2026-04-16

84. Deputy Ciarán Ahern asked the Minister for Climate, Energy and the Environment in light of the recently announced suspension of the carbon tax increase, the way in which he plans to make up the shortfall in funding allocated in budget 2026 to the SEAI for home energy upgrade schemes, and to just transition; and if he will make a statement on the matter. [27884/26]

I thank the Deputy for this timely question. The allocation of the carbon tax is a matter for the Minister for public expenditure and reform, who took questions just before this. There has been no change because of the pause in the increase in the allocation for 2026. That was published as part of the Revised Estimates Volume, REV, last December and approved by the Dáil on 26 March 2026. Within my Department's 2026 allocation, there are three areas that received funding from the carbon tax. First, in the residential community retrofit programme, the budget allocation is a record €641 million this year, including €558 million from the carbon tax. We are planning for this to support the home energy upgrades of 73,000 homes this year, including solar PV. The target includes 11,500 fully funded home energy upgrades under the warmer homes scheme, which we discussed yesterday at some length, for households at risk of energy poverty. A record of over €340 million of the budget has been provided for this year. There has been a significant investment and year-on-year growth in home energy upgrades. From 2019 to December 2025, about €1.7 billion was provided in support for homeowners. We have done about 244,000 homes under that, including almost 33,000 fully funded upgrades, particularly focusing on homes at risk of energy poverty through the warmer homes scheme. To answer the Deputy's question directly, the budget and allocation this year is not affected by not increasing the carbon tax this year. I will come back in on a couple of other areas that we are funding, such as the just transition fund and the green climate fund.

There were any number of interventions that we felt that the Government could have made to alleviate and reduce the cost of fuel for hauliers, farmers and everyone else. It is very disappointing that the one climate-friendly measure here has been undermined, and that the Government has chosen to jettison this over other subsidies, direct payments and excise cuts. These are all measures that we want to support. Our fear here is that the Government has deferred this amount and it was scheduled to come on in May because, as it was put in the budget, the increase on home heating fuels will take place in May, after the winter heating season. It has now been deferred to the winter. The fear is over whether it will be deferred again. Is it realistic to think that the Government is going to implement it in October as people are filling up their tanks again?

It is a good question. What we have tried to do regarding the support package of about €750 million is to make sure that it is balanced and targeted. We have done decreases in excise duty. We have also brought forward specific schemes of support for vital sectors. For example, the haulage sector has been provided €40 million per month for three months in targeted payments and there is €100 million for the agriculture scheme. That is to help with the fuel price spikes and increases we have seen because of the outbreak of the war in the Middle East. Specifically on the Deputy's question, I will defend the carbon tax. To be fair to the Deputy, colleagues in the Labour Party and other parties in the Opposition, with the exception of the main Opposition party, support the carbon tax because it brings forward specific ring-fenced funding in order that we can protect households and businesses against future shocks. This is a deferral of this increase. That is all it is. We will target resources in specific areas, reduce costs and certainly ensure there are no further increased costs because of Government tax in the middle of this year.

It is a central plank of addressing climate change in this country. It is a crucial funding source if we are ever going to move away from our dependence on fossil fuels. I take the point that it is for the Department of Social Protection but the Minister was not able to give me any figures for how much this deferral will cost. I would appreciate if the Minister's Department or the Department of Social Protection could get back to me on exactly how much it will cost. On an ongoing basis, will this be made up from general taxation? Are we giving up on the polluter-pays principle or is the Minister determined to ensure the carbon tax increases that have been legislated for will happen?

This is not a cancellation of an increase; it is a deferral. The cost is approximately €22 million in paused tax receipts. To put that in context, the overall investment from 2019 to now is over €2 billion. Our budget for this year, I assure the Deputy, is unaffected. We have also changed the retrofitting grants for households and seen a significant uptick in applications there. We want to bring forward a retrofit passport to make it more accessible, particularly to middle-income earners. We are seeing a significant increase in applications for heat pumps because we upped that grant to €12,500 - the cavity wall grants as well. We had a good debate on solar yesterday. The Social Democrats brought forward some ideas around that. I want to accelerate solar further. We did 33,000 solar installations last year and can do more this year. We want to target those who are at energy security risk or energy poverty risk. We will protect the carbon tax because it is a clear mechanism for us to be able to protect households and businesses into the future.