Simon Harris (Wicklow, Fine Gael) | Oireachtas source

Financial Resolution No. 2 provides for an increase in the carbon charge component of mineral oil tax on petrol and auto diesel, with effect from 12 midnight tonight. The increase amounts to €6 per tonne of carbon dioxide emissions. Assuming the full increase is passed through to the final retail price, this will result in a VAT inclusive increase of €0.017 on the price of 1l of petrol and €0.020 on the price of 1l of auto diesel. Carbon tax was introduced on a phased basis in 2009, which is important to state. Since its introduction, carbon tax receipts have grown, broadly mirroring the overall economic recovery in Ireland. In order to meet climate change targets, there have been calls for a long-term strategy to increase the carbon tax rate to €80 per tonne of CO2 by 2030. The current rate of €20 has been place since 2012. There is a commitment in the climate action plan to increase the carbon tax to at least €80 per tonne by 2030 and carry out a full assessment of the trajectory of increases over successive annual budgets.

The Joint Committee on Climate Action recommended this approach, subject to the examination of the social and economic impact of rate changes. Setting a long-term trajectory of price increments sends a clear price signal to consumers and production sectors. It will establish a time period for gradual investment in energy efficient measures. With regard to revenue raising, it is estimated that the increase in the carbon tax will contribute €90 million in 2020 and €130 million in a full year.

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