Ameer Randolph
Ireland is set to become the first country in the world to completely divest from fossil fuels. In 2018, the Irish parliament passed a bill requiring the country's €8 billion sovereign fund to withdraw its investments in oil, gas, and coal companies within five years. This move is a significant advance for environmentalists worldwide, and it remains to be seen where the freed-up funds will be redirected. Ireland's greenhouse gas emissions peaked in 2001 and have been reducing since, with the country's overall fossil fuel usage peaking in 2008.
| Characteristics | Values |
|---|---|
| Country | Ireland |
| Fossil Fuel Divestment Bill Passed | Yes |
| Date of Bill Passing | 2018 |
| First Country to Commit to Divestment | Yes |
| Value of Investments in Fossil Fuels | €300 million to €318 million |
| Number of Companies Invested In | 150 |
| Expected Timeline of Divestment | 5 years |
| Current Status of Bill | Expected to become law by the end of 2018 |
| Ireland's Performance on Climate Action | Ranked second-worst in Europe |
| Ireland's Fossil Fuel Usage Peak | 2008 |
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What You'll Learn
Ireland's €8bn sovereign fund to ditch oil, coal and gas assets
Ireland has become the first country in the world to commit to divesting public funds from fossil fuel companies. The Irish parliament passed the Fossil Fuel Divestment Bill, which requires the €8.9 billion Ireland Strategic Investment Fund (ISIF) to withdraw investments in oil, gas, and coal companies within five years. The bill defines a fossil fuel company as one that derives 20% or more of its revenue from fossil fuel exploration, extraction, or refinement. This move sends a powerful signal to the international community about the need to phase out fossil fuels and address climate change.
The ISIF, managed by Ireland's National Treasury Management Agency, had an estimated €300 million invested in the global fossil fuel industry across 150 companies. The divestment bill is expected to become law by the end of 2023, and Ireland's €8 billion sovereign fund will start ditching its oil, coal, and gas assets. This decision aligns with the growing trend of pension funds, sovereign wealth funds, and universities divesting from fossil fuels, particularly after the Paris Agreement set a goal to phase out fossil fuels this century.
The Irish government's decision to divest from fossil fuels has been praised by environmental activists and the Catholic social justice movement. Thomas Pringle, the independent member of parliament who introduced the bill, highlighted the need to stop investing in the expansion of the fossil fuel industry to avert catastrophic climate change. Éamonn Meehan, executive director of the international development charity Trócaire, also welcomed the bill, urging other countries to follow Ireland's lead and divest from fossil fuels.
However, it is important to note that while Ireland has committed to divesting public funds from fossil fuel companies, it still lags behind other European nations in terms of overall climate action. Ireland was ranked as the second-worst performing European Union country in terms of climate change action by the environmental campaign group Climate Action Network (CAN) Europe. Nevertheless, the passing of the Fossil Fuel Divestment Bill is a significant step forward, and it remains to be seen how Ireland's commitment to divesting from fossil fuels will evolve in the coming years.
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Ireland's Fossil Fuel Divestment Bill
Ireland has become the first country in the world to pass a Fossil Fuel Divestment Bill, which commits to withdrawing public money from fossil fuels. The bill was passed in the lower house of parliament with all-party support and is expected to become law by the end of 2018.
The bill requires Ireland's €8 billion national investment fund to sell all investments in coal, oil, gas and peat "as soon as is practicable", which is expected to be within five years. This will affect over €300 million in fossil fuel investments across 150 companies. The bill defines a fossil fuel company as one that derives 20% or more of its revenue from the exploration, extraction, or refinement of fossil fuels.
The bill also allows for investment in Irish fossil fuel companies if it funds their transition away from fossil fuels. It is hoped that this will accelerate the phase-out of fossil fuels and send a clear message to the international community about the need to address the climate crisis. Ireland has been ranked as one of the worst-performing European countries in terms of climate action, and this bill is seen as a significant step forward.
The passing of the Fossil Fuel Divestment Bill is the culmination of efforts by Irish activists and environmental groups, as well as the Catholic social justice movement. It is also part of a wider global movement towards divestment from fossil fuels, with pension funds, sovereign wealth funds, and universities also selling their stocks. Ireland's decision is expected to encourage other countries to follow suit and divest from fossil fuels.
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Ireland's poor performance in reducing greenhouse gas emissions
Ireland has made significant strides towards reducing its dependence on fossil fuels and addressing climate change. In 2018, Ireland became the first country in the world to commit to divesting public funds from fossil fuel companies. The Fossil Fuel Divestment Bill, passed by the Irish parliament, mandated the withdrawal of investments from companies involved in the exploration, extraction, or refinement of fossil fuels. This move sent a powerful message globally and positioned Ireland as a leader in the fight against climate change.
However, despite these efforts, Ireland has struggled to meet its greenhouse gas emissions reduction targets. In 2021, it was reported that Ireland would fall short of its 2020 targets for reducing greenhouse gas emissions. The Environmental Protection Agency (EPA) indicated that urgent action was necessary to meet the 2030 targets set by the European Union (EU). According to the EPA, Ireland's response to climate change needed to undergo major developments and advances in the coming decade.
Ireland's greenhouse gas emissions have shown a downward trend since their peak in 2001. In 2023, emissions reached their lowest level in three decades, with a 6.8% reduction compared to 2022. This decrease was observed in almost all sectors, including significant reductions in the energy and agriculture sectors. However, Ireland's emissions remain well above the EU Effort Sharing reduction commitment of a 42% reduction by 2030. As of 2023, emissions were only 10.1% below 2005 levels, indicating that more aggressive measures are necessary to meet future targets.
One of the challenges Ireland faces is the high contribution of agricultural emissions to its national total. Ireland has the highest agriculture emission contribution among EU member states, resulting in higher-than-average emissions of methane and nitrous oxide. Additionally, the slow implementation of climate policies and measures has hindered Ireland's progress. To address these issues, Ireland has proposed initiatives such as the installation of heat pumps and the retrofitting of homes to improve energy efficiency and reduce energy consumption.
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The impact of divestment campaigns on fossil fuel share prices
Ireland has become the first country in the world to pass a Fossil Fuel Divestment Bill, committing to withdrawing public money invested in fossil fuels. The bill, which passed through the lower house of parliament with all-party support, will require Ireland's €8 billion national investment fund to sell all investments in coal, oil, gas, and peat. This move is expected to result in the sale of shares worth more than €300 million across 150 companies.
The divestment movement has gained momentum, with institutions totaling over $40.5 trillion in assets worldwide having committed to some form of fossil fuel divestment as of July 2023. This includes pension funds, sovereign wealth funds, universities, and faith organizations. The moral and legal arguments for divestment are based on the belief that profiting from damaging the planet is wrong and that investors may be breaching their fiduciary duties by continuing to invest in an industry facing long-term structural risks.
The Fossil Fuel Divestment Bill in Ireland sends a powerful message to the international community and encourages other countries to follow suit in addressing climate change. The bill's impact on fossil fuel share prices in Ireland and beyond remains to be seen, but the trend toward divestment suggests a potential risk to the industry's expected returns.
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Ireland's transition away from fossil fuels
Ireland is making significant strides in its transition away from fossil fuels, becoming a global leader in divestment from this industry. In 2018, Ireland's parliament passed the Fossil Fuel Divestment Bill, a pivotal moment in the country's energy transition. This bill mandates the withdrawal of public funds from fossil fuel investments, specifically targeting coal, oil, and gas assets. The legislation requires the Ireland Strategic Investment Fund (ISIF), valued at approximately €8 billion, to divest from fossil fuel undertakings within five years. This decisive action sends a powerful message about the urgency of addressing the climate crisis and accelerating the phase-out of fossil fuels.
The Fossil Fuel Divestment Bill defines a fossil fuel company as one that derives 20% or more of its revenue from the exploration, extraction, or refinement of fossil fuels. The bill also allows for indirect investments, provided they do not exceed 15% of an asset invested in a fossil fuel undertaking. This flexibility was incorporated through amendments to the original draft, which called for full divestment within five years. The bill's passage is a testament to the dedication of Irish activists, environmental groups, and the Catholic social justice movement, who have worked tirelessly to bring about this change.
The country's commitment to combating climate change is further demonstrated by its efforts to meet international emissions targets. Ireland's Climate Change Assessment Report shows that its greenhouse gas emissions peaked in 2001 and have been decreasing. The transition away from fossil fuels is recognised as a pivotal strategy to address the climate crisis. Ireland's actions align with the global momentum towards divestment from fossil fuels, as seen with pension funds, sovereign wealth funds, and universities divesting from these industries.
While Ireland has made remarkable progress as the first country to commit to divesting from fossil fuels, it still faces challenges in its transition. Ireland has been ranked poorly among European countries in terms of reducing greenhouse gas emissions and taking climate action. However, the passing of the Fossil Fuel Divestment Bill signifies a turning point, demonstrating the Irish government's recognition of the need for urgent action to address the climate crisis.
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Frequently asked questions
Yes. In 2018, Ireland passed a bill that requires the country's €8 billion sovereign fund to move out of fossil fuels 'as soon as practicable'. This makes Ireland the first country in the world to commit to divesting from fossil fuels.
The Fossil Fuel Divestment Bill requires the Ireland Strategic Investment Fund (ISIF) to withdraw money invested in oil, gas, and coal companies within five years. The bill defines a fossil fuel company as one that derives 20% or more of its revenue from fossil fuels. It also allows for investment in Irish fossil fuel companies transitioning away from fossil fuels.
Ireland's divestment from fossil fuels is a response to the climate crisis. According to Climate Action Network, Ireland ranks low among European countries in terms of progress in reducing greenhouse gas emissions. By divesting from fossil fuels, Ireland is sending a clear message about the need to accelerate action on climate change and phase out fossil fuels.
