Ireland collects record €5.9bn in environmental taxes in 2025 as carbon tax rises 10%

Ireland took in a record €5.9 billion from environmental taxes in 2025, up 7% from the previous year, according to new CSO data. Households paid 59% of the total, or €3.468 billion, through taxes on energy, transport, and pollution. Carbon tax receipts alone rose 10% to nearly €1.2 billion, while energy taxes hit €3.924 billion, driven by higher excise duties on petrol and diesel and a jump in the Public Service Obligation levy on electricity. The Climate Change Advisory Council has recommended raising the carbon tax to €100 per tonne by 2030 and phasing out fossil fuel subsidies. It also criticized emergency excise duty cuts on petrol and diesel as poorly targeted, saying they benefit higher-income households most. The current reductions, extended until September, are expected to cost the Exchequer €270 million. The council wants future supports to focus on vulnerable households and help people permanently reduce fossil fuel use. Despite the record cash amount, environmental taxes fell as a share of total tax revenue to 4.3% in 2025, down from 7.7% in 2016. The Comptroller and Auditor General found that only 61% of ring-fenced carbon tax revenue was spent on its intended measures between 2020 and 2023, raising questions about transparency and whether the money is actually driving decarbonization.