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Inspiring, advocating and endorsing safe, efficient and sustainable transport operations and supply chains
Introduction
Transportation and Storage accounted for over €7 billion in Gross Value Added to the Irish economy in 20231. Imports and exports also depend on logistics and supply chain, and in 2022 Ireland exported approximately €197 billion worth of goods and imported around €140 billion2. Over 111,000 people were directly employed in Q4 2023 across a variety of roles. This is equivalent to the agriculture sector employment figures. There are many ongoing challenges including skills shortages, year on year increased operational costs (exceeding inflation), decarbonisation challenges which are feeding into increased cost of services as well as many other input costs.
We welcome the opportunity to present our pre-budget submission to the Minister for Finance, Paschal Donohoe TD. We offer the observations of our membership on the priorities for government revenue raising and spending in the years ahead.
Read full report or download
Niall Cotton
FTA Ireland Budget Recommendations
Commercial Fleet operators (those in the own account and the Haulage sector) are seeing significant increases in operational costs due to ongoing skills shortage, geo-political implications on the global supply chain, fluctuating fuel pricing as well as the demands to innovate and decarbonise. According to the “FTAI Managers Guide to Distribution Costs 20243 ” report fuel accounts for 48.1% (up from 41% the previous year) of operational costs for Heavy Duty Vehicles.
The most recent report identified average fuel cost per kilometre at 0.49 cent (an increase of approximately 7% on the previous year). Wage inflation exacerbated by the well documented skills shortage is seeing costs increase for drivers by over app. 3% year on year. These issues are not borne solely by the haulage sector who represent 50% of the National Heavy Goods Fleet. The Own Account sector have the same issues.
Energy & Decarbonisation – A Key Focus in Ireland’s Climate Ambitions
Achieving the 51% emissions reduction target by 2030, relative to 2018 levels, as mandated by Ireland’s 2021 Climate Act, poses a particular challenge in the transport and logistics sector – one of the country’s highest-emitting areas. With road freight and personal car use dominating national transport patterns, reducing emissions in this space requires a transformative shift. Electrification of vehicle fleets, investment in infrastructure and subvention, and the development of low-carbon logistics networks are all essential.
However, the sector faces structural hurdles, including reliance on diesel-heavy HGVs, limited EV charging infrastructure for commercial transport, and supply chain pressures that demand speed over sustainability. Meeting the climate target will depend not only on policy and investment, but also on collaboration across government, industry, and consumers to reimagine how goods are move around the country. Pre-budget submission for Ireland’s 2026 transport and logistics sector should be strategic, data-driven, and focused on climate goals, economic growth, and infrastructure resilience. The following list of initiatives by FTA Ireland members are both practical and strategic considerations for the Government for inclusion in developing the 2026 budget.
FTA Ireland Initiatives for consideration in the upcoming budget
Infrastructure For Scaling Up HDV Charging With Targeted Support
To accelerate the transition to zero-emission heavy-duty vehicles (HDVs), Ireland must develop a comprehensive National EV Infrastructure Strategy that stays ahead of demand and meets EU obligations. This strategy should prioritise the rollout of highcapacity charging infrastructure along key transport routes and in areas without access to depot or home charging.
Crucially, support measures such as the Accelerated Capital Allowance4, which allows businesses to claim tax relief on investments in EV charging equipment, including chargers for HDVs, should be expanded, and promoted. This grant-supported approach will help reduce upfront costs and incentivise the logistics sector to invest in the infrastructure needed to future-proof their fleets and meet Ireland’s 2030 climate goals.
Reform VRT to Support Low-Emission Light Commercial Vehicles
Greater investment in low-emission Light Commercial Vehicles (LCVs) is essential to decarbonising transport, but current Vehicle Registration Tax (VRT) policy acts as a barrier. Due to their heavier battery weight, electric LCVs often face significantly higher VRT charges than their diesel counterparts, undermining efforts to promote cleaner alternatives. A comprehensive overhaul of the VRT system is needed to ensure it reflects environmental performance rather than vehicle weight, making electric LCVs more financially viable and encouraging wider adoption across the logistics and delivery sectors.
Reforming Weight Limits to Enable Low-Emission HDV Adoption
To accelerate the transition to low-emission Heavy Duty Vehicles (HDVs), policy reform is urgently needed to address weight restrictions. Electric HDVs typically carry heavier batteries compared to ICE (Internal Combustion Engine), thus reducing their allowable payload under existing limits and making them less commercially viable compared to diesel equivalents.
Incentivising Greener Freight: Tolls Reform Opportunities
As part of efforts to decarbonise transport and logistics, the government should consider in the budget a reduction in tolls for vehicles powered by alternative fuels such as HVO (Hydrotreated Vegetable Oil), CNG (Compressed Natural Gas). A key proposal should include offering zero toll charges for zeroemission electric heavy-duty vehicles (HDVs) such as hydrogen and electricity. The aim of these initiatives is to incentivise the transition to cleaner commercial transport, reduce the carbon footprint of freight movement, and support operators in adopting more sustainable technologies.
Incentivising Greener Freight: Tolls Reform Opportunities
As part of efforts to decarbonise transport and logistics, the government should consider in the budget a reduction in tolls for vehicles powered by alternative fuels such as HVO (Hydrotreated Vegetable Oil), CNG (Compressed Natural Gas). A key proposal should include offering zero toll charges for zeroemission electric heavy-duty vehicles (HDVs) such as hydrogen and electricity. The aim of these initiatives is to incentivise the transition to cleaner commercial transport, reduce the carbon footprint of freight movement, and support operators in adopting more sustainable technologies.
Levelling the Playing Field: Tax Relief/Rebate for Low-Emission Fuels
To accelerate the shift towards cleaner transport, a reduction in excise duty or the introduction of a rebate scheme on low or zeroemission fuels such as HVO, BIOCNG, hydrogen, and electricity. The goal is to bring the cost of these greener alternatives in line with, or below, the cost of conventional diesel. This measure would help remove a key financial barrier for fleet operators and logistics providers (applicable to Hire & Reward and Own Account Operations) seeking to reduce their carbon footprint.
Unlocking HVO’s Potential
Hydrotreated Vegetable Oil (HVO) offers a legally certified CO2 reduction of over 88% per litre compared to fossil fuels, making it a powerful interim solution for decarbonising transport without requiring investment in new vehicles or infrastructure. Despite its environmental benefits, HVO currently receives no recognition or incentive under existing government or tax policy. To accelerate adoption, a review of excise duty treatment is urgently needed, accessible to all HDV, coach, and bus operators. Recognising and supporting HVO use could deliver immediate emissions reductions across Ireland’s freight and logistics sector.
Boosting Fleet Renewal: Grants and Scrappage Schemes
To further drive the transition to low-emission transport, explore proposals to increase grants for new alternatively fuelled vehicles and introduce a scrappage scheme for older (HDV) internal combustion engine (ICE) vehicles. This dual approach would make it more affordable for businesses and individuals to upgrade to cleaner technologies such as electric, hydrogen, or biofuelpowered vehicles. By providing financial incentives and removing older, more polluting vehicles from the roads, the scheme would accelerate fleet renewal, cut emissions, and support Ireland’s broader decarbonisation goals within the transport and logistics sector.
Eco Driver Training: Low Hanging Fruit Opportunity for Emissions Reduction
Eco driver training presents a practical and immediate opportunity to cut emissions in the heavy-duty vehicle (HDV) sector. Backed by the Department of Transport and included in the Government’s 10-year haulage strategy, the programme has shown measurable results – achieving average fuel savings of at least 3.2L/100km per trained driver on articulated vehicles. Despite the course being fully developed and the syllabus confirmed, its rollout has been limited and remains nonmandatory. Currently, FTA Ireland is the only provider registered to deliver this training. Increased support through Skillnet and broader promotion and adoption across the industry could unlock significant environmental and economic benefits, making eco driving a cost-effective tool in meeting Ireland’s transport emissions targets.
Eco Driver Training: Low Hanging Fruit Opportunity for Emissions Reduction
Eco driver training presents a practical and immediate opportunity to cut emissions in the heavy-duty vehicle (HDV) sector. Backed by the Department of Transport and included in the Government’s 10-year haulage strategy, the programme has shown measurable results – achieving average fuel savings of at least 3.2L/100km per trained driver on articulated vehicles. Despite the course being fully developed and the syllabus confirmed, its rollout has been limited and remains nonmandatory. Currently, FTA Ireland is the only provider registered to deliver this training. Increased support through Skillnet and broader promotion and adoption across the industry could unlock significant environmental and economic benefits, making eco driving a cost-effective tool in meeting Ireland’s transport emissions targets.
Fuel savings: case study
Eco fleet and Eco-driving5
- Operators can avail of payments from ECOFleet (An SEAI verified scheme) to the tune of €2,000 per 10,000 litres saved.
- Operators using alternative fuels or multiple types of fuel i.e., HVO, electric or gas can also avail of the scheme through the ECOFleet multifuel option.
Supporting Smarter Fleets: Grants For Retrofitting Telematics Systems
Introducing grants to support the retrofitting of telematics systems in up to five HDVs or buses per operator could significantly enhance fuel efficiency, driver performance, and road safety. In conjunction with Eco-Driver training, these systems provide real-time data on driving behaviour, enabling operators to identify and correct inefficient practices that lead to higher fuel consumption. By incentivising small to medium-sized fleets to adopt telematics, the government can promote more sustainable and safer transport operations, delivering both environmental and societal benefits in line with Ireland’s decarbonisation and road safety goals.
Tyre Efficiency: Incentivising Simple Switch with Significant Savings
Incentivising the use of A or B rated tyres across commercial fleets could deliver notable fuel and emissions savings. According to the SEAI6 , every step up in tyre rating improves fuel efficiency by approximately 0.6L/100km. This means that upgrading from E-rated to A-rated tyres could result in savings of up to 2.6L/100km – comparable to some technological upgrades but at a fraction of the cost. Promoting the adoption of higherrated tyres offers a quick, low-barrier strategy for operators to reduce fuel consumption and emissions, supporting Ireland’s climate goals while also lowering operational costs for the transport sector.
Flexible Finance Models: Support for Leasing Low-Emission HGVs
Providing support for companies that lease alternatively fuelled HDVs and Buses to Operators could remove a major financial barrier to decarbonisation in the freight and passenger sectors. Many operators, particularly smaller ones, lack the capital to invest in new low-emission vehicles outright. By incentivising leasing models, operator can access cleaner technologies without significant upfront costs, allowing them to trial and gain experience with these vehicles. This approach would promote wider adoption and accelerates the transition to a lower-emission logistics sector.
Aligning Public Procurement with Climate Goals in Passenger Transport
Current public procurement policies for passenger transport services in Ireland are misaligned with national climate targets. Rather than incentivising investment in low- or zero-emission vehicles, operators are often selected based on lowest cost favouring older, more polluting ICE vehicles. This undermines both environmental progress and innovation in the sector. To support decarbonisation, the government must revise its procurement criteria to prioritise environmental performance, not just upfront cost. By embedding clear incentives for the adoption of electric, hydrogen, or other low-emission technologies into public transport contracts, operators would be encouraged to modernise fleets, driving sustainable change while delivering sustainable value to the public.
Insurance Incentives for Low-Emission Vehicles: Supporting a Greener Transition
To further support the adoption of alternatively fuelled, ecofriendly vehicles in the transport and logistics sector, the government could encourage the insurance industry to play a key role through targeted initiatives. Potential options include:
Premium Discounts for Low-Emission Vehicles
Offer reduced insurance premiums for operators using electric, hydrogen, BIOCNG, or HVO-fuelled HDVs and buses, recognising their lower environmental impact.
Telematics-Linked Insurance Policies
Encourage eco driving and safer practices by offering performance-based insurance premiums linked to telematics data. Operators demonstrating efficient and safe driving behaviour could benefit from lower premiums.
Incentives for Fleet Modernisation
Introduce insurance benefits for operators who upgrade from older ICE vehicles to new low-emission alternatives, particularly when participating in grant or scrappage schemes.
Green Fleet Certification Discounts
Provide premium reductions to fleets certified under green transport or sustainability standards, such as ISO 14001 or SEAI Energy Efficiency programs, FTA Ireland Silver and Gold Green standards.
Risk Pooling or Group Schemes
Develop group insurance schemes for fleets participating in eco driving programmes or retrofitted with telematics, reducing individual operator risk and cost.
Addressing the Driver & Skills Shortage: Building a Sustainable Workforce
The transport and logistics sector are facing a growing skills shortage, driven by an ageing workforce and a lack of new entrants. Strengthening industry-led apprenticeship programmes is essential to future-proof the sector and attract younger talent. These programmes not only offer clear career pathways but also upskill the existing workforce, raising overall professionalism and compliance standards.
FTA Ireland recommends enhanced supports, including an ‘Apprenticeship Training Tax’ — a refundable tax credit for employers over the course of a two-year apprenticeship. This would make it more feasible for SMEs, which make up the bulk of the haulage sector, to participate. Additionally, a Succession Planning Advice Grant is proposed to help family-run businesses prepare the next generation for leadership.
Apprenticeships like the Logistics Associate and Commercial Driver Programmes, developed in response to national skills reports, are already helping to address workforce gaps. Offered at Level 6 over two years with a day-release model, they combine practical experience with formal education. To ensure accessibility, it’s recommended that all tuition fees be covered by the State under the National Training Fund, encouraging both participation and retention across the sector.
Road Safety/Enforcement for Safer, Fairer Commercial Fleet Operations
Ireland’s current level of enforcement for commercial fleet compliance is under-resourced and unsustainable. With approximately 620 Gardaí assigned to Road Policing Units and over 358,000 commercial vehicles on the road—including light commercial vehicles, HGVs, and PSVs, there is a clear mismatch between enforcement capacity and the scale of regulatory oversight required.
To ensure consistent, fair, and competent enforcement across the country, FTA Ireland recommends increasing dedicated Road Policing personnel to over 800 and boosting resources for Road Safety Authority (RSA) inspectors. Gardaí must also receive specialised training in commercial transport legislation to uphold safety and compliance standards effectively.
Additionally, the introduction of Graduated Fixed Penalties is proposed for minor offences such as driver hours breaches, roadworthiness issues, and overloading. This would streamline enforcement, reduce the burden on the courts, and help create a level playing field for all operators, including international carriers. Collaboration between the Gardaí, RSA, and the Health and Safety Authority (HSA) is essential, backed by sufficient funding and a coordinated strategy to support road safety and fair competition across the freight and logistics sector.
