Paschal Donohoe (Dublin Central, Fine Gael)

I emphasise to Deputy Farrell that the higher the business mileage, the lower the rate of BIK. That is the way aim to deal with the point she referred to. For a car in category A doing under 26,000 km, it is 22.5%. If the same vehicle is used to deliver over 48,000 km, the BIK rate falls to 9%. That is the way the tax code aims to deal with the issue she referred to.

Deputy Doherty asked if this change would have an effect on the costs involved in using a carbon-neutral vehicle. The answer to that question is "Yes", because the OMV is coming down. On the other hand, we are bringing in a new rate of BIK, the A1 rate, which, over time and after this OMV issue has been phased out, will result in a more attractive tax code for the use of carbon-neutral vehicles.

I do not deny for a moment that the implementation of this will create a cost for people who are using these cars. I accept that it will. However, while Deputy Doherty's proposal would just defer what we are doing, this is the second year in which we have looked to defer it. I am not looking to remove the €10,000 in a single go. I am extending it for a further year and phasing it out over time. We run the real risk that if we do not eventually make a decision like this, the difficulty of getting anywhere close to our EV targets will only continue to grow. From the analysis that has been done, we know that one of the areas in our economy in which we are furthest from where we need to be in emissions reductions is that relating to private transport. I accept that there are difficulties and trade-offs involved. That is why we are looking to phase it out over a number of years and why I believe the approach that we have taken in this Bill is the appropriate one.