despite  significant  economic  and 
labour 
market  improvements  in  Ireland,  notable 
social challenges persist. Housing has been the 
biggest  concern 
Ireland  for  years,  with 
worsening  affordability  and  rising  homelessness. 
Poverty has been decreasing over the past decade, 
yet  vulnerable  groups  (persons  with  disabilities, 
single  parents,  children,  Roma  and  Travellers)  are 
still  facing  disproportionate  risks  of  poverty  and 
social  exclusion,  due  in  part  to  limited  access  to 
social  services,  which  are  often  provided  by  the 
private  or  the  voluntary  sector.  Addressing  these 
challenges  will  contribute  to  inclusive  growth  and 
competitiveness. 

Low-income  cohorts  face  disproportionate 
challenges  in  accessing  housing,  childcare 
and healthcare. Due to high inflation, the cost of 
living has emerged as the second most important 
issues for Irish voters, after housing (178). In recent 
years,  the  Irish  budget  has  had  unprecedented 
surpluses  due  to  large  revenues  from  corporate 
taxation,  which  were  used  to  tackle  some  of  the 
issues  (e.g.  energy  poverty  and  child  poverty) 
lasting 
through  one-off  measures.  However, 
solutions  will  require  structural  reforms  based  on 
stable sources of financing. 

Ireland’s housing market continues to exhibit 
strong price growth. House prices grew by 3.1% 
in  2023,  following  rises  of  8.3%  and  12.3%  in 
2021  and  2022,  respectively.  Prices  increased 
further in 2024 (+9.3% year-on-year in Q4-2024). 
However,  there  are  signs  of  improvement  on  the 
supply  side,  with  building 
commencements 
in  2024.  New  housing 
increasing  by  84% 
completions,  although  they  decreased  slightly  in 
2024, are expected to rise further, suggesting that 
housing  supply  may  help  moderate  price  growth. 
Nevertheless,  high  population  growth  is  likely  to 
sustain strong demand for housing in the future. 

Overall  housing  affordable  continues  to 
deteriorate  further,  as  population  growth 
outpaces  new  construction.  With  a  strong 
recovery  after  an  economic  bust,  house  prices 
doubled  in  the  decade  up  to  2024,  and  outpaced 
household  income  growth  by  24%  over  the  same 
period.  As  a  consequence  Ireland  saw  one  of  the 
strongest  deteriorations  of  its  price-to-income 
ratio over the same period. This is partially due to 

(178) According to post-2024 general elections exit poll by Ipsos. 

an 
insufficient  housing  supply  to  the  15% 
population  growth  over  the  same  period.  After 
anaemic  construction  during  the  mid-2010s,  the 
construction  of  new  dwellings  has  picked  up 
substantially  and  by  2024  has  reached  a  per-
capita  level  more  than  double  the  EU  average, 
though still far below 2000s levels. Yet population 
growth  continues  to  exceed  dwelling  growth, 
leaving  Ireland  as  one  of  the  few  Member  States 
with  a  persistent  decline  in  its  stock  of  dwellings 
per  capita.  House  price 
levels  compared  to 
incomes  remain  one  of  the  highest  in  the  EU, 
posing  potential  structural  risks  to  the  domestic 
economy. While the  rental  market is  rather  small, 
the  ratio  of  new  rent  prices  to  incomes increased 
significantly over the last decade. 

Housing  affordability  continues  to  be  the 
most  pressing  social  challenge  in  Ireland. 
Over  the  past  decade,  the  average  (nominal)  rent 
more  than  doubled  to  EUR 1 644  in  Q2-2024.  
Population  growth  and  housing  supply  shortages, 
including  in  social  housing  and  the  private  rental 
sector,  are  key  drivers  behind  the  increase  in 
housing costs. Low affordability also affects young 
people  and  migrants,  who  typically  do  not  own 
their  home,  and  lower-income  people  and  urban 
cohorts  that  rely  more  on  renting.  Meanwhile  the 
residential  vacancy  rate  (the  share  of  unused 
apartments)  stood  at  7.7%  in  2022  (down  from 
9.1% in 2016). 

The demand for social housing is on the rise. 
In  2023,  there  were  58 824  households  on  local 
authority waiting lists for social housing. This is an 
increase  of  almost  1 000  households  from  the 
previous  year,  and  the  first  increase  since  2016. 
More than half of those on waiting lists are single 
adults,  while  almost  a  quarter  are  single-parent 
families. A further 62 642 households were reliant 
on  rent  supplement  schemes  to  pay  for  private 
rented  housing  in  Q3  2024.  These  schemes  have 
supported many  households in  avoiding  or  exiting 
homelessness.  However,  in  the  context  of  limited 
supply  of  private  rented  housing  and  rising  rents, 
claimants  are  experiencing  significant  difficulty  in 
finding dwellings to rent, which is a major cause of 
that 
homelessness.  Housing  NGOs 
tenants  were  afraid  to  move  from  emergency 
accommodation to private rented housing with the 
help of the housing assistance payment due to the 
low  security  of  tenure  in  the  first  six  months. 
During this period renters can be evicted without a 
reason.  Following  that  they  can  stay  for  an 
indefinite  duration  (in  tenancies  created  after  10 

reported 

83 

 
 
 
 
 
June  2022),  unless 
landlord  wants 
terminate the contract for an allowed reason.  

the 

to 

targeted  support  measures  could  help  Ireland  to 
achieve its 2030 national poverty reduction target. 

Increasing  the  supply  of  available  dwellings 
is vital, yet further measures are needed. The 
that 
Parliamentary  Budget  Office  estimates 
altogether  there  are  236 000  people  in  need  of 
social  housing (179),  of  which  92 000  are  children. 
This  is  significantly  higher  than  official  figures.  In 
2024, the government revised its ‘Housing for All’ 
targets,  setting  the  goal  of  constructing  50 500 
new  homes  annually  (up  from  33 000).  Through 
the  European  Social  Fund  Plus  (ESF+)  the  EU 
supports  the  delivery  of  new  social  services  and 
necessities  for  the  homeless.  Further  efforts  to 
address  the  causes  of  homelessness  and  low 
affordability  could  be  considered,  such  as:  (i) 
increasing the share of social housing stock in the 
overall housing stock(180), thus moderating housing 
price  volatility;  (ii)  conducting  further  analysis  to 
see  if  tenant  rights  could  be  strengthened  to 
prevent  homelessness  due  to  evictions.; 
(iii)  
strengthening  the  powers  of  local  authorities  to 
acquire derelict homes for social housing; and (iv) 
monitor  the  number  of  vacant  homes  and  adjust 
the vacant homes tax in line with the results. 

The  number  of  people  living  at  risk  of 
poverty  or  social  exclusion  (AROPE)  recently 
decreased.  The  AROPE  rate  in  2024  stood  at 
16.7%,  below  the  EU  average  of  21%.  The  three 
components of this indicator reflect key aspects of 
social inclusion: (i) to measure income poverty, the 
at-risk-of-poverty  (AROP)  rate  (12.3%  vs  16.2% 
for the EU); (ii) to measure access to work, the low 
work  intensity  household  rate  (7.4%  vs  7.9%  for 
the  EU);  and (iii)  to  measure  low  living  standards, 
the  severe  material  and  social  deprivation  rate 
(4.5%  vs  6.4%  for  the  EU).  There  were  some 
improvements  for  all  components,  mostly  thanks 
to the strong job market performance and one-off 
support  measures 
Income 
poverty slightly increased in 2024 (+0.3pps). High 
inflation 
price 
contributed  to  financial  pressure  on  lower  income 
households  (though  inflation  already  decreased). 
Benchmarking  welfare  payments 
to  existing 
standards  (e.g.  inflation,  real  wages)  or  better 

combined  with  high 

in  recent  budgets. 

levels 

that 

concern 

expressed 

the  AROPE 

People  with  disabilities  are  particularly 
affected  by  poverty  and  social  exclusion. 
rate  of  persons  with 
Although 
disabilities has improved, Ireland is still below the 
EU  average,  with  a  rate  of  30.1%  in  2024.  Some 
the 
stakeholders 
improvement  was 
largely  thanks  to  one-off 
support  measures  provided  in  recent  years  and 
that  the  situation  would  worsen  once  those  are 
discontinued (181).  The  number  of  persons  with 
disabilities affected by severe social  and material 
deprivation  decreased  in  2024.  Still  almost  four 
times  as many  persons  with  disabilities  could  not 
afford  basic  goods  (8.5%),  compared  to  the 
general  population  (2.3%).  The  main  form  of 
financial  support  –  the  disability  allowance  –  has 
not  increased  in  line  with  inflation.  The  EUR 12 
increase in the maximum personal  rate of weekly 
disability  payments  came  into  effect  in  January 
2025. However, the Disability Federation of Ireland 
estimates  that  a  further  increase  of  EUR 20  per 
week  is  the  absolute  minimum  required  for  the 
disability 
pace  with 
to 
inflation (182).  Currently  the  Irish  social  protection 
system  cannot  adequately  compensate  for  the 
additional  costs  of  disability,  which  in  2024 
amounted 
EUR 10 000-15 000 
annually (183). 

allowance 

around 

keep 

to 

This 

group 

challenges. 

Single-parent  families  face  serious  social 
inclusion 
is 
disproportionately  represented  among  homeless 
families  and  the  numbers  are  rising.  Their  AROPE 
rate  is  more  than  twice  that  of  the  general 
population  (47.3%  vs  16.7%).  Material  and  social 
deprivation  is  also  very  high  compared  to  the 
general  population  (39.1%  vs  12.1%).  On  the 
upside,  AROPE  improved  in  recent  years.  A  2024 
study  by  the  Economic  and  Social  Research 
Institute  found  that  lone  parenthood  significantly 
increases  economic  vulnerability,  characterised  by 
low  income,  material  deprivation  and  financial 
stress.   (184).  Measures  to  improve  access  to 
childcare,  employment  and  education  for  single 

(179) Social Housing – Ongoing Need 2023 (PBO). 

(180)OECD (2024), OECD Affordable Housing Database - indicator 
PH4.2.  Social  rental  housing  stock  (standing  around  12%).  The 
Report of the Housing Commission (2024) recommends doubling 
the social housing sector. 

(181) Social Justice Ireland – Budget 2025 Analysis & Critique. 
(182) Disability Federation of Ireland Pre-Budget Submission 2025. 

(183)2021 figures adjusted with inflation. The cost of disability in 

Ireland report, Department of Social Protection. 

(184)Russell,  H.,  and  Maître,  B.  (2024).  Lone  parent  transitions, 
employment transitions and poverty outcomes, ESRI Research 
Series 193, Dublin. 

84 

 
 
 
parents  will  be  essential  in  helping  them  escape 
poverty and social exclusion. 

The  Roma  and  Traveller  minorities  are  at  a 
disadvantage  in  accessing  social  services 
and  exiting  poverty.  In  Dublin,  around  5%  of 
Traveller  households  were  homeless  in  2023, 
compared  to  0.7%  of  the  total  population (185). 
Funding  is  earmarked  specifically  for  Traveller 
accommodation  and  has  been  fully  spent  in  the 
last  5-year  period  2020-2024.  The  latest  survey 
on  Roma  and  Traveller  poverty  levels  from  2020 
found that 10% of this cohort went to bed hungry 
at least once in the previous month, and 40% were 
struggling to make ends meet. Discrimination is a 
common  experience  for  this  target  group  when 
trying  to  access  different  services,  such  as 
housing,  healthcare,  public  administration  or 
employment (186). 

The risk of poverty or social exclusion among 
children decreased. The AROPE rate for children 
fell  by  3.7  pps,  reaching  20.6%  in  2024  (vs  EU 
24.2%).  Risks  are  more  pronounced  for  children 
from  single-parent  households,  children  with 
disabilities  and  children  from  Traveller  and  Roma 
communities.  To  address  this,  the  2025  budget 
includes  several 
to  child  support. 
increases 
However,  more  targeted  measures,  such  as  a 
means-tested child benefit at a higher rate, could 
lead  to  better  social  protection.  To  mitigate  the 
impact  of  poverty  on  children,  Ireland  is  also 
implementing the European Child Guarantee (ECG) 
according  to  its  2022  action  plan.  The  2024 
implementation  report  shows  that  progress  has 
been  made  in  some  areas,  e.g.  record  high  public 
investments  in  early  education  and  childcare  and 
free  hot  meals  for  primary  school  pupils.  From 
2025,  the  ‘Hot  School  Meals’  scheme  will  be 
extended  to  all  Irish  primary  schools,  covering  in 
total 3 200 schools and 550 000 children (187). The 
implementation  of  the  ECG  is  supported  by  EU 
cohesion policy funds. 

Children’s  access  to  social  services  remains 
patchy,  particularly 
for  housing,  early 
childhood  education  and  care  (ECEC)  and 
the  UN 
healthcare. 

Regarding 

housing, 

for 

the 

national 

childcare 

accommodation’ 

Committee  on  the  Rights  of  the  Child  in  2023 
called  on  Ireland  to  ‘phase  out  the  use  of 
emergency 
homeless 
children (188).  Yet,  family  and  child  homelessness 
(those  accessing  emergency  accommodation)  has 
further  increased.  There  is  currently  a  lack  of 
policy  focusing  on  these  groups  as  the  problem 
emerged  mostly  after  the  housing  strategy’s 
publication  in  2021,  indicating  the  need  for  a 
review. Concerning ECEC, increasing subsidies and 
expanding 
scheme 
significantly reduced costs for low-income families 
and  single  parents.  Yet,  barriers  remain,  as 
demonstrated by the low childcare attendance rate 
for kids under 3 (22.1% vs 37.5% for the EU). The 
sponsorship scheme is supposed to cover childcare 
costs  for  vulnerable  children,  but  in  some  cases, 
the  grant  is  too  low,  preventing  the  child  from 
enrolment.  The  same  can  happen  because  the 
child  benefit  is  included  in  the  national  childcare 
scheme  means  test,  meaning  parents  might  lose 
access  to  a  higher  national  childcare  scheme 
subsidy.  Middle-income  families  still  face  high 
costs  (189).  Although  capacity  has  increased,  the 
lack  of  available  places  is  still  a  problem.  The 
trends in Sector Profile data over the last 3 years 
show a gradual increase in enrolments, a reduction 
in vacancies, and a large expansion in waiting lists. 
This points clearly to an increase in demand which 
is not being met by existing capacity in the sector. 

Ireland  still  lacks  universal  healthcare  for 
children, in contrast to other Member States. 
Children up to age 8 have free GP visits, but their 
families must pass a means test to have access to 
a  medical  card  (free  overall  medical  care).  The 
income threshold for the means test has not been 
adjusted since 2005. This leaves many low-income 
families (whose income is not low enough to pass 
the  means  test)  struggling  with  healthcare  costs. 
There is no timeline yet on when free GP visits will 
also  cover  children  over  8.  Non-financial  barriers 
also  exist,  like  the  availability  of  healthcare 
services  due  to  long  waiting  lists  and  staffing 
shortages,  or  the  social  stigma  of  taking  up 
means-tested benefits (e.g. the medical card) (190). 
The  completion  of  the  new  national  children’s 
hospital has been delayed by several years. There 
the 
is 

coordination 

between 

limited 

(185)Draft  Dublin  City  Council’s  Traveller  Accommodation 

Programme 2025-2029, p8. 

(186) National Traveller and Roma Inclusion Strategy II, p31. 

(187) School Meals programme debate in the Irish Parliament on 1 

October 2024 

(188) Children’s Rights Alliance: Child poverty monitor 2024 p74. 
(189) Ibid. p42-43. 
(190)Laurie  Reilly  et  al.  (2024):  European  Child  Guarantee: 
Analysing  the extent  to  which  children  in  Ireland have  access 
to key services. 

85 

 
 
 
healthcare/social services sector and the education 
sector  which  creates  difficulties  for  families,  and 
an additional burden on schools, particularly those 
with  a  high  proportion  of  disadvantaged  students 
(schools under the  DEIS,  or  ‘Delivering  Equality  of 
Opportunity  In  Schools’,  programme) (191).  Children 
and  young  people  with  complex  mental  and 
physical  healthcare  needs  continue 
to  face 
challenges  in  accessing  appropriate  counselling 
and  quality  support  due  to  fragmentation  in  the 
delivery  of  services  and  lack  of  coordination 
between  relevant  departments  and  agencies (192) 
(see Annex 14 for more information on health). 

Graph A11.1: At-risk-of-poverty or social exclusion 
rate, age groups 

70

60

50

40

30

20

10

0

5
1
0
2

6
1
0
2

7
1
0
2

1
2
0
2

8
1
0
2

0
2
0
2

9
1
0
2
Total population
Persons with disabilities

2
2
0
2

3
2
0
2

4
2
0
2

Research  indicates  that  the  fuel  allowance  had  a 
significant impact on reducing energy poverty prior 
to  the  energy  inflation (193).  The  fuel  allowance 
rate  has  not  been  adjusted  since  2020,  but  the 
income threshold in the eligibility means test was 
increased.  In  recent  budgets,  the  main  tool  to 
address  the  rise  in  households’  energy  costs  has 
been  one-off  supports:  all  households  received 
annual  energy  credits  to  alleviate  the  financial 
stress.  A  more  targeted  lump  sum  payment,  the 
‘Additional  Needs  Payment’,  was  introduced  in 
2022.  It  focuses  on  low-income  cohorts  who  are 
struggling to pay essential costs, and a means test 
must be passed to become eligible. The European 
Regional 
a 
programme  called  ‘Warmer  Homes’  to  support 
owner-occupiers  of  residential  homes  who  are  in, 
or at risk of, energy poverty, through deep-retrofit 
grants. Households in the lowest income group and 
those  with  older  owners  are  more  likely  to  cite 
administrative  complexity  as  a  reason  for  not 
accessing retrofit grants (194). Simplification and/or 
personal  guidance  throughout  the  process  could 
help more people access the grants. Increasing the 
instead  of  utilising  one-off 
fuel  allowance 
measures,  and  more  targeted  benefits,  could 
improve  cost  effectiveness  and  help  to  stop  the 
increase in energy poverty. 

Development 

finances 

Fund 

Single parents
Children

(1) AROPE: At-risk-of-poverty or social exclusion rate (% of 
total population). 
Source: Eurostat, EU-SILC [ilc_peps01n] 

Energy  poverty  has  increased  in  Ireland. 
While  remaining  below  the  EU  average,  the 
percentage  of  households  which  were  unable  to 
keep 
their  home  adequately  warm  doubled 
between 2021 and 2022 and grew further to 7.2% 
in  2023  (EU  average  10.6%).  The  percentage  of 
individuals  in  arrears  on  utility  bills  was  7.6%  in 
2023, showing a slight increase compared to 2021 
(+0.3  pps).  As  regards  electricity,  Ireland  has  the 
3rd  highest  household  consumer prices  in  the  EU. 

(191) OECD  (2024),  OECD  Review  of  Resourcing  Schools  to 
Address  Educational  Disadvantage  in  Ireland,  Reviews  of 
National Policies for Education, OECD Publishing, Paris. 

(192) OECD  (2024),  Together  for  Children  and  Young  People  in 
Ireland:  Towards  a  New  Governance  Framework,  OECD 
Public Governance Reviews, OECD Publishing, Paris. 

(193) Arya Pillai, Miguel Tovar Reaños & John Curtis. ESRI Working 
Paper  No 729,  June  2022:  Fuel  poverty  in  Ireland:  an 
analysis of trends and profiles. 

(194) Reaños,  M.T.,  J.  Curtis,  A.  Pillai,  and  D.  Meier,  ‘Fuel  Poverty 
and  Financial  Literacy:  Evidence  from  Irish  Home  Owners’, 
ESRI Working Paper 751, ESRI. 

86 

 
   
 
 
ANNEX 12: EDUCATION AND SKILLS 

Educational  outcomes  in  Ireland  are  above 
the  EU  average,  but  some  vulnerable  groups 
lag  behind  despite  the  support  measures  in 
place.  Children  and  students  from  disadvantaged 
socio-economic  backgrounds,  including  Travellers 
and  Roma,  and  students  with  disabilities  have 
lower  educational  outcomes.  Skills  levels  remain 
closely  linked  to  poverty  and  social  exclusion. 
Ireland  has  launched  new  policy  measures  and 
reviewed  its  systems  to better  support  vulnerable 
children  and  students  to  enable  them  to  reach 
their full potential. The results are still to be seen. 
However,  establishing  new  special  schools  for 
students  with  disabilities  and  persistent  teacher 
shortages  create  risks  for  the  inclusiveness  and 
future educational outcomes (195). Further boosting 
technology, 
basic  and  green  skills,  science, 
engineering 
(STEM) 
and 
competencies,  particularly  among  disadvantaged 
students, and adult learning participation is key to 
its 
enhancing 
capacity to innovate. 

Ireland’s  competitiveness  and 

mathematics 

Continued  support  for  basic  skills  and  STEM 
strengthen 
to 
crucial 
is 
competences 
Ireland’s  competitiveness  and 
innovation 
capacity.  While  Ireland  is  among  the  EU  top 
in  basic  skills  (reading, 
performing  countries 
mathematics  and  science),  the  underachievement 
rate in mathematics increased to 19% since 2018 
by 3.3 percentage points (pps) (196). The proportion 
of  top  performers  in  mathematics  has  been 
decreasing  since  2012,  remaining  below  the  EU 
average  (7.2%  vs  7.9%),  and  the  gender  gap  in 
science and mathematics in favour of boys is wide. 
is 
To  address 
implementing 
Policy 
Statement and Implementation Plan to 2026'. 

these 
the 

challenges, 

Education 

Ireland 

'STEM 

The  STEM  budget  for  schools  was  increased 
in 2024 (197), and measures were launched to 
increase  the  pool  of  mathematics  and 
physics teachers. Nevertheless, schools continue 
reporting  staff  shortages,  and  insufficient  science 

(195) According to Article 24 of the UN Convention on the Rights of 
Persons  with  Disabilities  (UNCRPD),  States  parties  must 
ensure an inclusive education system at all levels and avoid 
segregation.  Ireland  ratified  the  UNCRPD  in  2018  and  its 
optional protocol on 8 October 2024. 

(196) OECD (2023), PISA 2022 Results (Volume I).  

(197) Department of Education (2024) - April 2025 Press release. 

87 

subject  infrastructure  (198)  (199).  To  support  basic 
skills, in 2024, the government launched ‘Ireland’s 
Literacy,  Numeracy  and  Digital  Literacy  Strategy 
2024-2033:  Every  Learner  from  Birth  to  Young 
Adulthood’  to  deliver  systematic  improvement  in 
literacy,  numeracy,  and  digital  literacy  from  early 
childhood  education  and  care  (ECEC)  to  post-
primary level. 

Graph A12.1: Trend in underachievement in 
mathematics by students’ socio-economic 
background, OECD Programme for International 
Student Assessment (PISA) 2012 - 2022 (%) 

Source: PISA 2022, OECD (2023) 

students  at 

To  unlock  the  potential  of  disadvantaged 
groups,  Ireland  aims  to  improve  its  support 
for 
risk  of  educational 
disadvantage.  The  rate  of  early  leavers  from 
education and training remains low, at 4% in 2023 
(200).  It  remains,  however,  high  among  vulnerable 
groups, including persons with disabilities (10.7%), 
(202).  The 
Roma  and  Travellers 
proportion  of  disadvantaged  secondary  school 

(70%) 

(201) 

(198) Casey, J. (2024). ‘Science teachers sound alarm over Leaving 

Cert exam changes’. Irish Examiner. 

(199) OECD  (2023), PISA  2022  Results  (Volume  I):  The  State  of 
Learning  and  Equity  in  Education,  PISA,  OECD  Publishing, 
Paris, https://doi.org/10.1787/53f23881-en. 

(200) edat_lfse_14 
(201) European  Commission 

(2021),  Directorate-General 

for 
Employment,  Social  Affairs  and  Inclusion.  Grammenos,  S., 
European  comparative  data  on  Europe  2020  and  persons 
with  disabilities:  labour  market,  education,  poverty  and 
health 
trends. 
and 
analysis 
https://data.europa.eu/doi/10.2767/745317 

(202) European  Agency  for  Fundamental  Rights  (2020),  Roma 
Countries. 

Travellers 
https://fra.europa.eu/sites/default/files/fra_uploads/fra2020-
roma-travellers-six-countries_en.pdf 

Six 

in 

051015202530354045502012201520182022%Disadvantaged IEDisadvantaged EUAdvantaged IEAdvantaged EU2030 EU target 
 
 
   
 
  
 
 
 
Despite 

Graph A10.1). 

students underachieving in mathematics continues 
to  increase,  though  is  less  than  the  EU  average 
(see 
continued 
improvements  over  the  past  decade,  significant 
differences 
in  educational  outcomes  persist 
between  the  schools  supported  by  the  'Delivering 
Equality  of  Opportunity 
(DEIS) 
programme and  those  not  covered,  for  students 
from 
lower  socio-economic  backgrounds,  and 
latest  survey  of 
Travellers  and  Roma.  The 
mathematical  skills  at  primary  level  also  shows 
significantly 
lower  outcomes  for  urban  DEIS 
schools (Band 1) (203). 

In  Schools' 

for 

also 

(204). 

review 

support 

additional 

The  OECD 

To  reduce  educational  inequalities,  Ireland 
had  the  OECD  review 
its  allocation  of 
resources  to  schools  to  address  educational 
disadvantages 
review 
recommends  extending  some  support  to  every 
child and young person defined as disadvantaged, 
regardless  of  the  school  attended  as  well  as 
targeting 
students 
experiencing  the  highest  levels  of  educational 
disadvantage. 
includes 
The 
resourcing, 
recommendations  on  governance, 
school-level  actions  and 
capacity  building, 
monitoring. 
first 
Ireland  also  published 
'Traveller  and  Roma  Education  Strategy  to  2030' 
and  the  new  support  scheme  Equal  Start  to  help 
disadvantaged  families  participate  in  ECEC.  This 
would  enable  more  parents  to  take  up  work  and 
contribute  to  the  country’s  competitiveness  (see 
Annexes 10  and  11).  Effective  implementation  of 
the 
the  new  policy 
measures  is  important  to  ensure  more  effective 
support  for  disadvantaged  children  and  students, 
providing  them  with  better  educational  and 
employment prospects. 

recommendations  and 

its 

88.6% (205). Due to increasing numbers of students 
with additional needs (206), five new special schools 
for children with complex needs will be established 
in 2025, and more special school building projects 
are  in  progress.  However,  segregated  schools  are 
not  in  line  with  the  requirements  of  the  UN 
convention  on 
rights  of  persons  with 
disabilities. 

the 

for 

vulnerable 

in  education  has  negative 
Segregation 
implications 
students 
themselves  and  also  jeopardises  the  overall 
performance  of  education (207).  Furthermore, 
equity and inclusion in education are essential for 
shared  prosperity  and  sustainable  development 
(208).  As 
review 
recommended,  educational  services  should  be 
better  coordinated  with  the  health  and  therapy 
service  provision  to  better  support  schools  and 
families  in  meeting  students’  special  needs.  This 
would  facilitate  addressing  children’s  special 
needs in mainstream schools. 

the  above-mentioned  OECD 

and 

supply 

challenges 

Teacher shortages persist, affecting schools. 
school 
Teacher 
infrastructure deficits limit the capacity of schools 
to  offer  curricular  and  extra-curricular  activities 
(209).  There  are  difficulties  in  both  recruiting  and 
retaining  teachers,  and  primary  schools  are 
increasingly  employing  staff  without  teaching 
qualifications  (210).  Rising  costs  of  living  and 
responsibilities  have 
increased  workload  and 
negatively  affected  the  teaching  profession  (211). 
Education  and  training  are  among  the  sectors 
most  affected  by  skills  shortages  in  Ireland  (212). 
Given  that  the  quality  of  teaching  is  the  most 
influential  factor  in  education,  it  is  necessary  to 
step  up  the  efforts  to  ensure  sufficient,  qualified 
workforce.  

risks 

special 

Ireland 

schools 

continues 

implementing 
While 
inclusive  measures,  expanding  the  network 
of 
increasing 
segregation  within  the  education  system. 
Between  the  2018/19  and  2022/23  school  years, 
the  number  of  students 
in  special  schools 
increased  by  9.1%,  the  number  of  students  in 
special  classes  in  primary  schools  increased  by 
62.5%  and  the  number  of  students  in  special 
classes  in  post-primary  schools  increased  by 

(203) G.  McHugh,  S.  Denner,  A.Clerkin, G.  Piccio  & V.Pitsia. (2024). 
into  mathematics  and  science 

Insights 
TIMSS  2023. 
achievement in Ireland.  

Ireland’s  vocational  education  and  training 
(VET)  sector  is  small  but  performs  well.  In 
2022, approximately 88 000 students participated 

(205) ibid. 
(206) Smyth and Russell, 2024. https://doi.org/10.26504/rs191 
(207) Council  of  Europe,  2017.  Fighting  school  segregation  in 

Europe through inclusive education 

(208) World Bank Group, 2016. SABER Equity and inclusion 
(209) Caroll, et al., 2024. ‘Embracing diversity in all its forms’: The 

voluntary secondary sector in Irish education 

(210) ASTI  Survey  -  School  leaders’  experience  of  teacher  supply 
problems;  INTO:  Another  Year  of  Crisis  in  Recruitment  and 
Retention Revealed by Primary School Survey. 

(211) Harford  and  Fleming,  2023.  Teacher  supply  in  Ireland: 

(204) OECD (2024): OECD Review of Resourcing Schools to Address 

anatomy of a crisis 

Educational Disadvantage in Ireland 

(212) OECD Skills For Jobs 2022.  

88 

 
 
 
learners,  considerably 

in  VET  programmes  (213)  at  upper-secondary  and 
post-secondary  non-tertiary  level.  At  the  upper-
secondary  level,  VET  participation  stood  at  21.1% 
of 
lower  than  the  EU 
average  of  49%.  However,  the  rising  employment 
rate  of  recent  VET  graduates  suggests  improved 
labour  market  relevance  of  vocational  education 
and  training  over  the  past  decade.  In  2023,  the 
rate reached 81.8%, just above the EU average of 
81%. Despite these positive trends, most students 
still pursue higher education, reflecting the strong 
presence of large multinational companies and the 
structure  of  Ireland’s  economy,  which  demands  a 
highly qualified workforce. 

Work-based  learning  in  VET  remains  limited. 
In 2023, the share of work-based learning in VET 
programmes  increased  to  34.8%,  but  still  falls 
considerably short of the EU average of 59.5%. To 
tackle  this  gap,  the  government  is  increasing 
financial  support  for  apprenticeships,  particularly 
in  sectors  facing  critical  skills  shortages.  The 
‘Action Plan for Apprenticeships 2021-2025’ set a 
target  of  10 000  new  apprentices  registering 
annually by 2025. According to its 2024 progress 
report,  the  plan’s  implementation  is  on  track  to 
achieve  the  target.  The  National  Apprenticeship 
Office,  set  up  in  2022,  has  become  the  central 
resource  for  employers,  apprentices  and  training 
providers.  Multiple  EU  instruments  help  improve 
skills  provision.  The  European  Social  Fund  Plus 
(ESF+) will take over supporting further education 
and  training  courses  currently  funded  by  the 
Recovery  and  Resilience  Facility, 
to  provide 
jobseekers  with  sought-after  skills  in  the  labour 
including  for  the  green  and  digital 
market, 
transitions. 

Further Education and Training (FET) policy in 
Ireland combines a labour market focus with 
a  social  inclusion  dimension.  The  ‘Future  FET: 
Transforming  Learning  2020-2024’  strategy  (its 
successor  is  still  under  development)  prioritises 
increasing  participation  among  disadvantaged 
financial  burden  of 
learners.  However, 
the 
returning 
for 
to  education 
marginalised groups. 

remains  high 

Ireland's  2025  budget  included  measures  to 
expand  skills  development  opportunities  and 
reduce  education  costs,  particularly  in  full-
time  higher  education.  However,  it  did  not 

(213) Known as Further Education and Training or FET in Ireland. 

specifically  address  the  needs  of  disadvantaged 
adult  learners  or  related  financial  barriers.  For 
example,  supplementary  allowances  for  food, 
travel  and  accommodation  for  FET  and  craft 
apprentices have remained unchanged since 2002. 
Adjusting  these  allowances  to  reflect  the  more 
than  50%  increase  in  the  consumer  price  index 
since  2002  would 
estimated 
EUR 9.34 million  annually (214).  Nevertheless,  no 
increases  have  been  announced.  Ensuring 
adequate  financial  support  could  help  more 
disadvantaged people take up vocational courses. 

require  an 

for 

has 

launched 

allocated 

in  2022, 
an 

Student  enrolment  numbers 
in  higher 
education  continue  to  rise.  At  65.2%  in  2024, 
the rate among those aged 25-34 was the highest 
in  the  EU (215).  Student  enrolment  between  2016-
2022  increased  by  13% (216).  Under  the  'Funding 
the  Future'  process 
the 
government 
additional 
EUR 105.7 million  to  the  sector  until  2024.  When 
adjusted 
inflation,  however,  educational 
spending  has  not  yet  returned  to  the  levels  of 
2008(217).  In  the  2025  budget,  the  Funding  the 
Future was increased by a further EUR 150 million 
in core funding, totalling EUR 650 million by 2030. 
Furthermore,  PhD  stipends  will  be  increased  by 
EUR 3 000 per year, and one-off contributions will 
be  made  to  student  fees.  At  90.3%  in  2023,  the 
employment  rate  of  tertiary  graduates  remains 
high 
(EU  average:  87.7%).  Higher  education 
attainment  is  associated  with  more  advanced 
knowledge  and  skills,  needed  also  for  the  digital 
and  green  transitions,  and  better  social  outcomes 
(218). 

fields 

Ireland  is  progressing  its  policy  on  the 
applied  education  sector,  enlarging  its  STEM 
skills pool. The proportion of students enrolled in 
Standard 
STEM 
Classification  of  Education  (ISCED)  level  5-8  was 
27.8% in 2022 (EU 27.1%), and at VET ISCED level 
3-4  was  37.5%  (EU  36.2%).  The  proportion  at 
tertiary level is likely to increase, driven by strong 
demand  for  places  in  Technological  Universities 

International 

at 

(214) DFHERIS  Funding  the  Future  –  An  Annual  Options  Paper  on 

Reducing the Cost of Education (September 2024). 

(215) Eurostat: edat_lfse_03. 
(216) Eurostat: educ_uoe_enrt02. 
(217) EUA,  2022.  Public  Funding  Observatory  2021/2022.  Part  1: 

Sector perspectives on Funding. 

(218) OECD, 

2024. 
https://www.oecd.org/content/dam/oecd/en/publications/repor
ts/2024/03/cultivating-the-next-generation-of-green-and-
digital-innovators_b23f349e/bb6e432e-en.pdf 

89 

 
 
 
(TUs),  which  now  enrol  over  100 000  students.  In 
further 
the  TUs  were  allocated  a 
2024, 
EUR 84 million  (also  from  the  European  Regional 
Development  Fund)  to  strengthen  their  central 
research functions. These policy efforts are key to 
address  the  continued  demand  for  advanced 
technical skills, including ICT. 

Further  boosting  participation 
in  adult 
Ireland’s 
is  key  to  enhancing 
learning 
competitiveness  and  meeting  its  2030  skills 
target.  Between  2016  and  2022,  the  share  of 
adults aged 25-64 engaging in adult learning rose 
slightly by  2.3 pps to  48.3%.  This  exceeds  the  EU 
average but falls well short of the national target 
of  64.2%  by  2030.  The  likelihood  of  participation 
in  adult  learning  tends  to  grow  with  age  and 
educational  level,  with  women  taking  part  more 
often  than  men.  Addressing  barriers  to  lifelong 
learners,  such  as  the  cost  of  returning  to 
education,  access  to  childcare  and  availability  of 
reliable  and  affordable  public  transport  in  rural 
areas,  could  help  strengthen  workforce  skills  and 
productivity.  The  ESF+  continues  to  support  adult 
basic  skills  development,  particularly  through  the 
‘Adult  Literacy  for  Life  Strategy’,  which  provides 
free courses in literacy, numeracy and digital skills. 

The  government  has  announced  additional 
funding for upskilling initiatives. In the budget 
for 2025, the government earmarked a significant 
portion  of  the  EUR 1.485 billion  surplus  of  the 
National  Training  Fund  (NTF)  for  core  and  capital 
funding  in  the  higher  education  sector  over  the 
next  six  years.  However,  the  primary  focus  of  the 
budget  and  the  NTF  surplus  is  on  the  school-
leaving cohort transitioning from higher education 
to apprenticeships. Paid training leave and tailored 
initiatives to enhance engagement among socially 
disadvantaged  adult  learners  could  help  improve 
further  enhancing  workforce 
the 
adaptability 
long-term 
and 
competitiveness. 

situation, 

Ireland’s 

Graph A12.2: Participation in education and 
training by educational attainment level 

(1) ‘Formal and non-formal education and training (excluding 
guided on-the-job training)’ 
Source: Eurostat - adult education survey (AES 2022) 

outlines 

following  broad 

New  initiatives  aim  to  equip  more  people 
with  green  skills,  supporting  the  country’s 
transition  to a  low-carbon  economy.  In  2024, 
shortages  were  reported  in  several  occupations 
requiring  green  skills,  including  civil  engineers, 
construction  managers  and  plumbers  and  pipe 
(219).  To  address  these  gaps, 
fitters 
Ireland 
published  its  first  national  further  education  and 
training  strategy  for  the  green  transition  (‘Green 
Skills  2030’), 
stakeholder 
consultations from relevant economic sectors. The 
strategy 
strategic 
recommendations,  including  the  need  to  (i)  raise 
awareness  of  FET  programmes  and  green  skills 
provision; 
career 
opportunities; and (iii) mainstream green skills and 
transversal competences into all FET programmes. 
The  Skillnet  Offshore  Wind  Academy  was 
established  in  2024,  which  will  train  workers  to 
exploit untapped renewable energy resources (220). 
The ‘Action Plan for Apprenticeships (2021-2025)’ 
introduced  new  apprenticeships  in  the  green  and 
sustainability-related  fields.  These  initiatives  will 
support Ireland’s competitiveness and ensure that 
the workforce is adequately prepared for the green 
transition.  In  2022,  52%  of  Irish  respondents 

emerging 

promote 

various 

(ii) 

(219) European  Labour  Authority  2025  European  Employment 
Services  (EURES)  Report  on  labour  shortages  and  surpluses 
2024,  based  on  data  from  EURES  National  Coordination 
Offices.  Skills  and  knowledge  requirements  align  with  the 
European 
and 
Occupations  (ESCO)  taxonomy  on  skills  for  the  green 
transition,  with  examples  analysed  using  the  ESCO  green 
intensity index. 

Competences,  Qualifications 

Skills, 

(220) gov.ie - Minister O'Donovan launches Ireland’s Offshore Wind 
Skills Action Plan to meet ambitious 2030 and 2050 targets. 

90 

010203040506070All ISCED 2011 levelsLess than primary,primary and lowersecondary education(levels 0-2)Upper secondary andpost-secondary non-tertiary education(levels 3 and 4)Tertiary education(levels 5-8)EUIreland 
   
 
expressed  confidence  in  having  these  abilities, 
slightly less than the EU average of 54% (221). 

Ireland’s 

demonstrated 

large  multinational 

Ireland  ranks  among  the  top  performers  in 
the  EU  for  digital  skills  in  the  general 
ICT 
population. 
sector  demands  a  digitally  trained  workforce.  At 
8.2%,  the  share  of  ICT  graduates  is  among  the 
highest in the EU (4.5%) (222). In 2023, nearly 73% 
of  the  population  possessed  at  least  basic  digital 
skills,  far  above  the  EU  average  of  55.6%,  and 
43.8% 
digital 
proficiency.  The proportion  of  young  people (aged 
16-24)  with  at  least  basic  digital  skills  is  in  line 
with  the  EU  average  (69.6%)  (223).  A digital  divide 
persists,  particularly  among  individuals  aged  55 
and older and those living in rural areas. Ireland’s 
recovery and resilience plan has supported efforts 
to  bridge  this  gap  through  digital  skills  strategies 
and  providing  ICT  equipment  to  FET  and  higher 
disadvantaged 
education 
backgrounds. 

above-basic 

students 

from 

(221) Special Eurobarometer 527: Fairness perceptions of the 

green transition. 

(222) DESI 2024. 
(223) DESI 2024 (2023 data). 

91 

 
 
ANNEX 13: SOCIAL SCOREBOARD 

Table A13.1:Social Scoreboard for Ireland 

(1) Update of 5 May 2025. Members States are categorised based on the Social Scoreboard according to a methodology agreed 
with the EMCO and SPC Committees. Please consult the Annex of the Joint Employment Report 2025 for details on the 
methodology (https://employment-social-affairs.ec.europa.eu/joint-employment-report-2025-0). 
Source: Eurostat 

92 

48,32,872,97,59,33,6879,84,31,0111,816,720,652,938,24,724,42,9Critical situationTo watchWeak but improvingGood but to monitorOn averageSocial Scoreboard for IrelandEqual opportunities and access to the labour marketAdult participation in learning (during the last 12 months, excl. guided on the job training, % of the population aged 25-64, 2022)Early leavers from education and training(% of  the population aged 18-24, 2024)Share of individuals who have basic or above basic overall digital skills(% of the population aged 16-74, 2023)Young people not in employment, education or training(% of the population aged 15-29, 2024)Gender employment gap(percentage points, population aged 20-64, 2024)Income quintile ratio (S80/S20, 2024)Dynamic labour markets and fair working conditionsEmployment rate(% of the population aged 20-64, 2024)Unemployment rate(% of the active population aged 15-74, 2024)Long term unemployment(% of the active population aged 15-74, 2024)Gross disposable household income (GDHI) per capita growth(index, 2008=100, 2023)Social protection and inclusionAt risk of poverty or social exclusion (AROPE) rate (% of the total population, 2024)At risk of poverty or social exclusion (AROPE) rate for children(% of the population aged 0-17, 2024)Impact of social transfers (other than pensions) on poverty reduction(% reduction of AROP, 2024)Disability employment gap (percentage points, population aged 20-64, 2024)Housing cost overburden (% of the total population, 2024)Children aged less than 3 years in formal childcare (% of the under 3-years-old population, 2024)Self-reported unmet need for medical care (% of the population aged 16+, 2024)Better than averageBest performers 
 
 
 
  
 
 
ANNEX 14: HEALTH AND HEALTH SYSTEMS 

Ireland  faces  challenges  with  the  financial 
sustainability  and  cost-effectiveness  of  its 
health  system.  Insufficient  focus  on  outpatient 
care,  long  waiting  lists  and  shortages  of  doctors 
need to be addressed if the country is to improve 
the  health  of  its  population  and  ensure  social 
fairness, while boosting the competitiveness of its 
economy. 

Graph A14.2: Treatable mortality 

Ireland 

the  EU  average. 

Life expectancy at birth in Ireland rebounded 
to its pre-COVID-19 level in 2023, remaining 
above 
fares 
in  avoiding  deaths  from 
comparatively  well 
treatable  causes.  Diseases  of  the  circulatory 
system 
the 
leading  cause  of  death  in  2022,  followed  by 
In  2022,  the  cancer  mortality  (age-
cancer. 
standardised)  rate  was  above  the  EU  average, 
while  the  mortality  rate  from  cardiovascular 
diseases was below the EU average. 

(‘cardiovascular  diseases’)  were 

Graph A14.1: Life expectancy at birth, years 

Source: Eurostat (demo_mlexpec) 

The distribution of health spending in Ireland 
is  suboptimal,  with  an  insufficient  focus  on 
outpatient  care.  In  2022,  health  spending  per 
inhabitant  in  Ireland  was  above  the  EU  average, 
steadily  increasing  since  2019.  The  largest  share 
of  total  health  spending  (one  third)  went  towards 
hospital care, followed by outpatient care (around 
a quarter). The number of hospital beds in Ireland 
has  been  increasing  over  the  decade  2013-2022. 
However,  it  remains  well  below  the  EU  average, 
with  one  of  the  highest  occupancy  rates  (above 
80%,  but  lower  than  in  2019)  (224).  Capital 
investment in the health sector increased in recent 
years.  However,  current  availability  of  key 
diagnostic  (medical  imaging)  technology  remains 
low.  

(224) OECD/European  Commission  (2024),  Health  at  a  Glance: 
Europe 2024 - State of Health in the EU Cycle, p.201. Acute 
care bed capacity has been increased though in 2024. 

Age-standardised death rate (mortality that could be 
avoided through optimal quality healthcare) 
Source: Eurostat (hlth_cd_apr) 

is 

slowly 

in  2024 

decentralising 

Ireland 
the 
governance of its health system, with a view 
to improving cost-effectiveness and reducing 
risks  to  its  long-term  fiscal  sustainability. 
Given  the  sustained  increase  in  health  spending 
and  with  the  share  of  older  people  projected  to 
increase  significantly  by  2050,  Ireland  received  a 
country-specific 
to 
recommendation 
address  the  expected  increase  in  age-related 
expenditure  by  making  the  healthcare  system 
more  cost-effective.  In  2024,  the  Irish  health 
system  once  again  overspent  its  budget  by  a 
significant margin, requiring a mid-year agreement 
to  provide  a  one-off  top-up.  However,  this 
agreement came with a commitment to introduce 
specific  measures 
cost-
to 
effectiveness  of  the  Irish  health  system  (see 
Annex 1), and a taskforce was set up to that end. 
Several  measures  to  improve  the  quality  and 
accessibility  of  the  health  system  included  in 
Ireland’s  recovery  and  resilience  plan  (RRP)  also 
improve cost-effectiveness. 

improve 

the 

Ireland  aims  to  make  progress  on  the 
Sláintecare  reform  programme,  which  has 
faced  delays,  notably  by  improving  planning 
and integration of healthcare services at the 
regional  level.  One  programme  measure  is  to 
operationalise  the  Community  Health  Networks 
(CHNs)  which  will  support  the  planning  and 
delivery  of  primary  healthcare  services 
in  a 
structured way. A total of 96 CHNs have been set 
up  across 
Ireland,  each  delivering  primary 
healthcare  services  for  a  population  of  around 
50 000. Furthermore, in 2024 six  “health regions” 
became  operational,  with  one  Regional  Executive 
Officer  appointed  in  each  of  them.  Ireland’s 
restructuring efforts are expected to provide more 
responsive  healthcare  services 
localised  and 

93 

82.882.582.382.682.981.380.480.180.681.420192020202120222023IrelandEU75.971.069.769.270.491.389.291.793.389.720182019202020212022per 100 000 populationIrelandEU 
 
        
 
        
 
 
Table A14.1:Key health indicators 

*The EU average is weighted for all indicators except for doctors and nurses per 1 000 population, for which the EU simple 
average is used based on 2022 (or latest 2021) data except for Luxembourg (2017). Doctors’ density data refer to practising 
doctors in all countries except Greece, Portugal (licensed to practise) and Slovakia (professionally active). Density of nurses: data 
refer to practising nurses (EU recognised qualification) in most countries except France and Slovakia (professionally active) and 
Greece (hospital only). **‘Available hospital beds’ covers somatic care, not psychiatric care. ***The EU median is used for patents. 
Source: Eurostat database; European Patent Office; ****European Centre for Disease Prevention and Control (ECDC) for 2023. 

tailored  to  the  specific  needs  of 
individual 
communities,  as  well  as  better  monitoring  and 
performance  management.  Moreover,  the  2024 
national  adult  palliative  care  policy  focuses  on 
improving  access  to  palliative  care  and  providing 
person-centred,  equitable  care,  and  strengthened 
service integration and governance. 

is  room  for 

Ireland  performs  well  on  disease  prevention 
but  there 
improvement  on 
containing  antibiotics  consumption.  In  2022, 
the share of spending on prevention in Ireland was 
slightly 
lower  than  the  EU  average.  Among 
measures  to  strengthen  prevention  and  improve 
launched  the 
access  to  healthcare,  Ministers 
women’s health action plan for 2024-2025 (Phase 
2), which includes an expanded free contraception 
scheme  and  increases  capacity  for  setting  up 
menopause  and  gynaecology  clinics,  as  well  as 
programmes  for  midlife  and  older  women,  to 
improve  bone  density  and  cardiovascular  health. 
The Irish RRP also includes measures to encourage 
more  patients  to  participate  in  a  chronic  disease 
management  programme.  Ireland  participates  in 
several  joint  actions  under  EU4Health  targeted  at 
cancer  issues,  such  as  EUnetCCC  JA  (European 
Comprehensive Cancer Centre Network) and JANE-
2 (225) and EUCanScreen (226). It also participates in 
JACARDI (227) which supports European countries in 
their 
and  manage 
cardiovascular diseases and diabetes. In 2022, the 
rate  of  preventable  mortality  in  Ireland  was  well 

prevent 

efforts 

to 

below the EU average, with lung cancer being the 
leading  cause  of  preventable  death.  However,  the 
consumption  of  antibiotics  has  been  decreasing 
very  slowly  in  Ireland.  It  increased  by  30% 
between 2021  and  2022,  in line  with  an  EU-wide 
trend  following  the  onset  of  COVID-19,  and 
remained  above the  EU  average  in  2023. Overall, 
antibiotics  use  has  decreased  by  only  2%  since 
2019,  while  the  national  target  is  to  decrease 
consumption  by  27%  by  2030  (228).  This  raises 
significant  public  health  concerns  about  an 
increase in antimicrobial resistance. 

the  EU  average 

Limited  public  coverage  and  long  waiting 
lists  limit  the  availability  of  and  equitable 
access  to  healthcare.  The  share  of  health 
expenditure covered by public funds in Ireland was 
slightly  below 
in  2022. 
Furthermore,  there  is  no  universal  coverage  of 
primary care in Ireland - the only EU country where 
this  is  the  case.  Between  2023  and  spring  2024, 
Ireland  expanded  entitlement 
to  free  public 
healthcare  services  in  several  steps,  providing 
visits to general practitioners (GPs) without charge 
for nearly 2 250 000 people. In addition, in spring 
2023  user  charges  for  all  inpatients  in  public 
hospitals  were  abolished.  In  2024,  the  proportion 
of  the  Irish  population  reporting  unmet  needs  for 
medical  care  was  above  the  EU  average  (see 
Annexes 11 and 15). Such unmet needs are mainly 
due  to  waiting  times,  and  to  a  lesser  extent  to 
financial  reasons.  Yet,  lower  income  groups  are 
the  most.  Household  out-of-pocket 
affected 

(225) JANE-2: Shaping the EU Networks of Expertise on cancer! 
(226) Implementation  of 
screening  programmes 
cancer 

- 

EUCanScreen | Knowledge for policy. 

(227) JACARDI:  Joint  Action  on  CARdiovascular  diseases  and 

DIabetes. 

(228) National  target  set  by  the  Council  Recommendation  on 
stepping up EU actions to combat antimicrobial resistance in 
a One Health approach, 2023/C 220/01.  

94 

20192020202120222023EU average* (latest year) Cancer mortality per 100 000 population261.5255.5248.0248.2n.a.234.7 (2022)Mortality due to circulatory diseases per 100 000 population 258.4 245.3 248.2 266.5n.a.336.4 (2022)Current expenditure on health, purchasing power standards, per capita3 4913 6743 8924 136n.a.3 684.6 (2022)Public share of health expenditure, % of current health expenditure 74.3 78.0 77.4 77.4 77.481.3 (2022)Spending on prevention, % of current health expenditure 2.73.25.94.74.75.5 (2022)Available hospital beds per 100 000 population** 255 257 257 258n.a.444 (2022)Doctors per 1 000 population*3.33.54.03.3n.a.4.2 (2022)*Nurses per 1 000 population*n.a.n.a. 12.7 13.1n.a.7.6 (2022)*Mortality at working age (20-64 years), % of total mortality16.616.316.415.515.614.3 (2023)Number of patents (pharma / biotech / medical technology)13315312212817129 (2023)***Total consumption of antibacterials for systemic use,                    daily defined dose per 1 000 inhabitants****22.818.617.823.122.420.0 (2023) 
 
 
 
        
 
is  for  the 

health  services  (excluding  phone)  instead  of  in-
person  consultations  significantly  increased  in 
Ireland between 2020 and 2024, bringing it in line 
with the EU average. However, the share of people 
who  access  their  personal  health  records  online 
remained  low  -  around  half  the  EU  average, 
despite  a  high  general  level  of  digital  literacy  in 
Ireland  (72.9%  had  at  least  basic  digital  skills  in 
2023 vs an EU average of 55.6% (see Annex 12)). 
All  funds  earmarked  for  the  health  sector  under 
the  Irish  RRP  aim  to  strengthen  the  country’s 
digital  health  infrastructure  (233).  The  biggest 
implementation  of  an 
investment 
integrated  financial  management  system  and  the 
deployment  of  e-pharmacy  systems  across 
hospitals  in  Ireland.  Once  deployed,  this  system 
will  allow  Irish  authorities  to  monitor  the  use  and 
costs  of  medications,  and  to  develop  a  more 
interoperable 
system  where 
prescription  data  are  linked  to  electronic  patient 
records.  In  addition,  the  Ministry  for  Health  has 
launched a digital health strategy for 2024-2030. 
A  key  measure  was  the  Health  Information  Bill, 
published in summer 2024, providing a legal basis 
for  digital  health  records  and  legal  provisions  on 
the sharing of patient data for care and treatment. 
At  the  end  of  2024,  the  first  Health  Service 
Executive’s  patient  app  was  rolled  out  to  1 500 
patients  on  a  trial  basis.  Finally,  Ireland  receives 
several direct grants under EU4Health, related for 
instance  to  MyHealth@EU  (234)  or  patients’  access 
to their health data (235).  

care  delivery 

payments  as  a  share  of  total  health  costs  are 
lower in Ireland than the EU average, but voluntary 
health  insurance  payments  account  for  nearly 
11% of total health spending, which is well above 
the  EU  average.  Private  health 
is 
commonly taken out by people in Ireland to bypass 
the waiting lists in the public system. This situation 
risks  exacerbating  health  inequalities,  as  poorer 
patients cannot afford private health services.  

insurance 

Long waiting lists are linked to a healthcare 
system that is still too hospital-centred, but 
also  to  doctor  shortages.  In  2022,  Ireland 
continued to have a comparatively high density of 
nurses,  well  above  the  EU  average.  However,  the 
density  of  graduated  nurses  was  very  low.  In 
2023, around 52% of nurses and 43% of doctors 
in Ireland were foreign-trained, as a result of both 
inflows  of  foreign-trained  and  outflows  of  Irish-
trained  staff,  attracted  by  better  pay  and  better 
working  conditions  abroad  (229).  Doctor  density 
significantly 
last  decade, 
increased  over  the 
despite  a  one-fifth  decrease  between  2021  and 
2022. 

Ireland’s  health  system  contributes 
to 
innovation and industrial development in the 
EU medical sector, although there is room for 
improvement.  Inward  foreign  direct  investment 
plays  a  prominent  role  in  the  health  sector  (see 
Annex  3).  Ireland  is  among  the  EU  countries  with 
the lowest public spending on health research and 
development, but there is a fair amount of private 
investment in pharmaceutical R&D, as reported by 
the  members  of  the  European  Federation  of 
Pharmaceutical  Industries  and  Associations  (230). 
Ireland  also  has  among  the  highest  levels  in  the 
EU  when  considering  R&D  budgets  allocated  to 
countries  based  on  corporation  headquarters 
location.  This  is  reflected  in  a  high  number  of 
European  patents  granted  in  the  combined  areas 
of  pharmaceuticals,  biotechnologies  and  medical 
devices:  171 
in  medical 
in  2023,  mostly 
technology  (231).  However,  clinical  trial  activity  in 
Ireland is limited (232). 

The  uptake  of  e-health  and  the  overall 
digitalisation  of  the  health  system  have 
improved.  The  share  of  individuals  using  online 

(229) Health at a Glance: Europe 2024, p.45. 
(230) See EFPIA. 
(231) European Patent Office, Data to download | epo.org. 
(232) EMA 

(2024),  Monitoring 

the  European  clinical 

environment, p. 9. 

(233) The  2024  amended  recovery  and  resilience  plan  envisages 
an  additional  EUR  48  million  under  RePowerEU,  for 
retrofitting actions in HSE estates. 

(234) Data  sharing  through  eDelivery  in  the  HealthData@EU: 

trials 

MyHealth@EU. 

(235) Enabling patient access to their health data. 

95 

 
 
 
HORIZONTAL 
ANNEX 15: SUSTAINABLE DEVELOPMENT GOALS 

social 

fairness 

This  Annex  assesses  Ireland’s  progress  on 
the  Sustainable  Development  Goals  (SDGs) 
along  the  dimensions  of  competitiveness, 
and 
sustainability, 
macroeconomic stability. 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 
inequalities  and  tackle  climate 
poverty,  fight 
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 
the EU. 

is 

of 

people 

improving  on  some  SDGs  on 
Ireland 
competitiveness  (SDGs 4  and  8)  but  still 
needs  to  catch  up  with  the  EU  average  for 
others  (SDG 9  -  Industry,  innovation  and 
infrastructure). The percentage of adults with at 
least basic digital skills (SDG 4; 72.9% in 2023) is 
above  the  EU  average  (55.6%),  although  this 
leaves  almost  one  third  of  the  population  aged 
lacking  basic  digital  skills.  On  SDG 8 
16-74 
the 
(Decent  work  and  economic  growth), 
percentage 
in 
neither 
young 
employment,  education  nor  training  aged  15-29 
dropped from 11.4% in 2018 to 7.5% in 2024 and 
is below the EU average (11% in 2024). 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;  1.58%  of  GDP  in 
2023  compared  to  the  EU  average  of  2.24%). 
However, when looking at modified gross national 
income  (GNI*),  R&D  expenditure  (2.77%  of  GNI*) 
(236) was above the EU average. The Irish recovery 
includes  significant 
and  resilience  plan  (RRP) 
reforms  and  investments  to  boost  innovation  and 
digital  skills.  In  particular,  the  National  Grand 
Challenges  programme  incentivises  innovation  in 
green, climate and digital solutions. 

(236) 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. 

96 

While  Ireland  is  improving  on  most  SDGs 
related  to  sustainability,  it  is  moving  away 
from SDG 6 (Clean water and sanitation) and 
SDG 11 (Sustainable cities and communities). 
Ireland  is  improving  slightly  on  SDG 15  (Life 
on  land)  but  needs  to  catch  up  with  the  EU 
average  in  some  areas,  in  particular  on 
SDG 13  (Climate  action).  Ireland  has  made 
progress on climate mitigation (SDG 13), including 
on  net  greenhouse  gas  emissions  (from  13.4 
tonnes per capita in 2018 to 11.1 tonnes in 2023). 
Nevertheless,  it  remains  above  the  EU  average 
(6.8  tonnes  per  capita  in  2023).  Net  greenhouse 
gas emissions from land use, land use change and 
forestry decreased slightly  (from 57.1 tonnes CO2 
eq.  per  km3  in  2018  to  55.7  tonnes  in  2023)  but 
remains significantly higher than the EU average (-
47 tonnes per km3 in 2023). This is in spite of the 
climate 
for 
ambitious 
challenges  (See  Section  3).  On  waste  generation 
and  management  (SDG 12),  the  circular  material 
use rate increased marginally, from 1.9% in 2018 
to  2.3%  in  2023,  but  remains  significantly  lower 
than  the  EU  average  (11.8%  in  2023).  Ireland’s 
material  footprint  decreased  (from  16.6  tonnes 
per  inhabitant  in  2018  to  11.8  tonnes  in  2023), 
below the EU average (14.2 tonnes in 2023).  

addressing 

targets 

cities 

SDG 11 

On 
and 
(Sustainable 
communities),  Ireland  is  moving  away  from 
the  target  due  to  a  deterioration  in  the 
quality of life in both cities and communities. 
The  severe  housing  deprivation  rate  increased 
slightly  from  1.2%  of  the  population  in  2015  to 
1.3%  in  2020,  although this  is lower  than  the  EU 
average of 4 % in 2023. There is a slightly higher 
percentage  of  the  population  reporting  crime, 
violence  or  vandalism  in  their  area  (10.8%  in 
2020;  compared  to  the  EU  average  of  10%  in 
2023). Ireland also has a lower percentage of the 
population  connected 
least  secondary 
wastewater  treatment  (SDG6;  64.3%  in  2021 
compared  to  an  EU  average  of  80.9%  in  2022), 
although  this  has  increased  from  2016  (61.2%). 
Ireland  is  improving  marginally  on  the  target  for 
SDG 15  (Life  on  land),  as  the  drought  impact  on 
ecosystems  has  improved  (from  1.4%  in  2018  to 
0%  in  2023).  The  percentage  of  total  land  area 
covered by forests improved slightly from 11% in 
2017  to  11.6%  in  2022.  However,  this  is  still 
significantly below the EU average at 38.7%. 

to  at 

 
 
 
 
 
 
 
Graph A15.1: Progress towards the SDGs in Ireland 

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). 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 
five 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 28 April 2025. Data refer mainly to the period 2018-2023 or 2019-2024. Data on SDGs may 
vary across the report and its annexes due to different cut-off dates. 

While Ireland performs well on SDGs related 
to  social  fairness  (SDGs   4,  7,  8,  10),  it  is 
moving  away  from  SDG  1  (No  poverty)  and 
SDG  3  (Good  health  and  well-being)  and 
needs  to  catch  up  with  the  EU  average  in 
some areas, such as SDG 5 (Gender equality). 
Ireland performs better than the EU average and is 
making  progress  on  several  indicators  related  to 
inequality,  inclusive  growth,  and  education,  but 
performance on poverty and health and well-being 
have  worsened.  Ireland  performs  well  on  the 
severe  material  and  social  deprivation 
rate 
(SDG 1), which fell from 6.1% of the population in 
2018 to 6% in 2023 compared to the EU average 
of 6.8% in 2023. However, the in-work at-risk-of-
poverty rate increased slightly from 4.8% in 2018 
to  5.5% in  2023  (below  the  EU  average  of  8.3%) 
and  the  housing  cost  overburden  rate  increased 
from 3.4% in 2018 to 4.7% in 2023 (still below EU 
average  of  8.8%  in  2023).  The  country  has 
fairness-related 
improved  on  several  social 
indicators  such  as  early  leavers  from  education 
and  training  (SDG 4;  2.8%  in  2024,  against  5.1% 
in  2019).  There  was  a  deterioration 
in  the 
percentage of the population unable to keep their 

homes  adequately  warm  (SDG 7;  7.2%  in  2023, 
against  4.4%  in  2018,  as  compared  to  the  EU 
average  of  10.6%  in  2023)  and  the  self-reported 
unmet  needs  for  medical  care  (SDG 3;  2.7%  in 
2023,  against  2%  in  2018),  while  the  long-term 
unemployment rate improved (SDG 8; 1% in 2024, 
against  1.6%  in  2019).  In  addition,  the  income 
share  of  the  bottom  40%  of  the  population 
(SDG 10)  increased  to  23.4%  of  income  in  2023 
from 22.3% in 2018.  

Ireland  performs  well  on  SDGs  related  to 
macroeconomic  stability  (SDGs 8  and  16). 
Ireland has enjoyed significant growth in real GDP 
per  capita  (SDG 8;  from  EUR 71  800  in  2019  to 
EUR 85  700  in  2023).  As  for  access  to  justice 
(SDG 16), 
improved  on  general 
government  total  expenditure  on  law  courts,  up 
from  EUR 138.4  in  2018  to  EUR 154.5  per  capita 
in 2023 (EU average EUR 121.7 in 2023).  

Ireland  has 

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

97 

 
 
ANNEX 16: CSR PROGRESS AND EU FUNDS IMPLEMENTATION 

recommendations 

Ireland faces structural challenges in a wide 
range  of  policy  areas,  as  identified  in  the 
country-specific 
(CSRs) 
addressed  to  the  country  as  part  of  the 
European  Semester.    They  refer,  among  other 
things,  to  the  pensions  system  and  active  ageing, 
environmental  policy  and  resource  management, 
renewable  energy,  energy 
infrastructure  and 
networks,  energy  efficiency,  transport,  business 
environment, housing and education. 

The Commission has assessed the 2019-2024 
CSRs  considering  the  policy  action  taken  by 
Ireland  to  date  and  the  commitments  in  its 
recovery  and  resilience  plan  (RRP).  At  this 
stage,  Ireland  has  made  at  least  ‘some  progress’ 
on 91% of the CSRs (237), and ‘limited progress’ on 
9% (Table A16.2). 

to 

by 

competitiveness, 

EU funding instruments provide considerable 
resources 
supporting 
Ireland 
investments  and  structural  reforms  to 
increase 
environmental 
sustainability  and  social  fairness,  while 
helping  to  address  challenges  identified  in 
the  CSRs.  In  addition  to  the  EUR 1.2  billion 
funding  from  the  Recovery  and  Resilience  Facility 
(RRF) in 2021-2026, EU cohesion policy funds (238) 
are  providing  EUR 1  billion  to  Ireland  (amounting 
to  EUR 2.1  billion  with  national  co-financing)  for 
2021-2027 (239) to boost regional competitiveness 
and  growth.  Support  from  these  instruments 
combined  represents  around  0.4  %  of  2024  GDP 
(240).  The  contribution  of  these  instruments  to 
different  policy  objectives  is  outlined  in  Graphs 
A16.1  and  A16.2.  This  substantial  support  from 
the  EU  comes  on  top  of  financing  provided  to 
Ireland  under 
the  2014-2020  multiannual 
financial  framework,  which  financed  projects  until 
2023 and has had significant benefits for the Irish 
economy  and  society.  Project  selection  under  the 

(237) 13% of the 2019-2024 CSRs have been fully implemented, 
20%  substantially  implemented  and  58%  have  reached 
some progress. 

(238) In  2021-2027,  cohesion  policy  funds  include  the  European 
Regional  Development  Fund,  the  European  Social  Fund  Plus 
and  the  Just  Transition  Fund.  The  information  on  cohesion 
policy 
is  based  on  adopted 
in  this  annex 
programmes with the cut-off date of 5 May 2025. 

included 

(239) European  territorial  cooperation 

(ETC)  programmes  are 

excluded from the figure. 

(240) RRF  funding 

loans,  where 
includes  both  grants  and 
applicable. GDP figures are based on Eurostat data for 2024. 

98 

2021-2027  cohesion  policy  programmes 
is 
advanced and implementation of selected projects 
has gained momentum. 

The  Irish  RRP  contains  19  investments  and 
11  reforms  to  stimulate  sustainable  growth 
and investments targeted towards the green 
and digital transition. A year before the end of 
the RRF timespan, increased efforts are needed to 
ensure  completion  of  all  RRP  measures  by 
31 August 2026, with 28% of the funds disbursed. 
At  present,  Ireland  has  fulfilled  34%  of  the 
milestones and targets in its RRP (241). 

the 

Ireland  also  receives  funding  from  several 
other  EU  instruments,  including  those  listed  in 
common 
table  A16.1.  Most  notably, 
agricultural  policy  (CAP)  provides  Ireland  with  an 
EU  contribution  of  EUR  7,5  billion  under  the  CAP 
strategic  plan  for  2023-2027  (242).  Furthermore, 
operations  amounting  to  EUR  351.2  million  (243) 
have  been  signed  under  the  InvestEU  instrument 
backed  by  the  EU  guarantee,  improving  access  to 
financing for riskier operations in Ireland. 

Graph A16.1: Distribution of RRF funding in Ireland 
by policy field 

(1) Each RRP measure helps achieve the aims of two of the 
six policy pillars of the RRF. The primary contribution is shown 
in the outer circle while the secondary contribution is shown in 
the inner circle. Each circle represents 100% of the RRF funds. 
Therefore, the total contribution to all pillars displayed on this 
chart amounts to 200% of the RRF funds allocated. 
Source: European Commission. 

(241) As  of  mid-May  2025,  Ireland  has  submitted  2  payment 

requests.  

(242) An  overview  of  Ireland’s  formally  approved  strategy  to 
implement  the  EU’s  common  agricultural  policy  nationally 
can  be  found  at:  https://agriculture.ec.europa.eu/cap-my-
country/cap-strategic-plans/ireland_en  

(243) Data reflect the situation on 31.12.2024. 

Green transitionDigital transformationSmart, sustainable andinclusive growthSocial & territorial cohesionHealth & resilienceNext generation 
 
 
      
 
 
 
 
Graph A16.2: Distribution of cohesion policy 
funding across policy objectives in Ireland 

Research  Council  as  top  priorities  In  Ireland.  The 
Technical  Support  Instrument  (TSI)  in  Ireland  is 
focused  on  enhancing  tax  information  exchange 
and  compliance  in  the  platform  economy  and 
advancing  the  AI  capabilities  at  the  Central  Bank 
of Ireland.  

Source: European Commission 

Cohesion  policy  funds  aim  to  increase  the 
productivity  and  competitiveness  of  Irish 
firms and improve the business environment. 
The  European  Regional  Development  Fund  (ERDF) 
focuses  on  strengthening  the 
links  between 
domestic  small  and  medium-sized  enterprises 
(SMEs)  and  technical  universities  to  ensure  that 
each  region’s  enterprise  base  can  improve  its 
competitiveness  and  innovation  potential.  ERDF 
programmes are expected to support over 10 000 
businesses’ 
technological 
collaboration  with 
universities  in  the  three  Irish  regions  to  enable 
knowledge  transfer  and  enhance  the  productivity 
of the indigenous enterprise network. The ESF+ on 
the  other  hand  supports  development  of  skills 
across  education  levels  and  removes  barriers  for 
vulnerable  groups.  It  addresses  skills  shortages 
through 
reskilling 
programmes  aligned  with  labour  market  needs. 
EUR 131  million 
is 
allocated to these initiatives. 

(25%  of  ESF+  funding) 

upskilling 

flexible 

and 

in 

in 

rail 

are 

contributing 

Ireland,  for 

to 
Other 
funds 
competitiveness 
instance 
through  open  calls.  The  Connecting  Europe 
Facility  has  financed  strategic  investments  for 
instance 
infrastructure  and  maritime 
transport infrastructure, also in decarbonisation of 
It  supports  the 
the  road  transport  system. 
development  of  key  infrastructure  projects  that 
allow 
integration, 
energy  market 
decarbonisation of the energy system and security 
of  energy  supply,  and  in  particular  electricity 
interconnectivity; as well as increased the capacity, 
resilience  and  security  of  backbone  infrastructure 
by  deploying  submarine  cables  connecting  Ireland 
to France, Portugal and Spain. Horizon Europe has 
supported research and innovation, from scientific 
breakthroughs  to  scaling  up  innovations,  with 
Digital,  Industry  and  Space  and  the  European 

for 

to 

the 

Ireland’s  RRP  also  contains  ambitious 
business 
improve 
measures 
environment  and  competitiveness.  As  part  of 
the  measures  covered  by  the  second  payment 
request  submitted over the past year, Ireland has 
implemented a reform that broadens the scope of 
the  SME  Test  to  reduce  regulatory  barriers  to 
entrepreneurship. 

EU  funds  are  playing  a  significant  role  in 
promoting  environmental  sustainability  and 
green transition in Ireland during the current 
seven-year  EU  budget  (multiannual  financial 
framework).  The  ERDF  is  supporting  owner-
occupiers  of  residential  homes  who  are  in,  or  at 
risk  of,  energy  poverty  through  deep  retrofitting 
activities. More than 5 000 such homeowners will 
be supported by the EU programmes to make their 
homes  more  energy  efficient  and  reduce  the 
amounts  spent  on  energy.  Under  Ireland’s  CAP 
strategic plan for 2023-2027, EUR 2.5 billion in EU 
funding supports eco-friendly farming, biodiversity 
and emissions reduction - comprising EUR 1 billion 
from  European  Agricultural  Fund 
for  Rural 
Development  and  EUR 1.5  billion  from  European 
Agricultural Guarantee Fund eco-schemes. 

request 

Ireland’s  RRP, 
including  the  REPowerEU 
chapter,  contains  a  comprehensive  set  of 
reforms  and 
investments  for  the  green 
transition.  The  measures  covered  by  the  second 
payment 
in 
include 
sustainable  transport  through  the  awarding  of 
contracts  for  targeted  works  enabling  future 
electrification  of  the  Cork  Commuter  Rail  and  the 
launch  of  the  Enterprise  Emissions  Reduction 
Investment  Fund  to  help  businesses  move  away 
from  fossil  fuels  towards  more  sustainable 
alternatives. 

investments 

Promoting  fairness,  social  cohesion  and 
improving  access  to  basic  services  are 
among  the  key  priorities  of  EU  funding  in 
Ireland.  Over  50%  of  ESF+  funding  (EUR 242 
million)  targets  social  inclusion  in  Ireland,  with 
emphasis on children, young people and migrants. 
This  includes  developing  and  testing  innovative 

99 

Smarter EuropeGreener EuropeConnected EuropeSocial EuropeEurope closer to citizensJTF specific objective 
      
Table A16.1:Selected EU funds with adopted allocations - summary data (million EUR) 

(1) The cut-off date for data on disbursements under the RRF is 31 May 2025. 
(2) Cohesion policy 2014-2020 allocations include REACT-EU appropriations committed in 2021-2022. 
(3) These amounts relate only to disbursements made from 2021 onwards and do not include payments made to the Member 
State before 2021.  Hence the figures do not comprise the totality of payments corresponding to the 2014-2020 allocation. The 
cut-off date for data on disbursements under EMFAF and EMFF is 29 April 2025.  The cut-off date for data on disbursements 
under cohesion policy funds, AMIF, BMVI and ISF is 5 May 2025. 
(4) AMIF - Asylum, Migration and Integration Fund; BMVI- Border Management and Visa Instrument; ISF - Internal Security Fund. 
(5) Expenditure outside the CAP strategic plan is not included. 
(6) The cut-off date for data on EARDF disbursements is 5 May 2025. The information on EAGF disbursements is based on the 
Member State declarations until March 2025.  Disbursements for the Direct Payments (EAGF) started in 2024. 
Source: European Commission 

pension 
landscape  for  greater  simplicity  and 
consistency. In 2024, the TSI assisted in designing 
accountability  and  best  practice  frameworks  for 
mental  health  policy  and  adoption  systems,  as 
well  as  improving  accommodation  policies  for 
International Protection Applicants. 

approaches  for  integrating  disadvantaged  groups. 
A further EUR 68 million is allocated for food and 
material  aid  for  the  most  deprived.  The  ERDF  is 
supporting a EUR 120 million scheme to revitalise 
small  and  medium-sized  towns,  enhancing  social 
cohesion.  It  aids  local  authorities  in  reimagining 
town  centres  and  transforming  vacant  heritage 
buildings  through  renovation  and  adaptive  reuse, 
aligning  with  New  European  Bauhaus  values: 
inclusion.  The 
sustainability,  aesthetics  and 
scheme emphasises a citizen-centred, community-
led planning and design approach. 

Ireland’s  RRP  contains  several  reforms  and 
investments  related  to  fairness  and  social 
policies. As part of the measures covered by the 
second payment request, Ireland has implemented 
several  key  reforms  such  as  the  setting-up  of 
Community  Health  Networks 
enhance 
healthcare  quality  and  the  streamlining  of  the 

to 

100 

Instrument/policyDisbursed since 2021   (1)             RRF grants (including the RepowerEU allocation)323.8RRF loans0 Instrument/policyAllocation 2014-2020 (2)Allocation 2021-2027 Disbursed since 2021 (3)    (covering total payments to the Member State on commitments originating from both 2014-2020 and 2021-2027 programming periods) Cohesion policy (total)1 028.7 988.6 611.3European Regional Development Fund (ERDF) 470.8 395.7 214.5European Social Fund (ESF, ESF+) and the Youth Employment Initiative (YEI) 694.3 508.4 370.6Just Transition Fund (JTF) 84.5 26.2European Maritime, Fisheries and Aquaculture Fund (EMFAF) and the European Maritime and Fisheries Fund (EMFF) 147.6 142.471.9Migration, border management and internal security - AMIF, BMVI and ISF (4) 66.0 74.932.7The common agricultural policy under the CAP strategic plan (5)Disbursements under the CAP Strategic Plan (6)Total under the CAP strategic plan2 821.2European Agricultural Guarantee Fund (EAGF)2 321.0European Fund for Agricultural Development (EAFRD) 500.2Allocation 2023-20277 534.65 976.41 558.2Allocation 2021-2026 1 153.80FisheriesMigration and home affairs 
 
 
      
 
Table A16.2:Summary table on 2019-2024 CSRs 

(Continued on the next page) 

101 

IrelandAssessment in May 2025*Relevant SDGs2019 CSR 1Some progressAchieve the medium-term budgetary objective in 2020. Use windfall gains to accelerate the reduction of the general government debt ratio.No longer relevantSDG 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.Some progressSDG 8, 16Addresstheexpectedincreaseinage-relatedexpenditurebymakingthehealthcaresystemmorecost-effectiveandbyfullyimplementingpensionreformplans.Some progressSDG 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 progressSDG 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 progressSDG 7, 9, 10, 11, 13sustainable transport,Some progressSDG 10, 11water, Some progressSDG 6, 10, 11, 12, 15digital infrastructure Substantial progressSDG 9, 10, 11and affordable and social housing, taking into account regional disparities.Some progressSDG 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 progressSDG 8, 9and by reducing regulatory barriers to entrepreneurship.Some progressSDG 8, 92020 CSR 1Some progressTakeallnecessarymeasures,inlinewiththegeneralescapeclauseoftheStabilityandGrowthPact,toeffectivelyaddresstheCOVID-19pandemic,sustaintheeconomyandsupporttheensuingrecovery.Wheneconomicconditionsallow,pursuefiscalpoliciesaimedatachievingprudentmedium-termfiscal positions and ensuring debt sustainability, while enhancing investment.No longer relevantSDG 8, 16Improveaccessibilityofthehealthsystemandstrengthenitsresilience,includingbyrespondingtothehealthworkforce’sneedsandensuringuniversalcoverage for primary care.Some progressSDG 32020 CSR 2Substantial progressSupport employment through developing skills.Some progressSDG 4Address the risk of digital divide, including in the education sector.Full implementationSDG 4Increase the provision of social and affordable housing.Some progressSDG 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 implementationSDG 8, 16and promote private investment to foster the economic recovery.Substanional progressSDG 8, 9Focusinvestmentonthegreenanddigitaltransition,inparticularoncleanandefficient production and use of energy, Substantial progressSDG 7, 9, 13sustainable public transport, Some progressSDG 11water supply and treatment, Some progressSDG 6, 12, 15research and innovation Some progressSDG 9and digital infrastructure.Substanional progressSDG 92020 CSR 4Some progressBroaden the tax base.Limited progressSDG 8, 10, 12Stepupactiontoaddressfeaturesofthetaxsystemthatfacilitateaggressivetax planning, including on outbound payments.Some progressSDG 8, 16Ensureeffectivesupervisionandenforcementoftheanti-money-launderingframework as regards professionals providing trust and company services.Some progressSDG 8, 16 
 
 
 
  
 
Table (continued) 

(Continued on the next page) 

102 

2021 CSR 1No longer relevantIn2022,pursueasupportivefiscalstance,includingtheimpulseprovidedbytheRecovery and Resilience Facility, and preserve nationally financed investment. No longer relevantSDG 8, 16Wheneconomicconditionsallow,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositionsandensuringfiscalsustainabilityinthemedium term.No longer relevantSDG 8, 16Atthesametime,enhanceinvestmenttoboostgrowthpotential.Payparticularattentiontothecompositionofpublicfinances,onboththerevenueandexpendituresidesofthenationalbudget,andtothequalityofbudgetarymeasuresinordertoensureasustainableandinclusiverecovery.Prioritisesustainableandgrowth-enhancinginvestment,inparticularinvestmentsupporting the green and digital transition.No longer relevantSDG 8, 16Giveprioritytofiscalstructuralreformsthatwillhelpprovidefinancingforpublicpolicyprioritiesandcontributetothelong-termsustainabilityofpublicfinances,including,whererelevant,bystrengtheningthecoverage,adequacyandsustainability of health and social protection systems for allNo longer relevantSDG 8, 162022 CSR 1Substantional progressIn2023,ensurethatthegrowthofnationallyfinancedprimarycurrentexpenditureisinlinewithanoverallneutralpolicystance,takingintoaccountcontinuedtemporaryandtargetedsupporttohouseholdsandfirmsmostvulnerabletoenergypricehikesandtopeoplefleeingUkraine.Standreadytoadjust current spending to the evolving situation.No longer relevantSDG 8, 16Expandpublicinvestmentforthegreenanddigitaltransitions,andforenergysecuritytakingintoaccounttheREPowerEUinitiative,includingbymakinguseof the Recovery and Resilience Facility and other Union funds.No longer relevantSDG 8, 16Fortheperiodbeyond2023,pursueafiscalpolicyaimedatachievingprudentmedium-term fiscal positions.No longer relevantSDG 8, 16Addresstheexpectedincreaseinage-relatedpensionexpenditurebyensuringthe fiscal sustainability of the state pension system.Substantional progressSDG 82022 CSR 2Proceedwiththeimplementationofitsrecoveryandresilienceplan,inlinewiththemilestonesandtargetsincludedintheCouncilImplementingDecisionof8September 2021.Submitthe2021-2027cohesionpolicyprogrammingdocumentswithaviewtofinalisingtheirnegotiationswiththeCommissionandsubsequentlystartingtheirimplementation.2022 CSR 3Limited progressFocuseffortsonboostingthecirculareconomy.Inparticular,developbothinfrastructureandpoliciestopreventwasteandincreasereusedandrecycledcontent,anddevelopamoreeffectivesystemfortheseparatecollectionofrecyclable waste, including biodegradable waste.Limited progressSDG 6, 12, 15Promote safer and cleaner waste water circuits.Limited progressSDG 6, 12, 152022 CSR 4Some progressReduce overall reliance on fossil fuels.Some progressSDG 7, 9, 13Acceleratethedeploymentofrenewableenergy,inparticularoffshorewind,includingbyintroducingreformstoimprovetheefficiencyoftheplanningandpermit system, particularly by reducing the duration of procedures.Some progressSDG 7, 8, 9, 13Upgradeenergyinfrastructure,includingforstorageandenhancethestabilityofthe grid.Some progressSDG 7, 9, 13Ensure the fast implementation of deep building retrofits.Some progressSDG 7Acceleratetheelectrificationoftransport,includingbyinstallingchargingfacilities.Some progressSDG 112023 CSR 1Substantial progressWinddowntheemergencyenergysupportmeasuresinforce,assoonaspossiblein2023and2024.Shouldrenewedenergypriceincreasesnecessitateneworcontinuedsupportmeasures,ensurethatthesearetargetedatprotectingvulnerablehouseholdsandfirms,fiscallyaffordable,andpreserveincentives for energy savingsFull implementationSDG 8, 16While maintaining a sound fiscal position in 2024,Full implementationSDG 8, 16preservenationallyfinancedpublicinvestmentandensuretheeffectiveabsorptionofRRFgrantsandotherEUfunds,inparticulartofosterthegreenand digital transitions.Full implementationSDG 8, 16Fortheperiodbeyond2024,continuetopursueinvestmentandreformsconducivetohighersustainablegrowthandpreserveaprudentmedium-termfiscal position.Full implementationSDG 8, 16Ensurethefiscalsustainabilityofthestatepensionsystembyspecifyingitsfinancing arrangements.Substanional progressSDG 8, 10, 122023 CSR 2Significantlyacceleratetheimplementationofitsrecoveryandresilienceplan,alsobyensuringsufficientresources,andswiftlyfinalisetheaddendumandtheREPowerEUchapterwithaviewtorapidlystartingitsimplementation.Proceedwiththespeedyimplementationofcohesionpolicyprogrammes,inclosecomplementarity and synergy with the recovery and resilience plan.RRP 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.RRP 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. 
 
 
  
 
Table (continued) 

Source: European Commission. 

103 

2023 CSR 3Limited progressAccelerateinvestmentstospeedupthecirculareconomy.Furtherdevelopbothwastetreatmentinfrastructureassociatedwiththehigherstepsofthewastehierarchyandeconomicinstrumentstopreventwasteandincreasereused,remanufacturedandrecycledcontent.Developamoreeffectivesystemfortheseparatecollectionofrecyclablewaste,includingbiodegradablewaste.Divertwastefromlandfillingandincineration,withaparticularfocusonplasticandbiowaste.Limited progressSDG 12Increaseeffortstoaccelerateinvestmentsinthedrinkingwaterandwastewaterinfrastructure.Limited progressSDG 62023 CSR 4Some progressReduce overall reliance on fossil fuelsSome progressSDG 7, 9, 13Focuseffortsonimprovingflexibilityintheelectricitysystemandimprovingenergysystemintegration.Designandimplementadedicatedstrategyforthedevelopmentofdemand-sideresponseandacceleratetheroll-outofsmartmetering infrastructure and smart grid technologies.Some progressSDG 7, 8, 9, 13Streamlinetheplanningandpermittingframeworkforrenewables,storageandgrid connectors.Some progressSDG 7, 9, 11, 13Implementadditionalmeasuresthatsupportenergyefficiencyinprivateandpublic buildings to reduce energy bills and energy system costs.Some progressSDG 7, 9, 13Accelerate the installation of public charging points for zero-emission vehicles.Some progressSDG 7, 9, 13Stepuppolicyeffortsaimedattheprovisionandacquisitionofskillsandcompetences needed for the green transition.Some progressSDG 42024 CSR 1Substantial progressSubmit the medium-term fiscal-structural plan in a timely manner. Full implementationSDG 8, 16 Addresstheexpectedincreaseinage-relatedexpenditurebymakingthehealthcare system more cost-effective. Some progressSDG 8, 16 2024 CSR 2Addressrelevantchallengestoallowforcontinued,swiftandeffectiveimplementationoftherecoveryandresilienceplan,includingtheREPowerEUchapteronceadopted,ensuringcompletionofreformsandinvestmentsbyAugust2026.Acceleratetheimplementationofcohesionpolicyprogrammes.Inthecontextoftheirmid-termreview,continuefocusingontheagreedpriorities,whileconsideringtheopportunitiesprovidedbytheStrategicTechnologiesforEurope Platform initiative to improve competitiveness.2024 CSR 3Limited progressIncreaseinvestmentsindrinkingwaterandwastewaterinfrastructuretoimprovewater quality and reduce leakages.Limited progressSGD 12, 6, 152024 CSR 4Some progressIncreaseeffortstoimprovetheflexibilityoftheelectricitysystemandmoderniseandexpandgridcapacity.Developandimplementastrategytopromotedemand-side responseSome progressSGD 7, 9, 13andstreamlineplanningandpermittingforelectricitystoragefacilitiesandgridconnectors.Some progressSGD 7, 8, 9, 13Increaseeffortstoimproveenergyperformanceofprivatebuildingstoreduceenergy bills and energy system costs.Some progress SGD 7RRP implementation is monitored through the assessment of RRP payment requests and analysis of the bi-annual reporting on the achievement of the milestones and targets. Progress with the cohesion policy is monitored in the context of the Cohesion Policy of the European Union. 
 
  
 
ANNEX 17: COMPETITIVE REGIONS 

Ireland’s  strong  economic  growth  in  past 
decade  has  fuelled  regional  disparities, 
leading to areas in and around Ireland’s two 
biggest cities, Dublin and Cork, leaping ahead 
of  the  rest  of  the  country.  More  balanced 
growth  is  intended  under  the  revised  national 
planning  framework  that  aims  to  strengthen  the 
indigenous  firms'  sector,  create  jobs,  and  develop 
amenities,  transport  infrastructure  and  housing  in 
and  around  a  wider  network  of  smaller  urban 
centres and settlements. 

Ireland’s  economy  has  been  on  a  steady 
growth  path  for  the  past  decade. 
It 
experienced  the  strongest  GDP  growth  in  the  EU 
between 2014 and 2024. The country’s GDP grew 
at  an  average  annual  rate  of  7.1%,  significantly 
outpacing  the  EU  average  of  1.4%.  In  2024,  the 
Irish  GDP  per  head  in  purchasing  power  standard 
(PPS) stood out at 211% of the EU average. 

Economic  growth  has  been  accompanied  by 
strong  population  growth,  which  was, 
however,  uneven  across  the  country.  Overall, 
the  population  grew  by  13.4 per 1 000  residents 
per year between 2014 and 2023. However, while 
the  population  growth  rate  in  the  Dublin  NUTS 3 
region  was  16 per 1 000  residents  per  year,  the 
growth rate in the Border NUTS 3 region was only 
11 per 1 000 
the 
concentration  of  the  population  in  and  around 
Ireland’s  draft  revised  national 
urban  areas. 
planning  framework  identifies  this  pattern  and 
aims  to  achieve  faster  population  growth  outside 
of the Dublin area by 2040. 

increasing 

residents, 

relies 

economy 

Ireland’s 
strongly  on 
multinational  companies  that  have  been 
driving  up  growth  and  productivity  figures. 
Whereas in 1995, the gross value added (GVA) of 
sectors dominated by foreign-owned multinational 
enterprises  represented  about  20%  of  the  overall 
GVA, in 2024, this represented more than 45% of 
the overall GVA. 

levels  of 

Regional  disparities  are  even  greater  at 
territorial  aggregation 
lower 
(NUTS 3  level).  At  this  level  in  2023,  disparities 
between  the  most  urban  NUTS 3  regions  –  the 
Dublin  area  (EM  region)  and  the  Cork  area 
(Southern region) and other areas are even higher: 
the GDP per head in the Dublin area was 366% of 
the EU average and the GDP per head in the Cork 
area  was  360%  of  the  EU  average,  whereas  the 
GDP  levels  per  head  in  the  Midland  and  in  the 
South-East  were  75%  and  96%,  respectively,  of 
the  EU  average.  This  illustrates  stark  disparities 
within the two richest NUTS 2 regions. 

Ireland’s strong economic performance in the 
last  decade  has  fuelled  regional  disparities 
rather  than  bringing  about  convergence. 
Whereas all regions in the country grew in 2014-
2023,  the  NW  region,  which  was  already  lagging, 
had the smallest growth rate of the three regions. 
territorial  aggregation, 
At  a 
differences  are  further  marked  with  the  two 
NUTS 3  regions  having  the  lowest  GDP  levels 
(Midland  and  Border)  also  having  the  lowest 
growth rate in that same period (Graph A.17.1). 

level  of 

lower 

Graph A17.1: Average annual GDP per head growth 
vs GDP per head in 2013 

X axis: GDP per head, 2013 (PPS, index EU-27 = 100).  
Y axis: Annual average real growth of GDP per head, 2014-
2023 (EUR, 2015 prices, %). Bubble size: Population, 2023. 
Source: ARDECO (JRC) 

Regional  disparities  in  Ireland  are  high  with 
differences  of  almost  1  to  2  between  the 
three regions. In 2023, the GDP per head in PPS 
for  the  Southern  region  and  Eastern  and  Midland 
(EM) 
region  stood  at  225%  and  245%, 
respectively,  of  the  EU  average,  whereas  the 
Northern and Western (NW) region’s GDP per head 
stood  at  100%  of  the  EU  average  in  the  same 
year. 

104 

DublinBorderWestMid-WestSouth-EastSouth-WestMid-EastMidland0.02.04.06.08.010.012.014.0050100150200250300GDP per head growth, 2014-2023 (%)GDP per head, 2013 (EU27=100)Capital regionOther NUTS3 regionsLinear (National average)Linear (EU27_2020) 
 
      
 
 
 
Table A17.1:Selection of indicators at regional level in Ireland 

(1) Share of population in a 120-km radius that can be reached within 1h30 (%). 
Source: Eurostat and JRC 

Map A17.1:  Regional competitiveness Index 2.0, 
2022 edition, Efficiency sub-index 

Competitiveness 

All  three  Irish  regions  present  a  strong 
competitiveness  profile  overall.  According  to 
the  Regional  Competitiveness  Index  2.0,  Ireland 
scored  above  the  EU  average  by  12  percentage 
points in 2022. The three regions score high on the 
quality of institutions and infrastructure, economic 
stability,  basic  education,  and  health,  thereby 
showing 
for 
conditions 
fundamental 
competitiveness are met in all three regions. 

that 

in 

relate  mainly 

regional  competitiveness 
Differences 
profiles 
physical 
to 
infrastructure  and  human  capital.  The  NW 
region, and to a lesser extent, the Southern region 
score  significantly  below  the  EM  region  on 
indicators  of  infrastructure  and  of  education: 
higher education, lifelong learning, and the labour 
market  (244).  Statistics  on  educational  attainment 
also  show  a  concentration  of  human  capital 
endowment around large cities. 

Source: DG REGIO, JRC based on Eurostat 

Irish 

three 

regions  are  active 

All 
in 
competitive  sectors,  such  as  high-tech 
industries  and  knowledge-intensive  services 
but  these  industries  are  unevenly  spread 
across  the  country.  The  shares  of  employment 
in  high-tech  and  knowledge-intensive  sectors  are 
above  the  EU  average  in  all  regions  but  the 
highest  concentration  of  employment  in  these 
sectors is found in and around Dublin (EM region). 
It is also in the Dublin and Cork regions that labour 
productivity is the highest (Graph A17.2). 

(244) In this sub-index, the NW region’s score fell short of 90, while 
the  Southern  and  EM  regions  reached  101.7  and  115.6, 
respectively. 

105 

GDP per head (PPS)Real GDP per head growthProductivity - GDP per hour worked (PPS)Real productivity growth (per hour worked)Patent applications to the EPOEmployment in knowledge-intensive servicesEmployment in high-technology sectorsPopulation growthPopulation aged 30-34 with high educational attainmentHousehold income per capita (PPS)Transport performance by carPassenger rail transport performanceAccess to alternative fuel infrastructureGreenhouse gas emissionsIndex EU-27 = 100Average annual % changeIndex EU-27 = 100Average annual % changeper million inhabitants% of total employment% of total employmentAverage annual change per 1000 residents% of population aged 30-34Index, EU27 = 100% of population within 1h30min reach (1)% of population within 1h30min reach (1)Number of electric vehicles charging points within 10 kmtCO2eq. per person20232014-202320222013-20222018-2019202420242014-2023202420222021201920222023European Union (27 MS)1001.61000.912641.55.21.744.81007715.72877.1Ireland2136.72195.615449.610.113.466.497779.57310.9Northern and Western1004.5991.412444.46.911.657.092580.9913.6Southern2259.828010.211344.49.310.763.7101671.71815.2Eastern and Midland2455.42223.619354.611.714.070.5969117.91327.1 
 
 
 
 
 
 
 
     
 
Differences  in  productivity  levels  between 
regions reflect Ireland’s growing productivity 
gap  between  indigenous  firms  and  large 
multinational corporations.  Labour productivity 
in Irish-owned firms is four times lower than that 
in foreign-owned companies and the gap between 
the  productivity  levels  of  both  types  of  firms  has 
been  growing.  Whereas 
labour 
Irish-owned  firms  represented 
in 
productivity 
37.2%  of  productivity  levels  in  foreign  firms,  it 
in  2021 (245).  These 
only  stood  at  19.5% 
differences  in  productivity  levels  are  reflected  at 
the  regional  level,  with  the  EM  and  the  Southern 
regions  having  very  high  productivity  per  hour 
levels  (GDP  (PPS))  standing  at  222%  and  280%, 
respectively,  of  the  EU  average,  while  the  NW 
region  only  reached  99%  of  the  EU  average  in 
2021. 

in  2013, 

Graph A17.2: Labour productivity per hour 

Unit: Real GDP per hour worked (EUR, 2015 prices) 
Source: ARDECO (JRC) 

Irish 

three 

The 
regions  have  sizeable 
research expenditure, but R&D expenditure is 
the  highest  around 
Ireland’s  big  cities. 
Research and development expenditure in nominal 
terms was the highest in the EM region. It was 2.7 
times greater in the Southern region compared to 
the  NW  region,  and  business  research  and 
development  was  three  times  greater  in  the 
Southern  region  compared  to  the  NW  region. 
fiscal  and 
However, 
innovation  gap 
structural  plan  highlights  the 
between  foreign-owned  and  indigenous  firms  and 
the  need  to  boost  innovation  ecosystems  for  the 
benefit  of  indigenous  firms.  Supporting  regional 

Ireland’s  medium-term 

innovation ecosystems is also a main focus of the 
two  European  Regional  Development  Fund 
programmes in Ireland. 

Social fairness 

Labour market conditions are better than the 
EU  average  in  all  Irish  regions,  but  this 
positive  labour  market  trend  does  not  go 
without  challenges  for  each  region.  In  2024, 
the  unemployment  rate  across  Irish  regions  was 
lower  than  the  EU  average.  Youth  unemployment 
also  stood  lower  than  the  EU  average.  However, 
this  positive  labour  market  trend  comes  with 
challenges:  urban  areas  face  acute  challenges 
linked  with  housing  and  the  cost  of  living,  while 
rural  areas  face  higher  levels  of  poverty  and 
deprivation. 

Affordable  housing  remains  a  challenge  in 
Ireland,  particularly  in  urban  areas.  The 
housing cost overburden rate (246) is twice as high 
in  cities,  compared  to  rural  areas,  placing  a 
substantial  burden  on  residents  within  cities.  On 
average,  4.7%  of  the  population  faced  housing 
cost  overburden  in  2024,  with  the  share  having 
increased  substantially  between  2021  and  2023. 
Housing  is  one  of  the  key  strategic  priorities  in 
Ireland's national planning framework. 

The  gap  in  the  risk  of  poverty  or  social 
exclusion  between  rural  areas  and  urban 
areas  has  increased.  In  2024,  19.3%  of  the 
country's rural population was at risk of poverty or 
social exclusion, compared to 16.7% in towns and 
suburbs, and 13.0% in cities. Although the risk fell 
in rural areas compared to 2022 (-5.1 percentage 
points), in other areas it rose significantly. The NW 
region  is  the  most  affected,  with  21.2%  of  the 
population  being  at  risk  of  poverty  or  social 
exclusion in 2024. 

in  accessibility 

Regional  disparities 
to 
essential  services  remain.  In  the  EM  region, 
91% of the population within a 120 km radius can 
be reached by car in less than 90 minutes. This is 
67%  in  the  Southern  region  and  only  58%  of  the 

(245) Ireland’s  Central  Statistical  Office 

-  PIA18  Labour 
Productivity  at  Constant  Prices  by  Domestic  and  Foreign 
Ownership. 

(246) The  housing  cost  overburden  rate  is  the  percentage  of  the 
population living in households where the total housing costs 
('net'  of  housing  allowances)  represent  more  than  40  %  of 
disposable income ('net' of housing allowances) 

106 

30507090110130150170201220132014201520162017201820192020202120222015 EUR per hour workedOther NUTS2 regionsCapital regionNational averageEU 27 average 
          
 
 
framework  and  its  national  development  plan  as 
one of the country’s priorities up to 2040. 

GHG  emissions  linked  with  the  residential 
sector  have  started 
to  decrease,  but 
challenges remain. Fossil fuels remain the main 
source of energy for heating. The use of electricity 
for heating is still low, ranging from close to 17% 
in  Dublin  to  only  7%  in  the  Border  region (249). 
Energy efficiency remains an area to be improved 
across regions, with almost all regions still having 
more  than  half  of  their  residential  stock  with  an 
energy  rating  of  between  C  and  G (250).  The  two 
European 
Fund 
programmes in Ireland are investing in the uptake 
of energy efficiency across the country. 

Development 

Regional 

population in  the NW  region.  Accessibility  by  train 
is even more uneven across the country. This leads 
to differences in terms of access to basic services 
(such as hospitals) (247). Accessibility is one of  the 
areas  that  has  been  flagged  by  Ireland  in  its 
and 
planning 
revised 
significant funding for better regional accessibility 
has been set aside by the Irish government. 

framework 

national 

Sustainability 

All  three  Irish  regions  are  underperforming 
compared  to  the  EU  average  in  terms  of 
greenhouse  gas  (GHG)  emissions  per  capita. 
The average Irish resident emitted 10.9 tonnes of 
CO2  equivalent  in  2022,  compared  to  7.1  tonnes 
for the average EU resident. The Southern and the 
NW  regions  present  the  highest  emissions  per 
capita  with  15.2  and  13.6  tonnes  per  capita, 
respectively, compared to 7.1 tonnes per capita for 
the EM region. 

the 

Sectors 

three 
responsible 

The  relative  importance  of  GHG  emitting 
sectors  in  the  regional  mix  explains  the 
performance  of 
regions  on 
for  most 
emissions. 
emissions  are  agriculture,  followed  by  transport, 
energy 
industries  and  the  residential  sector. 
Whereas  emissions  linked  with  energy  industries 
and  the  residential  sectors  have  decreased  over 
the  past  20  years,  emissions 
linked  with 
agriculture  and  transport  have  remained  static. 
Therefore,  areas  with  strong  agricultural  sectors 
and  regions  that  house  a  high  number  of 
commuters underperform. 

Sustainable transport is lagging behind in all 
regions. Except for Dublin, the number of  electric 
vehicles charging points within a 10 km radius (248)  
at  NUTS 3 level  is  significantly  lower than  the  EU 
average of 287, ranging from just 7 to 23. Public 
is  also 
transport 
transport) 
underdeveloped.  Sustainable  mobility 
is  also 
its  national  planning 
flagged  by 

(particularly 

Ireland 

rail 

in 

(249) Source: 

Central 

Census: 
Statistics 
https://www.cso.i.e./en/census/census2016reports/census201
6smallareapopulationstatistics/. 

Office 

(247) Only  22%  of  the  rural  population  live  within  a  10-minute 

drive of the nearest hospital. 

(248) Indicators  of  access  to  alternative  fuel  infrastructure  are 
based on calculations by DG REGIO and the JRC, using data 
from  the  European  Alternative  Fuels  Observatory  (EAFO), 
Eurostat, TomTom and Eco-Movement. 

(250) The  statistics  on  NUTS 3  area  shows  that  it  would  be 
beneficial  for  all  regions  to  make  some  improvements.  This 
is  further  supported  by  the  building  energy  rating  in  the 
regions. The regions perform equally, except for the Mid East 
that scores a bit better with more than half of buildings there 
having an A or B energy rating. 

107