Alice-Mary Higgins (Independent) | Oireachtas source

I move recommendation No. 8:

In page 25, between lines 35 and 36, to insert the following:

“Report on Diesel and Kerosene Subsidies

23.The Minister shall within 6 months of the passing of this Act publishing a report outlining the amount of fossil fuel subsidies provided by the State, including subsidies through tax relief or revenue forgone, in respect of (a) Diesel for Agricultural vehicles

(b) Diesel for HGVs and other Haulage Vehicles

(c) Jet Kerosene.”.

This recommendation asks the Minister to produce a report on diesel and kerosene subsidies. We passed climate action legislation and we know the issue of fossil fuel subsidies has been highlighted internationally as a core concern. We seek to meet our climate targets. The Minister has spoken about the urgency of climate change and the centrality of the challenge which we face. I have supported the increase in carbon pricing. I do not believe that the basis for it should be any lifestyle measure and I do not think that would be appropriate. It is the Pigouvian principle, where costs have been externalised and the social, environmental and other costs have been carried by society. Those costs should be internalised and reflected within the cost of the fuel. We know the extraordinary costs of fossil fuels. When it is approached in that way, it is not a matter of rewarding or punishing. Our goal should and must be to protect those who are most vulnerable and most impacted. I am not addressing that issue here but wanted to provide it as context. This is consistent with that position. Even for those who do not support a carbon tax, I believe that these measures are appropriate.

Carbon pricing has gone up at a household level. We know that fuel costs are a key issue at a household level. More will be needed to address fuel and heat poverty going into this winter. The fossil fuel subsidies that we are making, however, are largely in commercial areas. That is where the greatest amount of our revenue forgone, tax subsidisation and absorption of externalised costs from the fossil fuel industry can be found. I have figures from the Central Statistics Office, CSO, from 2019. I would of course appreciate if I could access later figures but those are the latest figures I have. The CSO figures show that indirect subsidies from revenue forgone due to tax abatements on fossil fuels accounted for nearly 90% of a €2.4 billion total. The single largest area of revenue forgone, through tax subsidisation, is jet kerosene used for domestic, international and commercial aviation.The revenue forgone from this measure in 2019 was €634 million. Revenue was also forgone through lower excise duty on diesel fuel. This was estimated at €400 million. There have been several calls over many years for this measure to be removed, not simply because of the costs in terms of emissions through diesel fuel which we are absorbing, but also because of the additional social costs carried by our health budgets and the nitrous oxide and particulates emanating from diesel fumes, both of which have been shown to be linked to premature death and strokes.

We are subsidising diesel and jet kerosene by extraordinarily large amounts even as we are telling everybody to do better at turning off lights, which is using fuel carefully, and taking all these household measures. We need to be clear and consistent. If we are telling people that we are in a point of transition and they need to change how they live and use fuel and to address those issues, we also need to be consistent and ensure we are not subsidising industry to a very large degree and subsidising jet kerosene. This is not necessarily always jet kerosene. We have a large private aeroplane leasing industry and there is a subsidisation issue there.

I have seen the recent protests and it seems to be a bit unclear who is leading them. A group has magically appeared, yet it is not the Irish Road Haulage Association. I know the pay and conditions of many who work in road haulage are a concern. That is the issue that needs to be addressed. I know there was extensive lobbying by the Irish Road Haulage Association. At one point, there was an invitation to patrons across the Oireachtas to attend an event. There was lower excise duty on diesel fuel in budget 2020. I hope the protest is a signal that the Minister is planning to address this subsidisation and remove it. Perhaps he might clarify that. I hope this is a last-ditch attempt to stop the Minister doing the right thing in this area.