Gormley confirms carbon levy to increase over next few years

THE carbon levy on petrol, diesel and home heating fuels will be steadily increased in the years ahead, putting greater pressure on people’s pockets.

Environment Minister John Gormley confirmed that the levy introduced in Wednesday’s budget would “increase progressively” over time.

The levy, charged at a rate of €15 per tonne of carbon, took effect from midnight on Wednesday for petrol and diesel.

It means people are now paying circa €2 more at the pumps to fill up a 50-litre car.

Increases to home heating oils and gas will apply from next May.

Mr Gormley said he expected the levy to increase in line with the cost of carbon on the EU Emissions Trading Scheme.

This was a reference to the price that member states pay to buy carbon allowances in order to meet their emissions targets.

“It [the carbon tax] will increase progressively and it probably will increase in line with the ETS – that’s the price that we pay for carbon on the emission trading scheme,” Mr Gormley said.

“At the moment, that’s around €14 per tonne. That’s why we’ve put it [the tax] at around €15.”

Mr Gormley was speaking at a press conference to discuss this year’s Carbon Budget, which he announced in the Dáil yesterday.

The two main elements of the document were the carbon levy and the commitment to introduce new “overarching” climate change legislation next year.

Mr Gormley said the rationale of the carbon tax was “to change the relative price of fuels based on CO2 emissions in order to change consumption patterns, encourage fuel efficiency and lead to an improvement in environment quality”. He said the climate change bill would:

Enshrine in law key policies and principles to drive the country’s climate change agenda.

Set ambitious statutory targets including an 80% reduction on 1990 levels of greenhouse gas emissions by 2050.

Establish a new Office of Climate Change to be located in the Environmental Protection Agency.

The Environmental Pillar, a network of environmental groups, welcomed the carbon levy, and said it was essential to initiate “more stringent ‘polluter pays’ policies across the whole economy”.

But the Labour Party accused Mr Gormley of “bottling it” on the proposed climate change legislation.

Labour environment spokeswoman Liz McManus said the bill was simply offering more of the same, and that a new type of governance was needed to drive the issue forward.

“Under the all-party report on climate change law, we proposed that the Taoiseach would take overall responsibility for the climate change project,” said Ms McManus.

“The reality is that unless there is absolute unity of purpose across Government departments, we are not going to reach the goal of a low-carbon economy.”


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