Dáil Éireann Debate, Thursday - 18 December 2025
113. Deputy Pa Daly asked the Minister for Climate, Energy and the Environment if he has conducted an analysis on the introduction of CBAM on the price of energy; and if he will make a statement on the matter. [72821/25]
View answerHas the Minister of State conducted an analysis of the impact of the introduction of the carbon border adjustment mechanism, CBAM, on the price of energy?
CBAM is an instrument implemented by the European Union to address the risk of carbon leakage. The EU's ambition is to become climate neutral by 2050. CBAM will aim to ensure that imported goods are subject to a carbon price equivalent to the carbon price of domestic production in the EU. CBAM affects the electricity sector by putting a price on emissions associated with electricity produced in countries outside the EU and imported into the EU. It aims to encourage sustainable practices and reduce carbon footprint. For electricity importers, compliance with CBAM initially involves reporting direct emissions associated with electricity production as an imported good from third countries on a quarterly basis, relying on supplier information.
The simplification package that was published in February and adopted in October permits the European Commission to more accurately reflect the carbon price paid, including for imports from Britain, which Ireland welcomes. CBAM is currently evolving at a rapid pace. The week ending 12 December saw voting taking place on some of the implementing regulations and acts, and other votes are to follow in the days and weeks ahead. At this time, until the exact details are clear, any estimation regarding the cost of CBAM in relation to electricity imports is likely to be inaccurate. Overall, CBAM provides an opportunity for the electricity sector to embrace sustainability and contribute to environmental protection by positioning businesses as socially responsible and environmentally conscious players in the market.
I thank the Minister of State for his reply. It is really important that this analysis is conducted. We import 70% of our energy. The EU average is 58%, so we are importing a lot more than normal countries. We are also importing more energy from Britain. The introduction of the CBAM will affect the prices that households, consumers and families are paying. The Government said that energy emissions will fall by up to 68% between 2026 and 2030 when compared with 2018, but that figure is misleading because we are relying more and more on imported energy. We do not know where that energy is produced so we cannot pretend the emissions have disappeared. It is a bit of a distortion. For the families who might be listening in, this is not about climate targets; it is about energy bills. Will the Minister of State tell us clearly whether CBAM will push up energy prices? If he cannot answer that question for me today, will he commit to doing an analysis on how CBAM will affect prices for struggling households?
Deputy Brennan has a question.
I am just coming in on sustainability. I really feel the key to this is the warmer homes scheme. It is an excellent scheme that is being operated at the moment by the SEAI. Will the Minister of State update me on efforts being made to reduce waiting times for people who have applied for the warmer homes scheme because this will be a key part of reducing the amount of energy consumed and meeting our targets?
They are two different topics but I will answer the first one.
I thought Deputy Brennan was coming in on this question.
He has chanced his arm.
Yes. I thank the Leas-Cheann Comhairle.
He has cleverly used his time.
On the first question, it is not accurate at this time to talk about increased energy prices. CBAM is still in a transitional phase. We are working very closely with the European Commission on adopting a simplification package - this arose in October - to clarify how we will be reporting and how carbon prices will be aligned. Until the Act is implemented or finalised early next year, any cost estimates would be speculative and misleading. We have a number of engagements with the European Commission. It is working very closely with the UK on how we carry carbon costs and how they are aligned to the EU emissions trading system price. We are very much focused on encouraging cleaner generation globally.
Deputy Brennan mentioned the excellent warmer homes scheme, which is supporting those who are finding it difficult to maintain rising energy bills. The scheme has one of the largest budgets into 2026, of over €230 million. It has been successful in that it has delivered over 7,700 grants to date. We are ramping up the number of contractors who can support the delivery of these warmer homes. We know how important it is to those who are waiting and who need these upgrades as quickly as possible.
I want to talk about price review 6. Households in Ireland are paying much higher prices - some of the highest prices in Europe - and more and more families are falling into energy poverty and falling behind on their bills. Under price review 6, households and small businesses will be asked to pay even more while the large data centres will be paying less. Household charges could rise by 28% while data centres, which use the most energy, will see their energy prices reduced by 20%. It is just not fair. It is actually egregious. At the same time that energy credits have been taken away from people who are struggling, energy companies that are making huge profits are getting a reduction. One way to ease this pressure would be to change the PSO levy and the network charges so that data centres pay their fair share. Will the Minister of State commit to a restructure of the PSO levy? Will he show that he is full of the Christmas spirit, as I was when I shared my question?
With regard to the Government's commitment, in recent weeks we have seen huge announcements about investment in our electricity and energy system. It is unprecedented and akin to rural electrification. Over €18.6 billion is being invested to reinforce our grid through a number of capital projects. Over 500 capital projects will be delivered right across the country.
We are very much focused on ensuring we can connect the over 300,000 new homes that we have committed to out to 2030, and on continuing to support enterprise and industry. We have heads of Bill for the private wires legislation coming before the House. That will go through committee and both Houses in 2026. It will certainly act as a catalyst for private investors to invest in electricity generation that can support many industries right across the country.
