Dáil Éireann Debate, Thursday - 9 October 2025
167. Deputy Ken O'Flynn asked the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation whether revenue from increased carbon-related motor fuel taxes will be directed towards electric vehicle infrastructure, public transport subsidies, or home energy grants; and if he will make a statement on the matter. [54493/25]
Amharc ar fhreagraIn Budget 2026, as per Sections 27, 28 & 29 of the Finance Act 2020, the carbon tax increased by €7.50 per tonne, as part of a schedule of increases to €100 per tonne in 2030. These increases are phased, with auto fuel changes being introduced annually in October, and changes for all other fuels the following May to allow for a lower rate on home heating fuels during the winter heating season.
The Programme for Government commits to maintaining the planned schedule of annual increases in the carbon tax to 2030 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.
On this basis, in Budget 2026 a total of €1,114 million of carbon tax revenue is being allocated to climate measures and to ensure the most vulnerable are protected from unintended impacts of the tax increase. This is an additional €163 million on the amount allocated in Budget 2025. The measures funded, relevant Departments, and the allocation for each is outlined below.
|
Departments |
Measures Funded |
2026 Total Allocation (€) |
2026 Additional (€) |
2025 Total Allocation (€) |
|
DCEE |
Residential & Community Energy Efficiency ODA - Green Climate Fund Just Transition Fund |
566 |
+89 |
477 |
|
DSP |
Targeted Social Protection Interventions |
350 |
+44 |
306 |
|
DAFM |
Incentivising Green and Sustainable Farming Green Agricultural Pilots |
173 |
+30 |
143 |
|
D/Transport |
Greenways/ Urban Cycling EV Charging infrastructure Providing Grants for EVs |
20 |
- |
20 |
|
DHLGH |
Peatlands Rehabilitation |
5 |
- |
5 |
|
Total |
|
1,114 |
+163 |
951 |
The Budget 2026 carbon tax allocation includes €558 million for Sustainable Energy Authority of Ireland residential and community energy upgrades, including the Solar PV (photovoltaic) Scheme. This is an €89 million increase on last year.
The Budget 2026 carbon tax allocation also allocates €20 million to the Department of Transport to continue funding sustainable transport measures that have received carbon tax funding since Budget 2020. This allocation is comprised of:
· €9 million to greenways and urban cycling
· €8 million to providing grants for electric vehicles
· €3 million to investment in electric vehicle charging infrastructure
My Department issues an annual publication on Budget Day titled The Use of Carbon Tax Funds, which contains further detail on these allocations, and includes information on the programmes funded from these amounts. All previous versions of this report are available on my Department's website.
