Ireland's State of the Environment Report 2024

92 Chapter 4: Climate Change Figure 4.9  First carbon budget (2021-2025) sectoral ceilings and usage ˜ Budget ˜ Budget used Million tonnes CO 2 eq 0 20 40 60 80 100 120 Other Electricity Transport Buildings (residential) Buildings (commercial and public) Industry Agriculture 60.9% 66.7% 62.0% 64.1% 67.9% 106 30 29 54 40 61.4% 62.5% 7 9 Source: EPA, 2024b 5 The largest sectors included in ESR emissions are the agriculture, transport and residential sectors. LULUCF emissions are excluded along with most emissions from power generation and industry, as these are largely covered by the ETS. 6 Articles 6 and 7 of the ESR provide for the use of two flexibilities, the ETS flexibility and the LULUCF flexibility. The former is targeted at Member States who wish to cancel ETS allowances (and forgo auction revenues) in lieu of a reduced ESR emissions reduction requirement. For Ireland, this flexibility is up to 19.1 Mt CO 2 eq over the period 2021-2030. The second flexibility allows for the recognition of reduced emissions or additional removals in the LULUCF sector up to an agreed limit (26.8 Mt CO 2 eq for Ireland) to be counted towards ESR target compliance, although the level of flexibility used will depend on the actual emissions reduction/removals achieved. Ireland’s proportionally greater access to flexibilities relative to its size in part reflective of an acknowledgement of the lower mitigation potential of the agriculture and land use sector. The amount of each budget that has already been used up significantly affects the level of emissions reductions required over the next 3 years to stay within budget. Across all sectors, average annual emissions reductions of 8.3% are required. For example, in the transport sector, with 64.1% of the budget already used up, annual emissions reductions of 12.4% are now required in 2024 and 2025 to stay within the first carbon budget. For residential buildings, however, the corresponding required emissions reduction is -2.1% per annum, i.e. this sector has exceeded its indicative percentage reduction target and is on track to be below its sectoral emissions ceiling in 2025. Compliance with EU commitments The EU ESR set a 2030 target for emissions reductions in sectors outside the ETS. Emissions from these sectors are collectively known as ESR emissions. 5 Ireland’s target is to reduce ESR emissions by 42% by 2030 compared with 2005 levels, with a number of flexibilities being available to assist in achieving this. In addition, the ESR sets out annual binding national limits for the period 2021-2030. The year 2023 marks the third year in the 10-year period in which emissions data will be assessed to determine compliance with ESR targets. In 2023, Ireland’s ESR emissions exceeded the annual limit by 2.3 Mt CO 2 eq (see Table 4.2). Cumulatively, from 2021 to 2023 and after using the ETS flexibility, 6 Ireland is in compliance with the ESR by a net distance to target of 0.15 Mt CO 2 eq across these years. In 2023, agriculture and transport accounted for 76% of total ESR emissions.