Energy Policy

Dáil Éireann Debate, Wednesday - 27 September 2023

Wednesday, 27 September 2023

Questions (45)

Ged Nash

Question:

45. Deputy Ged Nash asked the Minister for the Environment, Climate and Communications the projected yield respectively in 2022 and 2023 from the temporary solidarity contribution on fossil fuel production and oil refining sectors; if he will outline the formula applied for determining the amount; what the projected estimates provided to him by officials in his Department for the amount to be raised were; when the last estimate was made; what the additional revenue would be if extended to end of 2023 and 2024 respectively; and if he will make a statement on the matter. [41837/23]

Written answers

Minister for the Environment, Climate and Communications

On 17 July 2023, the Energy (Windfall Gains in the Energy Sector) (Temporary Solidarity Contribution) Act 2023 passed through the Houses of the Oireachtas and was signed into law by the President. In accordance with Council Regulation 2022/1854, the Act introduces a temporary solidarity contribution to fossil fuel companies on earned unexpected surplus profits (“windfall gains”) for the years 2022 and 2023. 

Estimates on expected revenues from the temporary solidarity contribution for both years were made in Q4 2022 and ranged from €200m to €450m. However, due to the high level of volatility in gas prices due to the ongoing conflict in Ukraine, these estimates are subject to a large degree of uncertainty.  The financial model applies low, baseline, and high price estimates, which are then adjusted for hedging assumptions on market prices. It also includes cost assumptions from industry as well as assumptions on potential gas production volumes in Ireland.  

In accordance with Article 18 of Council Regulation 2022/1854, the temporary solidarity contribution is a temporary measure and is to apply only to fiscal years 2022 and 2023. Therefore, there is no legal basis for it to be continued in Ireland to 2024.