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Editor's Pick Ireland: Government’s €6 hike in carbon tax sees a mixed response

Cat  Sturman Cat Sturman Writer
3rd December 2019

This article was originally published on 12 November 2019 in Energy Spectrum Ireland

Minister for Communications, Climate Action and Environment Richard Bruton and Minister of State Sean Canney have unveiled the details of Budget 2020. Issued on 8 October, the budget highlights the government’s decision to raise the price of carbon to €80 per tonne by 2030, which will be ring-fenced in order to raise more than €6bn in the next decade.

The move will see up to €90mn raised and ring-fenced to ensure those who are susceptible to higher fuel and energy costs are supported and will enable a just transition and unlock investment in further climate action.

“Bold decisions are needed on our investment priorities but also on taxation and regulation. Carbon pricing is part of this,” confirmed Minister for Finance and Public Expenditure and Reform Paschal Donohoe T.D. "The Climate Change Advisory Council have said that increasing the price of carbon is essential if we are to hit our climate targets. We must scale up our production of renewables, increase the level of retrofitting, electrify transport and introduce changes to make our land use more sustainable,” added Minister Bruton. Figure 1 showcases how the rise in the Carbon Price will underpin key areas in Ireland’s transition.

Ireland’s 2020 Budget has also advocated for a new scheme to enable a 60% rise in renewables and €36mn towards electric vehicles. To protect homeowners, €20mn will be put aside to develop a new model for housing upgrades, as well as a total of €52.8mn to retrofit homes for those living in or at risk of energy poverty. Additionally, €22mn will also be utilised to develop a new energy efficiency scheme to upkeep social housing stock.

However, in response to the news, Climate Change Advisory Council Chairman Professor John FitzGerald stated that a €6 hike in the carbon tax will not guarantee that Ireland will be able to reduce its carbon emissions at the required rate. Green Party leader Eamon Ryan also stated that Ireland will not “move the dial on climate breakdown unless there are major changes to transport systems and a sustained investment in making homes and buildings warmer and energy efficient.” Director of Friends of the Earth Oisin Coghlan also commented that “carbon tax is just one small piece of the climate action jigsaw,” and “the government needs to do more work to paint the big picture of a Just Transition to zero pollution.”

Budget 2020 provides a significant focus on Ireland’s energy targets. Whilst Ireland remains focused on its decarbonisation goals, its mixed response highlights a need for an increased collaborative approach from business and industry to prove successful.

DCCAE   Green Party – carbon tax   FOE Government – Budget 2020 statement Government - Speech

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The Energy Spectrum Ireland (ES) service captures key developments across the energy sector and offers a timely, insight-driven overview of the need-to-know news and changes in the industry. The service comprises of two publications: Energy Spectrum Ireland, published monthly, and Ireland Energy Weekly Bulletin. 

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