Mr. Frank Maughan:

Before I begin, for the information of the committee, Mr. Regan and I are both attending to cover each of the proposals. I will aim to address any questions relating to the climate fund proposal and Mr. Regan will deal with any questions that arise relating to the extension of the EU ETS.

I will aim to address any questions in regard to the social climate fund proposal, and Mr. Regan will deal with any questions that arise in regard to extension of the EU ETS.

On the Chair's first question on whether it is, effectively, an either-or, the challenge that has been identified in the scrutiny note and again in the opening statement is that Government policy to date on the application of carbon tax in Ireland has been that it will not apply in the sectors which are covered by the EU ETS in Ireland. The EU ETS covers electricity generation and large industry, and the carbon tax is not levied in those sectors, but is levied in other sectors of the economy where fossil fuels are used. By extension of that policy, it would have implications for the future scope of the carbon tax. That is not necessarily to say it is automatic. This is a policy question and Government has not taken a policy position on it yet. It is to draw the attention of the committee to this issue which arises by virtue of the proposal to extend the ETS into the road transport and heating sectors where the carbon tax currently applies.

The second question relates to the operation of the ETS in the new sectors and I will pass over to Mr. Regan.