2026-02-24

145. Deputy Louis O'Hara asked the Minister for Climate, Energy and the Environment the way in which revenue from collection of the carbon tax is used to support his Department’s climate initiatives; and if he will make a statement on the matter. [14619/26]

I thank the Deputy for his question. The programme for Government commits to using the carbon tax as a key tool to encourage a shift away from fossil fuels and to invest in a sustainable future. There are three areas within my Department that received funding from carbon tax revenue in the most recent budget. First, in the residential and community retrofit area, the budget allocation for 2026 is a record €641 million, including €558 million from the carbon tax. This will support over 73,000 home energy upgrades, including solar PV. This target also includes 11,500 fully funded home energy upgrades under the warmer homes scheme for households at risk of energy poverty. A record €340 million budget has been provided for this scheme for 2026. There has been significant investment and year-on-year growth in home energy upgrades under the national retrofit plan. In the period from 2019 to the end of 2025, those schemes have provided almost €1.7 billion in support to homeowners for over 244,000 home energy improvements, including almost 32,700 fully funded upgrades for households at risk of energy poverty under the warmer homes scheme, as well as approximately 18,000 heat pump installations. By any fair estimation, that is serious progress. Importantly, within that, in respect of those retrofits that are made to households, you are looking at savings of up to €1,200 per annum on energy bills. That is significant. They are permanent savings. They are making homes warmer, safer, more affordable and healthier in reducing the emissions and energy use from homes. There are other schemes within the carbon tax, which I will come back to on the supplementary.

The recent carbon tax increases we have seen impact on the most vulnerable households. It hits them the hardest. As we know, households are facing rising costs across the board, particularly when it comes to filling the car with fuel and heating the home, yet the Government is set to plough ahead with these increases. They are scheduled until 2030 at least. Households are expected to take on this burden at a time when many households are struggling. The Minister says this is a tax that will contribute toward changing people's behaviour but the reality for the people I represent in rural Ireland, that is, people who have to drive their car to get from A to B, who do not have public transport they can rely on, who have to heat their homes and who do not have the alternatives, is that carbon tax is not going to change their behaviour. It is simply a tax that punishes them. While households face these increases, a report from the Comptroller and Auditor General found that just 61% of the carbon tax revenue could be verified as having been spent on the target schemes and programmes the Minister has mentioned. While the Government is making great announcements that the carbon tax revenue is ring-fenced and focused on these initiatives, this report demonstrates that the ring-fencing is not actually happening and that it is being treated the same as general taxation. Why are people being misled on this?

We will agree to disagree because the carbon tax is ring-fenced and is due to bring permanent savings to households and to families. I have given the Deputy real, verified figures in relation to the number of homes. A total of 244,000 homes in this country have been retrofitted with the support of the grants, which I have just changed again to make them more accessible, particularly to middle-income families, by bringing forward a retrofitting passport. These include windows and doors grants, attic insulation grants and wall cavity grants. People do not have to go for the full deep retrofit and can access them. These measures bring about savings. People speak with their applications, that is, the tens of thousands of applications that we are receiving for these grants and the incredible interest in the new grant scheme that I have brought forward. I ask the Deputy not to lose sight of the fact that nearly 33,000 homes at risk of energy poverty or in energy poverty have been fully retrofitted with 100% grant aid through the carbon tax and the climate action fund. They are permanent savings for those low-income households. I will turn to social housing and what we have been able to do there as well.

The whole argument the Government uses to justify the increases in this tax is that the increasing receipts are spent on climate initiatives. The Minister can say that it is ring-fenced, but this report has said that the reality is that 40% of the revenue is not being directed toward the intended measures. I outlined to the Minister the pressures that carbon tax increases are placing on households and that people do not have the alternatives. I do not know how the Minister can justify further increases when he is not actually spending the money on the measures that the Government should be funding. In fact, many of his Government colleagues from the regional Independents, when they were in opposition, spoke very strongly against carbon tax increases and the impact they would have on rural Ireland but obviously, ministerial jobs have changed their mind. Taxpayers need to have confidence in how a Government is spending their money. It should be spent in a way that has been promised by the Government. This report states that it is not. Most of all, the Government needs to stop fleecing ordinary households, who are up to their eyes with rising costs. Many households are in arrears on the likes of their energy bills and so on and this is just adding to that again. The Minister needs to recognise that as well.

We are targeting about 73,000 retrofits this year. That will bring our overall retrofit figure to well over 300,000. We are targeting 500,000 homes by the end of the decade. These are bringing about permanent changes for people. When we talk about energy prices - and I have already said this in response to Government and Opposition Deputies - we still have an issue, like many European countries, in relation to energy prices. We need to reduce them further. How are we going to do that? We are going to do that expanding renewables. We are doing well on renewables in solar and in wind. It will also be done on delivering on infrastructure that will bring about those savings, such as the North-South interconnector, which is a critical piece of infrastructure in this country that the Deputy's party is for in the North of Ireland and is against, apparently, in the Republic of Ireland. I am not sure. I asked Deputy Daly what the situation was there. This will deliver savings of over €100 per annum permanently for households and improve the grid resilience for all 32 counties in Ireland on an all-island and all-Ireland basis. I would have thought projects like that would have received the support of the Sinn Féin party. Apparently in the North they are supportive, and in the South, they are not.

It would be fair to say that, at times, that the Minister's own party was not necessarily supportive of that particular project.

We fully support it now.

In fairness to the people, what they want they want to see is a review and obviously, in the long term, undergrounding. Sinn Féin will not be very different North or South.