PwC has called for tax certainty for developers of offshore wind energy projects and a suite of funding and tax measures to support green transition in the agricultural sector among other measures in its climate action pre-Budget submission to the government.

The professional service said the government has a "momentous task" in fighting climate change after the Environmental Protection Agency (EPA) judged that Ireland is "falling critically short" of its emissions reduction target of 51% by 2030.

Peter Reilly, tax policy leader at PwC, said the government would have a difficult task in balancing climate action with the cost of living and other obligations in the budget.

"At the same time, tax policy is a critical lever available to the Government in our fight against climate change," he continued. From tax incentives to encouraging investment in particular areas or the imposition of taxes to discourage certain behaviours and fund a just transition for all, a positive change can be influenced throughout society and business. 

“While the impact of Covid-19 and the war in Ukraine have resulted in unprecedented challenges, in light of the impact of climate change on humanity, it must remain at the top of the agenda."

In Association with

PwC laid out six areas in which the government could make climate action policy, including tax incentives for sustainability initiative investors and entrepreneurs, specifically certainty in the taxation of investment and divestment of renewable energy projects.

PwC also called for capital allowances for enhancing port infrastructure and for improvements to the R&D tax credit regime to support green innovation and climate technology developments.

Tax measures to improve corporate and consumer behaviour in the areas of transport, housing and the transition to electric vehicles outlined by PwC would include a tax saver scheme for hybrid workers, tax relief for retrofit financing, and extending the Help to Buy scheme to include 'help to insulate'.

The firm has also asked for guidance for businesses on the Carbon Border Adjust Management and changes to the EU's Energy Taxation Directive

PwC also wants the government to establish Ireland as a 'green finance hub', with the introduction of a preferential rate of income and corporation tax for returns generated from sustainable investment and the extension of the accelerated capital allowances regime to cover software solutions for ESG management and data reporting.

The company also said Ireland "has the opportunity to take a leading role in the aviation sector's journey to "net-zero" with tax relief for Sustainable Aviation Fuel (SAF) technology development projects, and the extension of accelerated capital allowances regime to apply to energy-efficient or sustainable fuel type aircraft.

Finally, PwC wants the government to ensure a just transition through the allocation of carbon tax revenues and other funding to vulnerable parts of the economy and society, with a continued focus on retrofit social housing and households in danger of fuel poverty, funding and tax measures to support agriculture's transition, and upskilling of the workforce to help develop the green economy.

“A key plank of our 2023 Climate Action Pre-Budget Submission is to ensure that Ireland is considered a prime location for inward investment while fostering a strong indigenous business sector that is focused on decarbonisation," said Rebecca Greene, energy tax policy leader at PwC Ireland.

"The key pillars we have highlighted are in the areas of our offshore wind potential, leveraging our wider technology ecosystem, becoming a hub for the development of ClimateTech/Green Tech solutions and promoting Ireland as a hub for sustainable finance.”

“The tax policy measures proposed take a holistic view of the variety of measures that government could introduce to encourage and incentivise a wide range of businesses, investors and individuals to adopt a more sustainable approach that is aligned with our climate goals and supports a transition to a green economy."

In a previous pre-budget submission developed with the Family Business Network, PwC urged further support for family business.