Government urged to examine farm carbon pricing within 18 months

The Climate Change Advisory Council has called on the Irish Government to analyse its carbon pricing options for the agriculture sector in the next 18 months.

In its Agriculture, Land Use, Land Use Change and Forestry annual review for 2026, the council said that the analysis would build an evidence base required to make informed decisions regarding a national approach to carbon pricing which could work alongside future EU proposals.

In its 2026 report on agri-food systems, the European Scientific Advisory Board on Climate Change (ESABCC) recommended that ‘the EU should introduce a dedicated greenhouse gas pricing system for agriculture, designed to apply the polluter pays principle in a gradual and adaptive manner that encourages the entire agrifood value chain to reduce agricultural emissions’.

While the council is not calling for an immediate farm carbon tax, it states that Ireland needs to examine the costs, incentives and potential impacts on farm incomes before decisions are made on any future pricing mechanism.

The Council noted the carbon tax being introduced by the Danish Green Tripartite Agreement on livestock and agriculture emissions from 2030 at rates of about €40/t CO2 eq which includes a 60% tax rebate to protect farm viability and revenue recycled into green investment in farming.

The specifics of this agreement in Denmark were informed by a large evidence base, the report details.

The report also urges the Department of Agriculture to quantify the implications of the extension of the derogation under the Nitrates Directive on greenhouse gas emissions in the period through to 2030.

Climate toolkit for farmers

The council acknowledged that farmers are under increasing pressure as they face very different risks throughout the year due to extreme weather conditions including excessive rainfall, heatwaves and drought.

It is concerned about the impacts of prolonged and intense winter rainfall events and heat stress during summer, both of which have been strongly linked to climate change on farming activities.

It calls on the Department to develop and deploy a practical climate-risk toolkit tailored to individual land parcels across Ireland within 12 months.

The aim of this tool kit is to equip farmers with more information, financial support and viable alternatives to existing practices to help them become more climate resilient.

A national carbon farming framework would enable early and high rates of farmer participation in carbon farming projects, the report also highlights, recommending to the Department to also assess this option for the future.

Fruit and vegetable sector

The review also warns that Ireland’s reliance on imported fruit and vegetables leaves the food system vulnerable to climate-related crop failures elsewhere and supply-chain disruption, calling for a review of how domestic horticulture could strengthen food security.

Forestry

Forestry planting is well below its annual afforestation target of 8,000 hectares, with just 2,527 hectares of new forest planted in 2025.

This leaves Ireland substantially off track for 18% forest cover by 2050 and contributing to a weakening forest carbon sink.

“The next forestry programme must address the financial, administrative and practical barriers preventing greater participation,” the report states.

Anaerobic digestion

The council said that delays to the Renewable Heat Obligation are holding back the market certainty needed to unlock investment and demand for anaerobic digestion which has received significant public funding through the Biomethane Strategy.

This must be progressed if biomethane is to support farm diversification and energy security.

The report recommends that the Department should integrate climate action and biodiversity improvement into its priorities for the next Common Agricultural Policy which is currently being negotiated, noting that administrative costs and barriers to uptake by farmers must minimised as far as possible.

Climate targets

The Irish agriculture sector has not met its commitment to reduce emissions by 10% by 2025, and without a stronger push, will not meet its 2030 commitments, according to the council.

EPA projections indicate that the ‘with additional measures’ scenario would deliver about a 19% reduction in agriculture emissions by 2030, compared with the 25% target.

The Council notes that the 25% target could be achievable if additional diversification measures identified in the Climate Action Plan are also fully implemented.