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Irish Examiner
3 days ago
- Business
- Irish Examiner
Climate action progress could attract investment, experts say, amid looming hefty EU fines
The Government's delayed approach to complying with climate-related targets and agreements may threaten Ireland's position as an attractive place to do business, according to collaborators of a major report. Marie Donnelly, chair of the Climate Change Advisory Council (CCAC), along with budgetary watchdog Ifac's chief economist Eddie Casey cautioned, since the publication of their report in March, that a likely hefty EU fine for incompliance with agreements could impact foreign direct investment (FDI) opportunities. 'There's good reason to say, given what we are seeing internationally happening and all this uncertainty that is threatening Ireland's competitiveness, that we're going to lean into these areas that are helping (FDI) and attracting multinationals to stay here,' said Mr Casey. The report, 'A Colossal Missed Opportunity — Ireland's climate action and the potential costs of missing targets', found the Government could be on the hook for fines between €8bn and €26bn if it fails to meet its agreed EU climate commitments outlined in legislation. 'The danger is that this is quite close to reality because the additional measures that they have said they will enact, they haven't followed through on yet,' said Mr Casey. If the Government implements the additional measures in its own Climate Action Plan by 2030, it could reduce the fine range to €3bn to €12bn. 'With every crisis, you have opportunities too,' he said. Mr Casey stressed the significance of investing in the renewable sector and meeting climate agreements to maintain relationships with multinationals, especially as trade tensions continue to simmer amid US president Donald Trump's tariff threats and his ambition to lure large firms back to the US. Eddie Casey, chief economist, Ifac. 'Thankfully, it looks like the Government is taking more urgency following the tariffs debacle to really get a grip on how they can deliver and accelerate it,' said Mr Casey. Ifac has long warned against the Government's overdependence on corporation tax for financial padding in annual budgets, however three quarters of the corporation tax haul last year was from US companies and around 40% was collected from just three companies. 'We are incredibly reliant on them and we don't want to lose that,' said Mr Casey. Multinationals have become increasingly interested in locations with a renewable energy supply and a reinforced energy grid as they come under mounting pressure to fuel their electricity-guzzling data centres in a more sustainable way. 'They've been really worried for a long time about Ireland's ability to actually deliver energy so they can, as a tech firm, have a larger data centre,' said Mr Casey. Ms Donnelly echoed Mr Casey's comments and said the EU's Green Deal and its clean competitiveness agenda 'are effectively the same thing'. 'Europe understands that we have to have energy both for our society and our economy,' she continued. 'It's clear that the energy we currently use is neither sustainable, it doesn't have supply security, it can blow the cost of living out of the water, it's largely drawn by not very politically stable parts of the world and it's very bad for our climate because it's full of emissions,' she said. These legally binding EU agreements that Ireland has entered require domestic reductions in greenhouse gas emissions, an increasing share of renewable energy, and improved energy efficiency. A key piece of the legislation is the Effort Sharing Regulation, which Ireland and other EU countries agreed to adopt in 2018. It covers emissions from domestic transport, buildings, small industry, waste, and agriculture. If Ireland emits more than allowed, the state will have to purchase the gap from overperforming countries — those that reduce their emissions more than required. Other countries, including Spain and Portugal, have been overperforming in terms of their climate mandates because they have taken money from other countries that are underperforming. However, Ireland has around five times the cost of missing targets compared to a larger economy such as Germany which is underperforming. However, Mr Casey explained that Germany can afford to miss targets. Marie Donnelly, chair of the Climate Change Advisory Council (CCAC). Ireland has shown Europe it is capable of economic miracles, including its recovery from the banking crisis in 2008 to boasting healthy public finances after years of volatility, including covid lockdowns, soaring inflation and interest rate hikes. However, Ireland has not been as skillful in performing miracles when it comes to its emissions targets. In 2022, Ireland had the second-highest emissions of greenhouse gases per capita in the EU at 11.7 tonnes of carbon dioxide, figures from the Central Statistics Office showed. Ireland's emissions were 56% higher than the EU average of 7.5 tonnes. Meanwhile, the most recent projections from environmental agency EPA showed Ireland can achieve a 25% reduction of emissions by 2030, which is considerably short of the 42% reduction target. In addition, Ireland fell below its renewable energy share target baseline share in 2021, 2022 and 2023 and could face costs from purchasing compliance for falling below its baseline share in 2021 and 2022 but as things stand, not for 2023, according to the climate report. This is because countries have one year to return above their baseline share. Ireland is expected to return above its baseline share in 2024. Ireland's slow movement towards climate progress may be driven by a lack of serious consequences to date. 'There is a view amongst some that this is never going to happen, that they wouldn't be fined,' said Ms Donnelly. She repeated the point that if Ireland does get fined, the bill will without doubt be at least an eye-watering €8bn. Mr Casey also said that 'if they're not going to do it, they're basically breaking the law. The State would have the resources to do that without having to hike taxes or cut spending on any ongoing supports,' he said. Mr Casey added that if this were to happen, it 'would be a colossal wasted opportunity because that is money that could be put towards loads of potential measures that would meet the targets'. If Ireland does not comply with the EU's mandate, the money that Ireland will be fined will transfer to other countries in Europe.
Irish Times
5 days ago
- Business
- Irish Times
Corporate tax receipts forecast to rise despite Trump tariff threat
Despite the threat from US tariffs, the Irish Fiscal Advisory Council (Ifac) believes corporate tax receipts will increase in the short term, shoring up the Government's budgetary position. However, a more protracted trade war between Europe and the US would pose a risk to the Government's tax base, it said. As EU and US negotiators try to broker a deal that would avoid US president Donald Trump's 50 per cent tariffs , due to come into force on July 9th, the Government's budgetary watchdog noted that the biggest payers of corporate tax here were in the tech and pharmaceutical sectors. 'Neither of these are affected by tariffs under current policies,' Ifac's acting chief economist Niall Conroy told The Irish Times, while noting that firms in these sectors were still 'highly profitable'. READ MORE He also highlighted the 'enormous increase in pharmaceutical exports' seen earlier this year, a reflection of firms stockpiling produce in the US ahead of tariffs, which is also likely to boost receipts in the short term. 'This could be offset by lower exports later in the year, but it still points to strong corporation tax this year,' Mr Conroy said. Corporate tax receipts rose to a record €39 billion last year, although this included approximately €11 billion from the Apple tax case . Mr Conroy warned that 'things are more uncertain in the medium term'. 'For example, if tariffs were to directly impact the tech and pharmaceutical sector, corporation tax receipts could suffer,' he said. While pharma has – so far – escaped tariffs, the White House is waiting on a report that could yet see specific tariffs applied to the sector that would have a direct impact on Ireland, as pharmaceuticals constitute a major part of State's exports to the US. Separately, Minister for Public Expenditure Jack Chambers has admitted that infrastructure delivery is in a 'state of paralysis'. 'It's not being accelerated, it's not being advanced,' Mr Chambers told the Global Economic Summit in Kerry. 'That's affecting investment decisions and it's affecting our wider economic growth.' He said 'the acid test' of the new Government would be its ability to deliver big infrastructural projects and that a special infrastructural taskforce within his department had been set up to 'forensically examine' blockages in the system. Mr Chambers said the Government would prioritise the delivery of housing, transport, water and energy infrastructure and that an additional €20 billion would be added to capital investment between 2026 and 2030. A review of the Government's €165 billion National Development Plan will be delivered in July, he confirmed. Mick Mulvaney, former White House chief of staff during Mr Trump's first term of office, told the summit on Monday that there were 'no free traders left in the White House'. 'There's going to be the protectionist wing, which is the Peter Navarro (Trump's trade adviser) wing, and the sort of nuanced wing which is – let's use tariffs as leverage to get better trade deals,' he said. Mr Mulvaney also said fears of third Trump term were unfounded. 'I think he put that to bed on a Sunday talk show a couple weeks back. Of all the things you might want to worry about, you can probably take that one off your list,' the former Republican congressman said.
Business Times
25-05-2025
- Business
- Business Times
Burnout, boredom or bad PR? Global study aims to uncover why accounting's losing its shine
[SINGAPORE] The International Federation of Accountants (Ifac) is leading a global study that aims to measure the attractiveness of the accounting profession, assess talent retention, and understand the reasons behind attrition in the sector. Work on the study began nine months ago and preliminary results are expected in the second half of this year, said Ifac chief executive officer Lee White in an interview with The Business Times. The study, which will survey accountants around the world, is conducted in partnership with the Global Public Policy Committee – a forum comprising the six largest international accounting networks: BDO, Deloitte, EY, Grant Thornton, KPMG and PwC. Asked how many responses the study is targeting, White said: 'I can't give you a figure at this time, but it needs to be of sufficient size that we've got a good statistical basis in which to draw (findings from). 'We're very determined to try and gather that data in a good, diverse spread geographically as well.' To that end, Ifac will tap its network of more than 180 professional accountancy organisations across over 140 jurisdictions. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The study comes amid a persistent global talent crunch in accounting, driven by an ageing workforce, smaller incoming cohorts, and attrition. The US accounting industry has lost about 340,000 workers since the Covid-19 pandemic, bringing headcount to levels last seen in 2010, Bloomberg reported in March last year. In Singapore, cohort sizes for accountancy degree courses in the city-state's autonomous universities have fallen more than 10 per cent since 2018. Fewer students are also selecting accountancy as their first-choice degree. In response to whether long hours and burnout – often cited by accountants as reasons for leaving – contribute to the shortage, White acknowledged that there are 'high demands' and 'pressure' on professionals. He explained: 'But what we've got to understand a little bit more is, how do people feel about that pressure, and is it a pressure that is there at particular times of the year? 'Is the pressure somewhat eased now that we've gone to more of a hybrid working (model)? Or are those changes in work patterns actually adding more to the pressure?' The global study aims to provide data that gives a 'clear sense' of these issues, and improve understanding of the mental well-being of accounting professionals. The data will then be analysed to help 'shape a better narrative' around the accounting profession, or to 'dispel myths' that have taken root over time – such as the perception that the profession is boring, he added. Green standards Another key priority for Ifac is to build on what White sees as 'good progress' in expanding sustainability reporting and assurance efforts. 'Different jurisdictions are moving at different rates, and governments and regulators are looking for guidance from professional accountants as to how (to) set up their frameworks for this type of reporting and assurance,' he said. In March, Ifac updated its International Education Standards to include sustainability competence in the initial training of accountants – setting a new baseline for global education and training programmes. These steps are crucial, he noted, as they equip accountants with the skills to ride the 'momentum of sustainability', and advise clients on adapting to changing business practices. They also help the profession to articulate a 'sense of purpose' – a narrative that could appeal to younger entrants. 'I think we've got a great story to tell as professional accountants, but perhaps we're not telling it as well as we need to,' he added.
