Ibec's Budget 2027 Submission Puts Energy Costs for Manufacturing at the Forefront
IBEC have presented their Budget 2027 Submission and energy costs is front and centre
Irish manufacturers have plenty to be positive about. Ibec's Budget 2027 submission, "Building a Resilient Economy," confirms that Ireland still holds some of the strongest competitive advantages in Europe for manufacturers, from a highly skilled workforce to a leading tax offering for research and development. At the same time, the submission is honest about the areas holding the sector back, with energy costs sitting near the top of that list.
This piece looks at what the submission tells us about where Irish manufacturing stands today, where energy costs are reducing competitiveness, and what decarbonisation plans and supports Ibec is asking Government to fund in Budget 2027.
What we cover:
Ireland's manufacturing strengths, according to Ibec's own benchmarking
Where energy costs are reducing competitiveness for Irish manufacturers
The decarbonisation plans and supports Ibec wants included in Budget 2027
What this means for your business right now
Ireland's Manufacturing Strengths, According to Ibec's Benchmarking
Ibec's submission benchmarks Ireland against ten peer countries, including the UK, US, Germany, France, and the Netherlands, across skills, taxation, infrastructure, and innovation. The results are genuinely encouraging for Irish manufacturers in several areas.
Ireland ranks first among these peers for its Composite Effective Average Corporate Tax Rate, first for tax support for R&D expenditure as a share of GDP/GNI, and first for high-tech exports as a share of total trade. Irish working age adults also rank first for third level education attainment, and Ireland tops the table for average PISA scores in science, maths, and reading, pointing to a strong long-term skills pipeline.
Taken together, this paints a picture of a manufacturing base with real, durable advantages. Market access through EU membership, a competitive tax regime, and a well-educated workforce are not small things, and they continue to make Ireland an attractive base for manufacturing investment.
Where Energy Costs Are Reducing Competitiveness for Irish Manufacturers
Alongside these strengths, the same benchmarking exercise highlights energy as a clear area for improvement. Ireland ranks 9th out of the ten peer countries on industrial electricity costs, and 9th on public capital stock per capita, with basic infrastructure quality ranking 10th.
The submission also notes that Ireland has the fourth-highest energy import dependency in Europe. This isn't presented as a crisis, but it does mean Irish manufacturers are more exposed than many of their European counterparts to swings in global energy markets, whether that's driven by oil price volatility, LNG supply, or wider geopolitical events.
Ibec frames this clearly as a solvable structural challenge rather than a permanent disadvantage. Ireland has the fiscal capacity and the strategic tools to close this gap. The submission's own words are that Ireland has "a unique opportunity to make its energy system an enabler of sustainable economic growth, instead of a barrier to competitiveness."
Decarbonisation Plans and Supports Ibec Wants in Budget 2027
To help close that gap, Ibec has put forward a detailed set of decarbonisation plans and cost-reduction measures for Government to consider. It's worth being clear that these are recommendations, not commitments, but they give a strong signal of the direction manufacturers should expect policy discussion to take.
On direct energy cost relief, Ibec is asking for a €300 million Exchequer subvention to reduce policy-related fixed costs on electricity bills, specifically the Transmission Use of System Charge and the PSO levy. It has also proposed a €2 billion contingency reserve that could be deployed for inflation-related energy measures if needed, alongside €50 million for ready-to-go emergency supports that could be activated quickly if energy prices spike again.
On decarbonisation specifically, the submission recommends:
Expanding capital and operational supports for decarbonisation and energy efficiency, including removing the project value cap on the EXEED support programme and increasing the cap on the Support Scheme for Renewable Heat from €1 million to €5 million
Fast-tracking a new supply-side support scheme for biomethane production
Freezing the EV Benefit-in-Kind reliefs at current levels rather than tapering them, to keep supporting fleet electrification
Introducing a new super deduction capital allowance for environmental and sustainability related capital investment, modelled on the Dutch Energy Investment Allowance, allowing a 140% deduction on qualifying capital outlay
What This Means for Your Business
Whatever direction Budget 2027 ultimately takes, one thing is already clear from Ibec's own analysis. Energy costs are one of the few areas where Irish manufacturers are genuinely behind their European peers, and reducing exposure to volatile energy prices is quickly becoming a competitiveness issue rather than just a sustainability one.
The good news is that manufacturers don't need to wait on Budget announcements to start acting. Energy audits, efficiency upgrades, and better energy management systems can start reducing exposure to volatile pricing today, regardless of which supports eventually make it into policy.
If you'd like to understand where your own facility stands and what practical steps could reduce your energy costs, Watt Footprint offers a free consultation to help Irish manufacturers get a clear picture of where the opportunities lie.
Kevin Butler
Senior Energy Expert
Manufacturing Energy Efficiency
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