Dáil Éireann Debate, Tuesday - 8 September 2020
292. Deputy Darren O'Rourke asked the Minister for Finance the estimated amount the carbon tax will raise in view of the proposed increases in the carbon tax as outlined in the programme for Government in each of the years 2021 to 2025; and if he will make a statement on the matter. [21931/20]
Amharc ar fhreagra297. Deputy Darren O'Rourke asked the Minister for Finance the amount extra an increase of €7.50 per tonne in the carbon tax, as outlined in the programme for Government will raise in 2021; and if he will make a statement on the matter. [22078/20]
Amharc ar fhreagraI propose to take Questions Nos. 292 and 297 together.
The Programme for Government sets out increases in the carbon tax rate from 2021 to 2030, to reach €100 per tonne CO2 by 2030. This is to be achieved by an annual increase of €7.50 per tonne CO2 in each year from 2021 to 2029 and an increase of €6.50 per tonne CO2 in 2030. The practice to date has been to increase carbon tax rates on auto fuels on budget night but to delay commencement of the increase to other fuels until 1 May in the following year.
Based on the Programme for Government commitments, the estimated carbon tax receipts for the period 2021 to 2025 is set out in the following table:
|
Carbon Tax |
2021 |
2022 |
2023 |
2024 |
2025 |
|
Estimated Gross Receipts (€ millions) |
666 |
823 |
981 |
1,138 |
1,296 |
These estimates are based on the assumption that demand for fuels on which the carbon tax is levied remains constant at 2019 levels. As such the carbon tax base in 2019 was some 21 million tonnes of CO2 emitted from the combustion of fuels subject to the carbon tax. These estimates are adjusted for additional receipts that will accrue from applying carbon tax increases to auto fuels on budget night and reduced receipts that will arise from the delayed commencement of carbon tax increases to other fuels until 1 May in the following year.
Based on 2019 volume levels and adjusting for both the early and late commencement for certain types of fuels, an increase of €7.50 in carbon tax generates an estimated €120m in 2021.
