Mairead Farrell (Galway West, Sinn Fein) | Oireachtas source

The amendment relates to climate action and energy security. It calls on the Department to carry out research into the total amount of capital allowances that a company has used against data centre investments to reduce their tax liabilities. This would be interesting. Under current law, companies may claim capital allowances against money invested in data centres to reduce or completely shelter their tax liability at a time when the security of supply of electricity for consumers is under threat. It is clear that the proliferation of data centres in recent years poses a serious threat to the security of our electricity supply. The regulator has warned that consumers face rolling blackouts without intervention. EirGrid has predicted that data centres will account for between a quarter and a third of all electricity demand by 2030 and the increase in data centre demand for energy over the past four years is equivalent to 140,000 household connections each year. The challenges faced by the system does have consequences for households and consumers, both in terms of energy security and rising costs.

Despite these risks, companies are offered lucrative tax incentives by the Government to invest in data centres here, spurring data centre proliferation and depriving the Exchequer of much needed revenue. It is estimated that between 60% and 80% of all data centre expenditure qualifies for capital allowances and they can be used by companies against money spent on data equipment, installations and infrastructure in order to reduce or completely shelter their tax liabilities. Given the threat posed by data centre demand, the tax incentives offered to companies to invest in them should be subject to greater scrutiny. We can and should use the tax code to ensure that our energy system is secure and, where possible, amend it to encourage facilities such as data centres to source their energy in a way that is sustainable, climate neutral and protects our energy security. The Minister and his officials should undertake an immediate review of the current tax relief in place for data centres, in terms of how much it has cost the State in the past and how much it could potentially cost in the future. That is a reasonable ask.