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Financing Sustainability - Republic of Ireland

There are commercial benefits of integrating ESG considerations into business strategies: cost savings and reductions, attraction and retention of talented employees, mitigating risk and securing investment.

This page lists some of the financial supports, incentives and funding available to organisations in the private, public and not-for-profit sectors for sustainability-related projects.

Tax incentives to decarbonise

Energy support

Resource-efficiency projects

Community energy projects

Social innovation projects

Positive-impact business innovation

Electric vehicles

Bank loans

ESG investment

Supports for water conservation

Tax incentives to decarbonise

Carbon Tax

In a drive to decarbonise Ireland’s economy, the rate of carbon tax increased by €7.50 in September 2022 from €41 per tonne/CO2 to €48.50 per tonne/CO2. A 60-litre tank of diesel increased by an estimated €1.48 and a similar tank of petrol will cost an estimated extra €1.28. The carbon tax will increase each year by €7.50 up to 2029 and by €6.50 in 2030 to achieve €100 per tonne. Here is the trajectory from 2020 to 2030:

(Read more about the measures in Budget 2023 to further decarbonise the economy and meet Ireland’s commitment here.)

Accelerated Capital Allowance

The accelerated capital allowance for energy efficient equipment allows the full cost of expenditure on qualifying energy efficient equipment to be deducted for tax purposes in the year of purchase. In Budget 2022 the ACA was amended to disallow equipment that is directly operated by fossil fuels from qualifying.

In order to qualify, the equipment must be included in the list of energy-efficient equipment maintained and published by the Sustainable Energy Authority of Ireland (SEAI) www.seai.ie.

Businesses can apply the ACA to EVs and charging equipment. For cars in the category “Electric and Alternative Fuel Vehicles” the accelerated allowance is based on the lower of the actual cost of the vehicle or €24,000 (see below).

Find out here about eligibility for the ACA and how to claim, and more information can be found on Revenue’s website here.

Gas vehicles and refuelling equipment

Introduced in the Finance Act 2018, this scheme allows the full cost of expenditure on qualifying gas vehicles and refuelling equipment used for business purposes to be deducted from taxable profits in the year of purchase. The scheme, which is particularly focused on the heavy-duty land transport sector, was due to end on 31 December 2021 but has been extended until 31 December 2024.

Furthermore, in an effort to encourage the transition to lower-emission fuels, the scheme will be extended to include hydrogen powered vehicles and refuelling equipment.

Vehicle Registration Tax (“VRT”)

In order to reinforce the environmental rationale behind the VRT system, Budget 2022 introduced a revised vehicle registration tax table from 1 January 2022, resulting in increases in the rates of VRT.

The €5,000 relief from VRT for battery electric vehicles is being extended to 31 December 2023.

Electrical vehicles – BIK exemption extended

The BIK exemption where an employer makes a battery electric car (both new and used) available to employees has been extended until 2025. This exemption was due to end on 31 December 2022.

There will however be a tapering effect on the BIK exemption threshold value. From 2023 there are new rates for BIK, and the rate for Electric Vehicles will be 22.5% for everything over the exemption threshold. Currently the threshold is set at €50,000, meaning no BIK is due on amounts up to €50,000. For 2023, this threshold will be reduced to €35,000; €20,000 in 2024; and €10,000 in 2025.

Energy support

Reducing energy use will be a big part of Ireland’s efforts to decarbonise its economy. As Taoiseach Leo Varadkar TD stated “The enterprise sector accounts for 13% of Ireland’s emissions. …How a business uses and sometimes wastes energy is one of the main things it can change to bring down its emissions.”

Starting off on the journey to reducing your energy use and emissions can be a bit daunting. There are lots of straightforward actions that will start saving you money straight away. Whatever the size of your business, the first steps to decarbonising are the same:

Understand your energy use and related emissions;
Educate yourself on the early steps that you can take;
And take action, no matter how small.

According to the Sustainable Energy Authority of Ireland (SEAI) businesses typically can save 10% by embedding energy-management practices in their business through no-cost or low-cost measures. Through proactive energy efficiency practices and transition to renewable energy, businesses can save up to 30% of these costs.

To help businesses do this, SEAI have:

free online learning resources with a focus on energy efficiency and energy management, including 20 short, interactive modules on topics like behavioural change and analysis of electricity, oil and gas bills
energy-management online training workshops to help businesses understand energy-management use and embed it into organisations.
SME Guide to Energy Efficiency is a useful resource to help businesses reduce their costs
a €2,000 voucher to cover an energy audit under the Support Scheme for Energy Audits
up to €2,400 towards installing solar panels under the Non-Domestic Microgen Grant (NDMG)

The Temporary Business Energy Support Scheme (TBESS)

The Temporary Business Energy Support Scheme (TBESS) was introduced in 2022 to support businesses with increases in their electricity or natural gas (energy) costs. Your business can make a claim under the scheme if it:

is tax compliant
carries on a Case I trade or Case II profession. This includes charities and approved sporting bodies that carry on certain activities
has experienced a significant increase of 50% or more in its electricity and/or natural gas average unit price.

Qualifying businesses can claim for 40% of the increases in their energy bills. The increase in energy bills must be between the ‘claim period’ and the ‘reference period’.

Further information on the scheme is contained in the TBESS guidelines.

Energy Contracting Support Scheme

The Energy Contracting Support Scheme from SEAI provides financial assistance to help businesses and public sector organisations to deliver energy efficiency and decarbonisation projects through Energy Performance Contracts (EPCs), Local Energy Supply Contracts (LESCs) and Energy Performance Guarantees (EPGs).

Successful applicants receive up to 75% funding of eligible costs, subject to a maximum limit of:

€50,000 for Energy Performance Contracts (EPC) / Local Energy Supply Contracts (LESC)
€25,000 for Energy Performance Guarantees (EPGs)

Further information can be found here.

Project-assistance grants

Businesses and public sector bodies that are developing energy-saving projects and building good procurement practices can also avail of grants from the SEAI of up to €37,500.

Project-assistance grants are available for two specific types of project

Feasibility study and Project Energy Audit

Up to 50% funding to a maximum of €15,000

Final business case and project delivery support grant

Up to 75% funding to a maximum of €15,000 where basic energy performance arrangements are considered and up to €37,500 where energy performance contracting (EPC) is considered

Early expert advice is provided at the project concept stage, and tailored advice is offered to, among others, those involved in SEAI programmes. Find out more here.

Upgrading a heating system

The Support Scheme for Renewable Heat (SSRH) is a government-funded initiative run by the SEAI. It was set up to increase the level of renewable energy in the heat sector. Under the scheme businesses can avail of funding for their transition to renewable heat sources.

The scheme is open to commercial, industrial, agricultural, district heating, public sector and other non-domestic heat users, and is particularly worth considering if your business has high heating costs, for example businesses in the hospitality or agri-food sectors.

Grants are available for either installation (up to 30% of grant for heat pumps) and for on-going operational support (a tariff payment for a period of up to 15 years for heat from biomass and biogas boilers/combined heat and power units (CHP)).

Energy Efficiency Obligation Scheme

Under the Energy Efficiency Obligation Scheme energy suppliers (‘obligated parties’) have to offer supports to make businesses more energy efficient. This applies to all energy types - not just renewable energy – and includes electricity, gas, and solid fuel.

If you are undergoing any of the measures identified in the list of eligible projects on SEAI’s website (e.g. upgrading lighting, ventilation and air conditioning, transport, heating), the obligated party will calculate the energy credits and provide you with both technical and financial support.

Technical support may include providing a certified energy practitioner to carry out energy audits, implementing energy-management systems, identifying energy-efficiency opportunities and measuring and verifying savings once opportunities have been realised.

Financial support can range from:

providing a direct monetary contribution towards a project
facilitating low-interest loans
·negotiating discounts on materials (e.g. lighting supplies, high-efficiency pumps, and motors)
providing reduced energy prices or tariffs.

Find out more here.

Non-Domestic Microgen Grant (NDMG)

The Non-Domestic Microgen Grant (NDMG) provides financial assistance to help businesses and other sectors to install solar PV panels to generate electricity on site. This technology reduces commercial electricity costs and increases security of supply, while enhancing a positive sustainability image. Grants are available for systems up to a maximum 6kWp * (Approx. 16 Panels or 25m²) with potential savings of between €2,000 - €3000 annual electrical costs (depending on installation size and current utility rates).

Find out more here.

EXEED Certified Grant Scheme

SEAI provides grant funding to businesses planning a large energy efficient investment in an asset. EXEED stands for excellence in Energy Efficiency Design, and is a standardised methodology for energy efficient design management. The methodology sets out a clear process to help organisations design to optimize their energy performance. It looks at all energy users within an asset and analyses them to identify the best opportunities specific to the asset.

Businesses benefit by reducing their energy bills and C02 missions, optimising their assets’ energy performance, improving competitiveness, and enhancing their reputation – assets certified under the programme receive a plaque to demonstrate that the asset complies with the standard.

Projects funded include new buildings and designs, such as a new facility or a new process, but also extensions to, or renovation of, existing buildings; energy upgrades of existing buildings; and investments in existing processes.

Small companies can get grants of up to 70% for professional services and up to 50% on costs associated with achieving EXEED certification (see Figure 2)

Any sector, organisation and project can apply to the scheme, but to qualify for grant support, projects must follow the EXEED energy efficient design process, have an impact, align with national climate goals and represent good value for money.

€14 million was made available in 2021 for projects, with grant support of up to €1 million per project. Similar and higher levels of funding is expected to be available over the coming years.

You can find out more about the EXEED Certified Program here.

Energy Efficiency Loan Scheme

The Strategic Banking Corporation of Ireland (SBCI) has launched an Energy Efficiency Loan Scheme (EELS), a low-cost scheme designed to help SMEs, farmers and fishers cut their energy bills, reduce their carbon emissions and improve their sustainability by investing in energy-saving equipment. It aims to support qualifying viable Irish businesses and primary producers (farmers/fishers) by providing access to affordable long-term finance, enabling them to invest in the energy efficiency of their enterprise. More details are available here.

Resource-efficiency projects

GreenStart

Funding is available to SMEs and large companies under the GreenStart programme. Run by Enterprise Ireland under the Climate Enterprise Action Fund, this programme aims to improve a business’s environmental performance through greater resource-efficiency, i.e. using less energy, less water and less raw materials, in turn producing less waste and costing the business less money. The purpose of the scheme is to help companies achieve a competitive advantage and greater market share through enhanced credentials and cost savings.

The typical cost of undertaking a GreenStart assignment is €6,300. Projects may vary in scope from implementing a structured environmental management and reporting system, to understanding the carbon or environmental footprint of products or services. The maximum grant funding available from Enterprise Ireland is €5,000.

GreenPlus

Companies can also apply for funding towards the cost of undertaking a GreenPlus training assignment under Enterprise Ireland’s Business Process Improvement Grants. These grants are designed to assist company managers to develop a high level of environmental management capabilities, drive environmental efficiencies and achieve improved sustainability. GreenPlus is run by Enterprise Ireland as part of the Climate Enterprise Action Fund.

Eligible assignments may include applying international environmental best practices and standards; process improvements with the potential to increase your company’s environmental sustainability; and supply chain or customer tendering requirements.

Assignments may vary in size and scope but will typically be completed within twelve months and will not exceed a total project cost of €100,000.

Climate Action Voucher

A Climate Action Voucher up to a value of €1,800 is available to cover 2 days’ technical or advisory services from an approved service provider. The objective of the Climate Action Voucher is to help companies prepare a plan for the low carbon, more resource efficient economy of the future whether a company is starting out on their green transformation journey or have already started. The voucher is part of Enterprise Ireland's Climate Enterprise Action Fund.

GreenforMicro

You can also apply for support from your Local Enterprise Offices to reduce business costs through its new Green for Micro programme.

Under this programme businesses can avail of advice and technical support, including two days of mentoring with a specialist Green Consultant whose area of expertise will match your specific needs. Your Consultant will prepare a detailed ‘Green for Micro Report’ on your business with advice on specific changes which your business can implement, from resource efficiency, understanding your carbon footprint and implementing an environmental management system.

The Green for Micro programme is suitable for all micro-enterprises with up to 10 employees, but it is particularly suited to businesses in construction and the built environment, retail, manufacturing, textiles and fashion, food, electronics, plastics, and packaging.

BeGreen

Worth checking too is the EPA’s EPA Be Green Programme. This provides an online tool (the 2021 EPA Tool for Resource Efficiency - Green Business Tree) that allows businesses to carry out a quick, free overview of the level of resource efficiency in your company.

Climate Action Fund

The Climate Action Fund (CAF) was established to provide assistance and financial support to projects which will help Ireland achieve its climate and energy targets. The CAF will provide at least €500 million in government funding up to 2027 towards this aim. The Fund will allow for the development of innovative initiatives which, without this support, may not otherwise be possible to accomplish. The Department of the Environment, Climate and Communications (DECC) is responsible for the Fund's implementation.

The Climate Action Fund (CAF) extends to 2027 and will have a number of calls for applications. The scope and scale of projects that will be supported by the various calls may need to vary to ensure the full objectives of the CAF are realised. This may include calls focusing on specific sectors (such as electricity, transport, heat or agriculture) or specific areas (such as capacity building, innovation or community participation).

Following on from the Expressions of Interest process held in 2020, DECC is currently developing proposals to provide further support from the Climate Action Fund through a community climate action programme. Check back here for more information

Climate Planning Fund for Business

The Climate Planning Fund for Business will give businesses funding to come up with a personalised plan to identify how best to remove reliance on fossil fuels in their business. A €1,800 grant to develop a plan and up to €50,000 matched funding to go towards specific capacity building within an enterprise are among the grants available. Interested companies can apply under the Green Transition Fund here.

Emissions-reduction projects

The Enterprise Emissions Reduction Investment Fund is targeted at companies of different sizes and stages of engagement in their decarbonisation journey:

to put in place energy monitoring systems, thereby establishing the carbon footprint of their enterprise;
to make investments in decarbonising their manufacturing processes; and
to support Research, Development and Innovation (RD&I) in low carbon products and processes.

Up to €1 million is available for businesses to upgrade their processes under the Enterprise Emissions Reduction Investment Fund. This will give manufacturing businesses funding to invest in:

carbon-neutral heating processes
smart metering and energy monitoring, and
research and development.

Find out more here.

Community energy-efficiency projects

If your business wants to partner with others in a community to deliver an energy-efficiency project, funding is available from the SEAI.

Under the Better Energy Communities national retrofit initiative, the SEAI provides capital funding, partnerships, and technical support supports energy-efficiency for not-for-profit/community projects. Between 30% up to 50% funding is available for not-for-profit/community projects.

Projects must be partnerships between organisations from different sectors, and upgrades can take place across building types to reduce energy use and costs throughout the community.

More information is available here.

Social innovation projects

Rethink Ireland offers cash grants and business support to social-innovation projects, including those that contribute to a just climate transition and have a positive impact in:

climate-change education

For example, Rethink Ireland created a €200,000 fund to support not-for-profit organisations to increase the sustainability of Cork’s urban and rural communities through environmental, social and economic innovations.

The Sustainable Cork Fund 2019-2020 was available to projects achieving impact in climate action and environmental awareness and community inclusion and cohesion, but also for sustainable employment and economic development, for organisations supporting good quality jobs for all, strengthening Cork’s business environment sustainably and increasing localised economic development.

Visit the Rethink Ireland website for more information.

Community Finance Ireland is the fastest-growing dedicated social finance provider across Ireland and the UK. A charity and a social enterprise operating across the entire island of Ireland, it aims to “create a world-class community finance system that works tirelessly towards ensuring that positive social impact is felt – not just dreamt”.

Since it began trading, it has loaned over £58m (€72m) across the island of Ireland. Supporting loans ranging from £/€ 10k to £/€ 500k.

All clients are ‘matched’ with a local client executive, so clients always have a personal contact nearby – right throughout all stages of the loan requirements from the first yes to the final payment.

All profits are reinvested for the benefit of the sector.

For more, visit Community Finance Ireland.

Positive-impact business innovation

Funding is available from the local authority-funded initiative MODOS, a joint initiative of the Economic Development Office (EDO) of Dublin City Council and the Regional Waste Management Planning Offices.

MODOS offers an innovation fund of up to €2500 to a small number of businesses planning to implement innovative ideas that will result in positive environmental impacts in either the goods or services they offer or in their business operations.

The MODOS Circular Economy Mentoring and Innovation Award also offers free one-to-one mentoring sessions for up to a total of 50 SMEs and micro-enterprises on a range of sustainable business topics. The mentoring service will be delivered in collaboration with expert sustainability consultants, Sustainability Works the Clean Technology Centre, SustHub and Change by Degrees.

Further details and application forms are available on www.modos.ie.

Electric vehicles

Purchasing

Under the SEAI Commercial Electric Vehicles Support scheme, businesses and public entities can get a grant of up to €3,800 for the purchase a new N1 category electric vehicle (typically small goods-carrying vans). This is worth considering even if a business has only one company vehicle.

An eSPSV Business Loan is now available to support small business owners with a Small Public Service Vehicle (SPSV) that are unable to secure finance from Banks and Asset Finance providers and are availing of the government’s eSPSV Grant Scheme to replace their vehicle with a more sustainable model (electric/hybrid). These business loans may only be used by SPSV registered owner(s) for the purchase/replacement of their vehicles that have already been approved grant funding under the eSPSV Grant Scheme 2021 administered by the National Transport Authority and are unable to secure finance from Banks and other commercial lending providers. For more details, visit Microfinance Ireland.

VRT

Battery electric vehicles (BEVs) pay only €120 per annum motor tax, and plugin hybrid electric vehicles (PHEV) only €170 per annum. You also get VRT relief up to €5,000 for BEVs.

In order to reinforce the environmental rationale behind the VRT system, Budget 2022 introduced a revised vehicle registration tax table from 1 January 2022, increasing the rates of VRT.

The 20-band table will remain; however, there will be a 1 percent increase for vehicles that fall between bands 9-12; a 2 percent increase for bands 13-15; and then a 4 percent increase for bands 16-20.

The €5,000 relief from VRT for battery electric vehicles is being extended to 31 December 2023.

BIK

BEVs - not PHEVs - will also qualify for a 0% benefit-in-kind tax on the first €50,000 of the vehicle value without any mileage conditions. The BIK exemption on battery electric vehicles had been due to end in 2022, but Budget 2020 extended the exemption to 2025.

Tolls

Finally, the Low Emissions Vehicle Toll Incentive (LEVTI) is a reduced tolling scheme for LEVs. Administrated by Transport Infrastructure Ireland (TII) on behalf of the Department of Tranport, the Scheme is an expansion on the previous Electric Vehicle Toll Incentive Scheme that commenced in June 2018; it will run until December 31st 2022 (or up to a maximum of c. 50,000 LEVs). At the scheme refunds vary depending on the toll collection location, the toll transaction time and day, the Eligible Vehicle type (i.e. BEV, PHEV, FCEV) and class (i.e. private, light goods vehicle, SPSV and HDV), it is best to check the following websites' tables for peak and off-peak times, and applicable scheme refunds and Maximum Refund Limit per Calendar Year (incl. Vat) as defined under the scheme: https://www.etoll.ie/low-emissions-vehicle-toll-incentive/

Bank loans

Several banks have set targets for green lending to account for percentages of new customer advances, and will support lending to projects in energy-efficient buildings, renewable energy, C02 reduction and other climate-related initiatives.

Some offer discounted finance to businesses who want to implement energy-saving initiatives to reduce their carbon footprint and their costs.

Businesses can borrow from €5,000 to €300,000 for green initiatives that are environmentally focused, such as energy cost reduction, premises energy (retro)fit efficiency improvements, LED lighting, refrigeration, insulation etc but also marketability/improvement of product, reduced community emissions and even rain-water harvesting.

ESG Investment

ESG stands for 'Environmental, Social and Governance'. These criteria are increasingly used by investors to evaluate potential investments.

Companies looking to avail of this capital must change how they embrace and disclose ESG issues. This can mean reviewing your business strategy to include a target for reducing carbon emissions, for example, enhancing your corporate governance, and improving how you describe your sustainability activities (see here for simple ways to do this).

Investors are actively looking to invest in sustainable funds and are screening out certain sectors or companies that they do not want to invest in (like those heavily reliant on fossil fuels, for example). Businesses seeking this investment benefit from being able to collect and report on their sustainability-related activities against a recognised standard, like the UN Sustainable Development Goals.

Water Conservation support for business

Irish Water runs a Water Stewardship Training Programme designed to help businesses reduce water use and running costs, while also protecting the environment. There are courses for small businesses, and for medium and large businesses.

The programme is funded by Irish Water and the Lean & Green Skillnet with the support of Skillnet Ireland and the Department of Education and Skills.

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Sustainability Centre

Financing Sustainability - Republic of Ireland

Tax incentives to decarbonise

Carbon Tax

Accelerated Capital Allowance

Gas vehicles and refuelling equipment

Vehicle Registration Tax (“VRT”)

Electrical vehicles – BIK exemption extended

Energy support

The Temporary Business Energy Support Scheme (TBESS)

Energy Contracting Support Scheme

Project-assistance grants

Upgrading a heating system

Energy Efficiency Obligation Scheme

Non-Domestic Microgen Grant (NDMG)

EXEED Certified Grant Scheme

Energy Efficiency Loan Scheme

Resource-efficiency projects

GreenStart

GreenPlus

Climate Action Voucher

GreenforMicro

Climate Action Fund

Climate Planning Fund for Business

Emissions-reduction projects

Community energy-efficiency projects

Social innovation projects

Positive-impact business innovation

Electric vehicles

Purchasing

VRT

BIK

Tolls

Bank loans

ESG Investment

Water Conservation support for business

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