Dáil Éireann Debate, Thursday - 4 July 2024
107. Deputy Pearse Doherty asked the Minister for Finance if he will commit to postponing scheduled increases in the carbon tax in light of the cost-of-living pressures that households continue to face; and if he will make a statement on the matter. [28567/24]
Amharc ar fhreagraThe Government is conscious of the implications of fuel costs for all sectors of society. This is reflected in the fact that in 2022, in light of the acute impact rising prices were having on households and businesses, the Government provided for temporary cuts in excise rates which, inclusive of VAT amounted to 21 cents, 16 cents and 5.4 cents per litre on petrol, auto-diesel and marked gas oil, respectively.
These temporary cuts to excise rates were initially due to end on 31 August 2022, but following review and monitoring of fuel prices, were extended until February 2023, with a phased restoration of rates occurring in June and September 2023. A final restoration of excise rates was due to take place on 31 October 2023, but Budget 2024 provided for further extension until 31 March 2024, with phased restoration occurring in April and August 2024. The first of these restorations took place on 1 April 2024 adding 4 cent per litre to petrol, 3 cent to auto diesel and 1.7 cent to MGO.
Carbon tax rate increases on petrol and auto-diesel are legislated to occur on 9 October 2024 when the rate of carbon tax will increase from €56 to €63.50 per tonne of carbon dioxide emitted. This will add 2.1 cent per litre of petrol and 2.5 cent per litre of auto diesel, VAT inclusive. Carbon tax increases are implemented annually under the 10-year carbon tax trajectory that was introduced in Finance Act 2020. The 2020 Programme for Government committed to increasing the amount that is charged per tonne of carbon dioxide emissions from fuels to €100 by 2030, and the 10-year trajectory of carbon tax increases delivers on that commitment. The commitment also features as one of the nine reform measures in Ireland’s National Recovery and Resilience Plan.
It is important to note that a significant portion of carbon tax revenue is allocated for expenditure on targeted welfare measures and energy efficiency measures, which not only support the most vulnerable households in society but also in the long term, will mitigate fuel price impacts by reducing our reliance on fossil fuels.
In the long run the best way to protect Ireland from the impact of international fossil fuel prices is to reduce our dependence on them. We will achieve this through the progressive decarbonisation of Irish society and through the steps that will be taken to meet the Government’s commitment to reach net zero greenhouse gas emissions by 2050. The carbon tax has an important role to play in this area, therefore the Government has no plans to postpone scheduled increases.
