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Dáil Éireann Debate, Tuesday - 26 April 2022

Tuesday, 26 April 2022

Questions (477, 503, 506)

Eoin Ó Broin

Question:

477. Deputy Eoin Ó Broin asked the Minister for Finance the total amount of revenue raised via the carbon tax in each year from 2016 to 2021 and to date in 2022; and the breakdown of the areas in which the tax revenue was spent on via voted expenditure in each of the years in question. [19465/22]

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Pearse Doherty

Question:

503. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue to be raised in 2022 by the scheduled increase in carbon tax on 12 October 2022. [20196/22]

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Pearse Doherty

Question:

506. Deputy Pearse Doherty asked the Minister for Finance the revenue raised from carbon taxation to date in 2022 disaggregated by the carbon tax increase of 12 October 2022, the carbon tax increase of 1 May 2022 and all other revenue for 2022, respectively. [20205/22]

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Written answers

I propose to take Questions Nos. 477, 503 and 506 together.

Carbon Tax receipts by commodity for the years 2010 to 2020 are published on the Revenue website at the following link: www.revenue.ie/en/corporate/information-about-revenue/statistics/excise/receipts-volume-and-price/excise-receipts-commodity.aspx. I am advised by Revenue that the provisional amounts raised through the Carbon Tax in 2021 and to the end of March 2022 are €652 million and €197 million respectively.

Budget 2022 forecast that the increase in the Carbon Tax rate from €33.50 to €41.00 per tonne of carbon dioxide emitted (from Budget night for auto fuels and from 1 May 2022 for all other fuels) would yield €109 million in the first year and €148 million in a full year. The rate change effective from 12 October 2021 has contributed around €19 million of the €197 million collected to end March 2022.

Given the high uncertainty surrounding the price of motor fuels and the impact this may have on consumption, it is not possible to determine, with a high level of certainty the revenue that the carbon tax increase in October may yield in 2022.  Based on the most recent available data from October 2021 to December 2021 the €7.50 increase in carbon tax applied on the 13th October accounted for an additional €17.7m in carbon tax and an estimated €1.7m in VAT . Of which €12m was collected in 2021 with the remaining been collected in January 2022.

A decision was taken in Budget 2020 to ring-fence any additional revenues raised by the increase in carbon tax to be used to protect those most vulnerable to higher fuel and energy costs, to support a just transition for displaced workers and to invest in new climate action.

Following this, the Programme for Government committed to hypothecating all the additional carbon tax receipts over the 2021-2030 period (estimated at €9.5bn), with €3bn to be allocated to targeted social welfare and other initiatives to ensure a Just Transition, €5 billion to be allocated to energy efficiency, and the remaining €1.5bn to be allocated to green agricultural measures.

In 2022, the revenue available for investment is €412m. This is comprised of the revenue made available in 2021 (€148m) and 2020 (€90m) and the allocation of an additional €174m to meet the Programme for Government commitment to spend €9.5bn by 2030.

Out of the €740m of additional carbon tax receipts that has been allocated since the hypothecation process began in Budget 2020, approximately 47% (€348m) has been allocated to energy efficiency measures, which includes Energy Poverty Efficiency Upgrades and the 2020 Aggregated Housing Upgrade Scheme. Approximately 36% (€264m) has been allocated to targeted social welfare supports, including the fuel allowance.

Allocations of €15m (2%) were made to peatlands rehabilitation and €18m (2%) was allocated to a Just Transition Fund to support impacted communities. A further €27m (4%) has been allocated to Greenway and Urban Cycling programmes over the 3 years, while €24m (3%) and €9m (1%) have been allocated for grants for Electric Vehicle purchase and Electric Charging infrastructure respectively.

In addition, €29m (4%) has been allocated to green agricultural pilot schemes and €6m (1%) was allocated to an Overseas Development Aid Green Climate Fund, which provides financial support to reduce greenhouse gas emissions in developing countries and to help vulnerable societies adapt to the unavoidable impacts of climate change.

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