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Dáil Éireann Debate, Tuesday - 12 July 2022

Tuesday, 12 July 2022

Questions (337)

Matt Carthy

Question:

337. Deputy Matt Carthy asked the Minister for Public Expenditure and Reform the schemes, areas and projects to which funds raised through the carbon tax have been allocated by year to date in tabular form; and if he will make a statement on the matter. [37944/22]

View answer

Written answers

The Programme for Government commits to hypothecating all additional carbon tax receipts over 2021-2030 (estimated at €9.5bn) in order to:

- Ensure that the increases in the carbon tax are progressive by spending €3 billion on targeted social welfare and other initiatives to prevent fuel poverty and ensure a just transition;

- Provide €5 billion to part fund a socially progressive national retrofitting programme; and

- Allocate €1.5bn of additional funding to encourage and incentivise farmers to farm in a greener and more sustainable way.

Each year, alongside the Budget, my Department issues a publication on the use of carbon tax funds for the forthcoming year. This paper details the specific allocation of carbon tax funds in line with the Programme for Government commitments and provides some detail on the programme areas that will receive additional funding.

In 2022, the carbon tax revenue available for investment is €412m. This is comprised of the revenue made available in 2021 (€148m) and 2020 (€90m) and an additional €174m in 2022.

€202 million of this additional carbon tax revenue has been allocated to residential and community energy efficiency in 2022. This funding has permitted the launch of a range of new and expanded supports for energy efficiency, including 80% grants for attic and cavity wall insulation and grant support of up to 50% for deep efficiency measures. More than half of these funds are also being used to provide free of charge energy efficiency upgrades to households in, or at risk of, energy poverty.

A further €174m of carbon tax revenues in 2022 are being spent on targeted social protection measures, such as increases in the fuel allowance, the living alone allowance, and the qualified child payment. Analysis has demonstrated that this allocation to compensatory welfare measures means that the net impact of the carbon tax is progressive in 2022. Households in the bottom four income deciles will see all of the cost of the carbon tax increase offset. Households in the bottom three deciles are better off as a result of the carbon increase and the compensatory welfare measures.

The remaining revenues (€36m) were allocated to fund the continuation of the 2020 and 2021 Carbon Tax Investment Programme. The specific programme allocations are detailed on the Department's website and include support for the Just Transition Fund, peatlands rehabilitation, the Greenway and Urban Cycling programmes, grants for Electric Vehicle purchase and infrastructure, green agricultural pilot schemes and a contribution to the 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.

A table with the breakdown of the allocation of carbon tax revenues to date is presented below:

Programme/Scheme

Department

€ m-2020

€ m-2021

€ m-2022

1. Investment in Residential Energy Efficiency & Community Energy Efficiency

DECC

13

113

202

2. Targeted Social Protection Interventions

DSP

21

69

174

3. Continuation of 2020 & 2021 Carbon Tax Investment Programmes in Other Depts

Various

56

56

36

Total

90

238

412

Full details on the allocation of carbon tax revenues are available in the Departmental paper "The Use of Carbon Tax Funds 2022", available at - assets.gov.ie/201264/5c96e5cd-b663-4887-bf2e-e13a393ffc50.pdf

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