The 2009 Effort Sharing Decision 406/2009/EC (ESD) set annual binding emission reduction targets for EU Member States for the period 2013 to 2020. These targets cover emissions from sectors outside of the EU Emissions Trading System, such as agriculture, transport, buildings and waste. For the year 2020, the target set for Ireland is that emissions should be 20% below their level in 2005. The Effort Sharing Decision allows Member States to meet their targets by means of unused emissions allowances from earlier years, or through purchasing allowances from other Member States or on international markets.
The latest estimates of greenhouse gas emissions, published in October 2021 by the EPA, indicate that 2020 emissions from those sectors of the economy covered by the ESD are expected to be approximately 7% below 2005 levels. According to this report, Ireland will cumulatively exceed the carbon budget implied by our ESD targets by 12 Mt CO2 eq., and we will therefore need to avail of flexibilities in order to comply with our obligations. The most recent estimates of the additional costs of purchasing carbon credits for compliance with these targets were in the region of €6 million to €13 million, depending on the price and final quantity of allowances required.