Budget will not include carbon tax reforms, minister says

The environment minister said it helps continue the electrification of the country and reduces Ireland’s reliance on fossil fuels

Darragh O’Brien said the carbon tax remains a 'critical funder' of retrofitting for both homes and businesses. File picture

There will be no reforms to the carbon tax in October despite the deferral of an increase until the budget, the environment minister has said. Darragh O’Brien said the tax remains a “critical funder” of retrofitting for both homes and businesses.

“They are permanent measures that can be brought forward by way of grant aid to reduce household costs and business costs on a permanent basis to protect us against future shocks and future crises,” Mr O’Brien said.

He added it helps continue the electrification of the country and reduces Ireland’s reliance on fossil fuels. 

Mr O'Brien said the carbon tax is critically important and must and will remain in place. He said most of the Oireachtas agreed with the imposition of a carbon tax, except for Sinn Féin.

“This year, we’re going to spend about €640m on retrofitting. Not an insignificant amount, about 73,000 homes we’re targeting this year.”

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Pressed further about whether there would be any reforms to the tax, Mr O’Brien said: “No.”

Mr O’Brien’s comments come just weeks after the Government confirmed a planned increase in the carbon tax would not go ahead until October’s budget, brought about amid the war in Iran and pressure from protest groups.

The environment minister said the deferral was an acknowledgement of the “cost pressures that people are under right now”.

He said the funds available for retrofit and other programmes funded by carbon tax are in “good shape” and there would not be any cuts to them this year or in 2027.

“Its simply a deferral of an increase in the carbon tax, recognising the pressure that businesses and households are under right now,” Mr O’Brien said.

He was speaking as he and agriculture minister Martin Heydon announced new supports for the farming, haulage and public transport sectors to deal with increased fuel prices.

The two schemes will provide relief to businesses who use significant amounts of diesel, like hauliers and farmers.

• Tadgh McNally is a political reporter for the Irish Examiner