Denis Naughten (Roscommon-Galway, Independent) | Oireachtas source

Our amendments Nos. 73 and 75 relate specifically to the application of carbon tax to agricultural diesel. We had a very detailed discussion on Committee Stage regarding the broad thrust of carbon taxes. However, in the case of the agricultural sector, there is no alternative available because farmers in Ireland do not have electric tractors. The whole objective behind carbon taxes is to get people to move to sustainable alternatives. It is not about bringing in additional income but, rather, getting people to migrate to more sustainable forms of transport. In the agricultural sector, people do not have such alternatives.

Farmers are going to face a bill of an extra €27 million in 2021 as a result of the carbon taxes that have been introduced. As I said, they face those taxes in a situation where they do not have alternative options. While we can argue over the mechanism of levying carbon taxes on the rest of the population, there is absolutely no justification whatsoever for imposing carbon taxes on agricultural diesel when there is no alternative. It is disproportionately impacting on rural Ireland and the agricultural sector. Brexit is coming down the road in the next couple of weeks and there is huge pressure on the beef sector. These carbon taxes will add to that pressure. It makes no sense to introduce this particular levy given the current situation in which our agriculture sector finds itself.

As I have said to the Minister before, the way these taxes are structured is regressive in that they are disproportionately penalising rural Ireland, where alternatives are not available, and not taxing urban Ireland enough to motivate people to get out of their cars and onto public transport. A total of 37% of our population, or nearly four in ten people, live in isolated rural communities throughout the country. They do not have alternative modes of transport available to them and, as such, they have no choice but to use their car. I expect the Minister will respond that farmers can use the taxation code to avail of refunds and rebates in respect of carbon taxes. However, that option only arises if one is liable to pay tax in the first place. As we know from the annual Teagasc farm surveys of farm incomes and the huge downward financial pressures being put on farm incomes, many farmers do not have a taxable income.

Looking at the broader issue of carbon taxes, I have pointed out to the Minister before that, based on the structure that is currently in place, half of households in Dublin will pay less than €9.11 a week in transport costs, when the Dublin Bus subsidy is taken into account, at the point where carbon taxes reach €100 per tonne. On the other hand, rural commuters, who cannot avail of alternative transport options, will pay €39.50 a week. In other words, rural people will pay four times more than the Dublin resident who has a bus running by his or her door every five minutes. The way the charges are structured is unfair. The carbon tax is a regressive tax when it comes to rural Ireland.

As Minister with responsibility for energy matters, I put alternative proposals for the structuring of carbon taxes to the Minister for Finance. As a backbench Deputy, I submitted a proposal to the climate action committee. In our pre-budget submission, I again made the alternative argument to the Minister that we should introduce a system that is based on the actual emissions from vehicles, which would see people paying more when their car is sitting in congestion. In his response to me on Committee Stage of this Bill, the Minister said that something along these lines could be introduced over the longer term, which might involve altering emissions-testing procedures at national car test centres to read the emissions profile of a vehicle over the period of, say, three months prior to its being brought in for the NCT. This is the type of innovative change that is needed. It is the type of innovative change that will motivate people out of their cars and onto public transport where it is available to them.

We have seen in the past that motor tax has been a far more effective tool than carbon taxes in addressing the environmental issues associated with the use of motor vehicles. Small incremental taxes do not make people change their behaviour. The motor taxation changes in respect of diesel led people to change their behaviour in the past and the same approach can work again in the future, if taxes are restructured in a way that penalises the owners of vehicles who drive on congested streets and sit in traffic in congested towns on a regular basis, rather than those who are commuting long distances and do not have alternatives available to them. I ask the Minister to think again in regard to how we structure carbon taxes. In regard to the agricultural sector, I plead with him to exempt agricultural fuel from the carbon tax in a context where farmers do not have electric tractors.

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