LIfe Sciences Outlook 2025 - ESG And Energy

Key Points

• Ireland is in the implementation phase of ambitious EU packages aimed at climate and energy transition, which contain measures that are now central to the competitiveness agenda.
• Consenting and permitting decision-makers are required to, in so far as practicable, perform their functions in a manner consistent with specific aspects of Ireland's climate governance framework, as well as acting in compliance with their individual statutory powers and duties.
• The EU is revisiting its approach to sustainability reporting and supply chain diligence measures enacted under the EU Green Deal, with a focus on competitiveness and administrative simplification. The extent of reforms ultimately adopted will be hotly debated and closely monitored.

Climate and Energy Transition

GRID ACCESS

Ireland's National Energy Demand Strategy outlines regulatory decisions around smart energy services and customer demand flexibility and response. A third strand, dealing with the connection of large energy users to the electricity and gas grids, is under development. Customer connection and demand response are areas governed by EU and domestic law. Policy decisions must avoid introducing criteria for customer connections and demand response contrary to those frameworks. Information on policy development to date is on the CRU's website.

ENABLING INFRASTRUCTURE

Ireland's policy on private wires is eagerly anticipated. The consenting of private wires would enable an entity to lay a line to supply its own premises directly from a producer, which would increase supply options for large energy customers, as well as access to corporate power purchase agreements and green benefits. We look at legal principles and the policy consultation in our briefing: Private Wires - First Principles.

CLIMATE GOVERNANCE

Under the Climate Action and Low Carbon Development Act, relevant bodies in Ireland must, in so far as practicable, perform their functions in a manner consistent with specified aspects of Ireland's climate targets and climate governance framework, including its Climate Action Plan. A 2025 High Court judgment provides guidance for relevant bodies - which include, for example, planning and consenting authorities, as they apply this obligation. The obligation will be further considered by the Supreme Court, as proceedings continue.

RENEWABLE ENERGY IN INDUSTRY

Provisions to drive the production and use of renewable energy in industry (including the use of renewable fuels as raw materials in industrial processes) and in the heating and cooling sector are strengthened under amendments to the Renewable Energy Directive, and were required to be transposed into Irish law by 21 May 2025. Requirements around faster permit-granting procedures for technologies like heat pumps are also included. The Irish Government plans to provide new legislation to regulate district heating and cooling. Measures to increase the share of renewable electricity in the energy supply are also now embedded in EU legislation on the internal market in electricity (read more in our briefing on the new internal market in electricity legislation) and in gas (read more in our briefing on Fit for 55 and REPowerEU).

ENERGY EFFICIENCY

The Recast Energy Efficiency Directive, which increases the ambition of Member States' 2030 targets, must be transposed into Irish law by 11 October 2025. The Directive embeds the energy efficiency first principle in large planning, policy and investment decisions and increases targets for energy efficiency and energy savings. It includes changes to obligations on companies to carry out energy audits or implement energy management systems. Depending on how requirements are transposed, more companies may come within the scope of these rules. We look at this in our briefing: Energy management systems and energy audits - New rules under the Recast Energy Efficiency Directive .

BUILDINGS

Transposition of the Recast Energy Performance of Buildings Directive in Irish law is required mainly by 29 May 2026. The Recast Directive will introduce new and strengthened obligations aimed at achieving a net-zero emissions building stock in the EU by 2050. It will require that all new buildings are zero-emission by 2030 and will impose stricter targets to reduce energy use in buildings. We look at the anticipated changes in our briefing: How to get a Net-Zero Building Stock - Q&As on the Recast Energy Performance of Buildings Directive. More sustainable materials' usage is also to be driven through changes in the revised Construction Products Regulation and Ecodesign Regulation.

EMISSIONS

The ambition of the targets in the Effort Sharing Regulation, which obliges Member States to achieve emissions reduction in sectors not in the EU Emissions Trading Scheme ("ETS"), is increased. A new EU ETS ("ETS2"), which will impose a carbon price on fossil fuels supplied for buildings and road transport, will become fully operational in 2027, following the current phase of monitoring and reporting obligations. Further information about the ETS2 in Ireland is available here.

Sustainability Reporting

CSRD

The Corporate Sustainability Reporting Directive ("CSRD") was implemented into Irish law in 2024, and with its first phase of application commencing in 2025. CSRD reporting obligations apply to large Irish-incorporated companies (including holding companies that meet the requirements for a large company on a consolidated basis), issuers with debt or equity listed on an EU-regulated market and Irish subsidiaries or branches of non-EU parent companies which exceed specified turnover thresholds. Sustainability reporting must be included, for each financial year, in a clearly identifiable dedicated section of the directors' report, and include details of the business model and strategy, any time-bound targets, polices, incentive arrangements, details of due diligence processes implemented and principal risks with respect to sustainability matters. Sustainability information must be reported in accordance with European Sustainability Reporting Standards ("ESRS") from a 'double materiality' perspective (i.e. from both a financial materiality and impact materiality perspective). Further information about CSRD, as implemented in Ireland, is available here.

TAXONOMY

Companies within the scope of the CSRD will also be subject to disclosure obligations under Article 8 of the EU Taxonomy Regulation, regarding the extent to which their activities are associated with economic activities which are 'environmentally sustainable'. An economic activity can be classified as 'environmentally sustainable' where it contributes to specified environmental objectives, provided that such activities do not significantly harm any of those objectives and conform to technical criteria and good governance practices.

Sustainability Due Diligence

CSDDD

The Corporate Sustainability Due Diligence Directive ("CSDDD") applies to certain large EU companies and non-EU companies operating within the EU. In-scope companies will be subject to due diligence obligations related to adverse environmental and human rights impacts with respect to companies' own operations, those of their subsidiaries and their chains of activities. In-scope companies will also be required to adopt and implement a climate transition plan. The deadline for Member State transposition has been delayed by one year to July 2027. More information is available in our briefing on the CSDDD.

TARGETED DILIGENCE MEASURES

In addition to CSDDD, the EU has enacted targeted diligence obligations with respect to global supply chains. These include the:

• EU Deforestation Regulation (EUDR), which prohibits specified commodities and derived products associated with deforestation from being imported into, made available in, or for exporting from, the EU unless they are "deforestation-free" and produced in accordance with the relevant legislation of the country of production. More information is available in our briefing on the proposed delay to the EUDR and our briefing on the new supply chain obligations under the EUDR;
• EU Forced Labour Regulation, which will apply from December 2027, applies to all economic operators (EU and non-EU) a general prohibition on placing on the EU market, or exporting from it, any products made with forced labour; and
• EU Conflict Minerals Regulation, which has been in force since 2021, imposes additional diligence requirements on importers of certain metals from conflict-affected and high-risk zones.

Impact of Proposed Omnibus Simplification Package

STOP THE CLOCK

In February 2025, the European Commission published an 'Omnibus' package, which proposed a two-year postponement of CSRD reporting requirements for companies in the second and third waves and delaying transposition and application of the CSDDD by one year. The "Stop the Clock" Directive was approved by the EU institutions in April using urgent procedures, and Member States are required to implement the postponement by 31 December 2025.

SUBSTANTIVE AMENDMENTS

The Omnibus package also proposes substantive amendments to the reporting, due diligence and climate transition plan obligations under the CSRD and CSDDD, which are expected to be heavily negotiated at EU level, including:

• CSRD Scope - confining application to large companies/groups with more than 1,000 employees (and either a turnover above EUR 50 million or a balance sheet total above EUR 25 million), aligning it more closely with the scope of the CSDDD.
• Non-EU Companies - the EU net turnover threshold for non-EU companies is increased to EUR 450 million.
• Optional Taxonomy Disclosures - for companies with a net turnover of EUR 450 million or less, where they do not claim to have Taxonomy-aligned activities.
• Value Chain Cap – a limit on the information that reporting companies can request from entities within their value chains with not more than 1,000 employees.
• Simplified Due Diligence – CSDDD due diligence obligations would be limited to direct business relationships, other than where there is plausible information suggesting adverse impacts in the value chain.
• ESRS - A revision of the current set of ESRS has also been confirmed, including a significant reduction in the number of mandatory data points. EFRAG, the technical advisor to the European Commission, will publish exposure drafts of revised ESRS during the summer for public consultation ahead of its planned submission to the Commission by end October 2025. For more on the proposed amendments, see: Omnibus Package - Proposed Amendments to CSRD and CSDDD.

What's Next?

• Consultations on grid connection policy for large energy user customers merit close scrutiny and response.
• Numerous legal and policy instruments will increasingly seek to drive decarbonisation and efficiencies in the life sciences sector.
• While the clock will be stopped for most large companies with respect to reporting and due diligence obligations under CSRD and CSDDD, proposed amendments to the scope and substance of those regimes are likely to be heavily negotiated over the course of this year and next.

This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.