Carbon tax receipts are used to fund a balanced package of measures, including targeted social protection, agri-environment schemes and large scale home retrofitting. These interventions are designed to prevent fuel poverty, support a just transition, and ensure that households and communities – particularly those on lower incomes – are supported as decarbonisation takes place.
I am advised by the Department of Finance, based on information provided by the Revenue Commissioners, that the receipts collected in respect of Fuel Taxes in each of the past ten years up to 2024 are published on the Revenue website at:
www.revenue.ie/en/corporate/information-about-revenue/statistics/excise/receipts-volume-and-price/excise-receipts-commodity.aspx
The provisional receipts for carbon tax for 2025 are estimated €1.176 billion.
Prior to 2020, receipts from carbon tax were remitted to the Exchequer and funded Government expenditure generally, rather than being allocated to any specific purpose. As such, the detailed breakdown of allocations for those years is not available in the format the Deputy has requested.
In line with the Government’s commitment to allocate funding over this decade to support climate action measures and to ensure the most vulnerable are protected from unintended impacts of the carbon tax increase, between Budget 2020 and Budget 2026, over €4.2 billion in additional Carbon Tax revenues has been allocated to programmes to support a range of social protection, decarbonisation and agri-environment measures.
This total includes over €2 billion to the Department of Climate, Energy and the Environment to support Sustainable Energy Authority of Ireland (SEAI) residential and community energy efficiency upgrade schemes, including the Warmer Homes Scheme, the National Home Energy Upgrade Scheme, the Better Energy Homes Scheme, the Community Energy Grant scheme and the Solar PV Scheme.
It also includes €539 million funded from increases in the carbon tax to part-fund the Agri-Climate Rural Environment Scheme (ACRES) and to continue prior commitments on green agriculture pilot projects, to support farmers as they undertake a range of actions which will result in improved outcomes on biodiversity, climate, air and water quality.
From Budget 2020 to date, €140 million of carbon tax revenue has been allocated to the Department of Transport to support sustainable transport measures such as greenways and electric vehicles. In addition, €35 million has been allocated to the Department of Housing, Local Government and Heritage to fund peatlands rehabilitation, which delivers a range of climate and ecosystem benefits, as well as €42 million allocated to the Just Transition Fund to support the areas most affected by the transition to climate neutrality, to help ensure that no one is left behind.
A breakdown on the annual allocations to key areas is set out below:
|
Programme
|
Department
|
2020 €m
|
2021 €m
|
2022 €m
|
2023 €m
|
2024 €m
|
2025 €m
|
2026 €m
|
|
Retrofitting & Community Energy Efficiency
|
DCEE
|
13
|
113
|
202
|
291
|
380
|
469
|
558
|
|
ODA - Green Climate Fund
|
DCEE
|
2
|
2
|
2
|
2
|
2
|
2
|
2
|
|
Just Transition Fund
|
DCEE
|
6
|
6
|
6
|
6
|
6
|
6
|
6
|
|
Agri-Climate Rural Environment Scheme (ACRES) and green agriculture pilots
|
DAFM
|
3
|
23
|
3
|
81
|
113
|
143
|
173
|
|
Sustainable Transport Measures
|
D/Transport
|
20
|
20
|
20
|
20
|
20
|
20
|
20
|
|
Peatlands Rehabilitation
|
DHLGH
|
5
|
5
|
5
|
5
|
5
|
5
|
5
|
|
Once-off Pilot Housing Regeneration Programme
|
DHLGH
|
20
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Targeted Social Protection Interventions
|
DSP
|
21
|
69
|
174
|
218
|
262
|
306
|
350
|
|
Total
|
|
90
|
238
|
412
|
623
|
788
|
951
|
1,114
|
As the Deputy may be aware, in 2024 the Office of the Comptroller & Auditor General published its Report to the Dail on the results of the examination of the 2023 Accounts of Government Departments and Offices. Chapter 18 of the report on the administration of carbon tax receipts included a finding that, of the €1.36 billion carbon tax revenues allocated over the period 2020-2023, 61% was verified as being spent in year as recorded through carbon tax-specific subheads.
Of the remaining 39%, 17% was allocated to the Department of Social Protection and spent in year but not recorded in carbon tax-specific subheads. In those years, carbon tax funding was provided to part-fund key priorities such as the Working Family Payment, Qualified Child Increase, Fuel Allowance, and the Living Alone Allowance schemes.
Although from an audit perspective the funding had not been accounted for in carbon tax-specific subheads, the funding was clearly allocated and the expenditure accounted for through normal Vote and Accounting Officer frameworks that apply to the use of the public resources, and there were not any significant underspends in the expenditure provided to the schemes in those years.
As is standard practice for monies voted by the Oireachtas, unspent Departmental funding during the year that is not carried over via formal deferred surrender of unspent capital arrangements is liability for Exchequer surrender at year-end, with the C&AG finding that 19% of the funding in that period was surrendered, with the remainder deferred and spent in the following year in accordance with these arrangements. Underspends, while ultimately the responsibility of the relevant Accounting Officer, should be viewed in the context of relating challenges at the time such as the COVID-19 pandemic and the impact on supply chains from the Ukraine war.
My Department issues an annual publication on Budget Day titled The Use of Carbon Tax Funds, which contains further detail on carbon tax allocations, and includes information on the programmes funded from these amounts. All previous versions are available on the Department’s website.
