Carol Nolan
Question:437. Deputy Carol Nolan asked the Tánaiste and Minister for Finance to outline the policy justification for carbon taxes and for their progressive increase every year. [28542/26]
View answerTuesday, 21 April 2026
Questions (437)
Written answers
The Government is fully committed to the legally binding emissions reduction targets set by the Climate Action and Low Carbon Development Act to reduce Greenhouse Gas emissions by 51% by 2030, and to achieve carbon neutrality by 2050.
As the Deputy will be aware, carbon pricing and environmental taxation has an important role to play in supporting the green transition. The Programme for Government committed to continue with the planned carbon tax increases, aligning with recommendations from the Climate Change Advisory Council and scientific experts, and to using the resulting revenues raised to support climate action measures and to ensure the most vulnerable are protected from unintended impacts of the tax increase.
Ireland's carbon tax trajectory provides for gradual increases in the carbon tax rate on an annual basis, providing a clear long-term signal to industry and society alike that our future involves a move away from fossil fuels. By maintaining the trajectory of annual carbon tax rate increases, our commitment to transitioning to a carbon neutral economy is reinforced.
Carbon tax funds are ring-fenced for expenditure on measures which will achieve our climate goals. This includes funding for the ongoing rollout of the national retrofitting programme, investment in community energy efficiency measures and funding for greener farming practices, alongside targeted social welfare and other initiatives to prevent fuel poverty and ensure a just transition. These measures are designed to be progressive.
To give effect to the Programme for Government commitment to protect the vulnerable, a targeted package of social protection interventions has been developed, which is informed by ESRI research that was commissioned to address this issue specifically. As of Budget 2026, the Government has allocated over €4.2 billion in carbon tax revenue for the climate and just transition measures since 2020. ESRI analysis consistently shows the lower income deciles are better off as a result of the social protection measures funded by the increased carbon tax.
The full use of carbon tax funds in Budget 2026 is set out in the document linked here: https://assets.gov.ie/static/documents/2c8f3efb/The_Use_of_the_Carbon_Tax_Budget_2026.pdf.
The need to decouple from fossil fuel dependence and achieve energy security is even more apparent now given the levels of volatility in the international fuel markets and revenue raised by the carbon tax supports this aim.