Construction

Energy Efficiency

The recast Energy Efficiency Directive must be transposed in Irish law by 11 October 2025. A series of Commission recommendations and guidance notes on transposing the new provisions are available here.

The Directive will embed the energy efficiency first principle in large planning, policy and investment decisions and increase the targets for energy efficiency and energy savings. It will also mandate that public body buildings play a leading role. Ireland will be required, by 11 October 2025, to make publicly available an inventory of heated and/or cooled buildings that are owned or occupied by public bodies and that have a total useful floor area of more than 250m2. This is to be updated at least every two years and linked to the building stock overview in national building renovation plans under the Energy Performance of Buildings Directive. Publicly available data about building stock characteristics, buildings renovation and energy performance may be aggregated by the EU Building Stock Observatory.

Materials, Products And Consumers

Timber and Cement

The Climate Action Plan 2024 committed to reduce embodied carbon in construction materials by at least 10% in 2025 and 30% by 2030. Under the Plan, the Sustainable Energy Authority of Ireland is to develop a national database comprising building (and other construction) materials, an official embodied carbon calculation methodology with associated software, and a resultant embodied carbon rating system for buildings.

A number of working groups are involved in this area:

• the Timber in Construction Steering Group, tasked with creating conditions to increase the use of timber in construction. An objective is also to maximise the use of home-grown timber in construction. New obligations under the EU Deforestation Regulation will take effect from a revised date of 30 December 2025;
• the Inter-Departmental Cement Construction Sector Decarbonisation Working Group, which set out principles that public projects commencing design from late 2024 onwards are required to follow; and
• the Modern Methods of Construction Leadership and Integration Group.

Construction Products and Ecodesign

Most of the revised Construction Products Regulation will apply from 8 January 2026. However, certain provisions apply from 7 January 2025, to drive development of harmonised technical specifications and performance standards.

The European Commission has already initiated an infringement procedure against Ireland for not carrying out market surveillance as required by the previous Construction Products Regulation. The Commission considered that Irish authorities wrongly limited their monitoring activities to finished buildings or finalised civil engineering projects. Therefore, there may be a change in approach to monitoring in Ireland in 2025.

Construction products also remain under the scope of the revised Ecodesign Regulation, which requires the Commission to set requirements for cement later this decade, if that is required to bridge potential lacunae in the Construction Products Regulation.

Greenwashing

Other EU law aimed at preventing greenwashing is on the way, with the potential to impact claims made about the green credentials of buildings, infrastructure and construction products. See our ESG section on the Directive on empowering consumers for the green transition and the green claims Directive on substantiation and communication of explicit environmental claims.

Carbon

Pricing Carbon in Fuel for Buildings

On 1 January 2025, reporting and monitoring obligations began under the new EU Emissions Trading Scheme (ETS2), which will impose a carbon price on fossil fuels supplied for buildings and road transport. Further information about the ETS2 is available here. The ETS2 will become fully operational, imposing a cap-and-trade scheme for carbon allowances, in 2027.

Pricing Carbon in Imported Materials

Reporting obligations for importers of certain goods (including cement, iron and steel, and aluminium) into the EU continue into 2025 under the Carbon Border Adjustment Mechanism (CBAM). While the full CBAM will not be operational until 2026, certain reporting obligations change at the start of 2025. Further information on next reporting requirements is available on our website here. The Irish Government has also made domestic regulations for the CBAM, which provide for substantial offences and penalties for non-compliance additional to the mechanisms in the EU Regulation.

Environmental, Social & Governance

Streamlined Regulation

We expect discussion (during the negotiation of construction contracts) around alignment with the wider ESG regulatory framework to continue. Taxonomy-aligned projects are a more attractive asset, and a supply chain capable of helping lenders and large corporates to meet their obligations under the Corporate Sustainability Reporting Directive and Sustainable Finance Reporting Directive is valued. Commission President, Ursula von der Leyen, has indicated that EU sustainability reporting duties included in these instruments will be simplified through an “omnibus” regulation. We look further at the potential simplification of the legislation in our briefing here.

Streamlining Priority Projects

Net-Zero Industry Projects

The EU’s Net Zero Industry Regulation imposes requirements to streamline the permit-granting process for construction or expansion of net-zero technology manufacturing projects (for example in renewable energy, electricity heat and storage, grid, and alternative fuels).

Further detail will emerge in Q1 2025; the Commission is required to provide guidelines by dates in March 2025 for selection criteria of ‘net-zero projects’ (which attract priority status); for minimum requirements on environmental sustainability for relevant public procurement procedures; and for pre-qualification and award criteria for renewable energy auctions.

Critical Raw Materials

It will also be worth watching developments under the new Critical Raw Materials Regulation. In Ireland, the Department of the Environment, Climate and Communications has drawn attention to the Regulation, here, announcing that “projects that receive ‘Strategic Project’ designation will benefit from more streamlined and efficient permitting procedures, as well as facilitated access to finance avenues”.