State takes in record €5.9bn in environmental taxes in 2025

By David Forsythe

The State collected a record €5.9b billion in environment-related taxes last year, with households paying almost €3.5 billion of the total.

New figures from the Central Statistics Office (CSO) show environmental tax receipts rose by 7 per cent, or approximately €400 million, during 2025.

It was the highest amount collected in any year between 2016 and 2025.

Households paid 59 per cent of the total, contributing €3.468 billion through taxes and charges on energy, transport and other activities classified as having a negative environmental impact.

Energy taxes remained the largest source of revenue, increasing by 12 per cent to €3.924 billion.

More than half of that amount came from excise duty on petrol, road diesel, marked gas oil and other hydrocarbon fuels, which generated €2.09 billion.

Carbon tax receipts increased by 10 per cent to almost €1.2 billion, while revenue from the Public Service Obligation levy on electricity consumers rose from €63 million to €228 million.

CSO statistician Clare O’Hara said the increase was mainly driven by higher receipts from the electricity levy, fuel excise duties and carbon tax. “Environment taxes reached a record €5.9 billion in 2025, increasing by 7 billion, or €0.4 billion, compared with 2024,” she said.

Transport taxes, including motor tax and Vehicle Registration Tax (VRT), raised a further €1.925 billion.

VRT generated €933 million, while motor tax paid by households and businesses brought in €927 million.

Pollution and resource taxes, including the plastic bag and landfill levies, accounted for just €30m, or 0.5 per cent of the total environmental tax take.

The record figures come as the Climate Change Advisory Council has urged the Government to continue increasing the carbon tax to €100 per tonne by 2030.

In its recommendations for Budget 2027, the council also called for fossil fuel subsidies to be phased out. It criticised emergency reductions in excise duty on petrol and diesel as “insufficiently targeted” and said they were likely to provide the greatest benefit to higher-income households.

The current reductions cut excise duty by 27 cent per litre on petrol and 32 cent on diesel.

They have been extended until September 1st, after which the previous rates are due to be gradually restored over four months. The extension is expected to cost the Exchequer €270 million.

The advisory council said future supports should target vulnerable households and help people permanently reduce their reliance on fossil fuels.

It also called for greater transparency around the use of carbon tax revenue, citing findings by the Comptroller and Auditor General that only 61 per cent of ring-fenced receipts were spent on their intended measures between 2020 and 2023.

Despite reaching a record amount in cash terms, environmental taxes accounted for 4.3 per cent of total tax revenue in 2025, down from 7.7 per cent in 2016.