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Rapid Surge in ‘Green Mortgages’ as Homes with Higher Energy Ratings Gain Favour in Ireland

The adoption of ‘green mortgages,’ which offer discounted rates for loans on homes with superior Building Energy Ratings (BER’s), has witnessed a significant rise in Ireland. Currently constituting 7.7% of outstanding mortgages, these environmentally conscious mortgage options have seen a substantial increase in new mortgages. Financial institutions offering green mortgages have escalated from 10% of total mortgage loans in Q1 2020 to 35% in Q2 of the current year, marking a noteworthy shift.

This data is part of the Central Bank’s latest report titled ‘Climate Observatory,’ which will be an annual publication to gauge Ireland’s progress in climate change adaptation, utilizing both financial and non-financial metrics.

The report also highlights potential risks, revealing that 20% of loans within Irish financial institutions are ‘exposed’ to low-level risks of coastal and river flooding. This categorization positions Ireland among the top three countries, alongside the Netherlands and Luxembourg, with the most exposed financial systems.

On the emissions front, Ireland is identified as an emission-intensive economy, emitting 6.8 tonnes of CO2 per capita in 2020. This figure is 23% higher than the EU average, 47% higher than the UK, and 48% lower than the US. The report notes that efforts are underway to meet climate targets, such as installing 680,000 heat pumps in Irish homes by 2030; however, as of the end of 2022, only 25,000 heat pumps had been installed.

Certain sectors in the Irish economy exhibit higher carbon intensity compared to the EU average, with the wholesale/retail sector being 33% higher, the accommodation/food sector 46% higher, and the transportation/storage sector a substantial 162% higher.

The report attributes Ireland’s high emissions relative to the EU average primarily to elevated levels of agricultural activity. Livestock, contributing to 74% of agricultural emissions, has led to a 14% increase in emissions since 2012, mainly due to livestock expansion, particularly in the dairy sector.

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