Tommy Broughan (Dublin North East, Labour)
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58. To ask the Minister for Finance if he will consider holding a full evaluation of the benefits and drawbacks of implementing the next phase of the carbon tax in 2014; if he will consider a deferral of the next phase of implementation until a thorough examination of the implications and scope of the next phase of implementation has taken place. [52296/13]

Michael Noonan (Limerick City, Fine Gael)
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The application of the carbon tax to solid fuels has remained subject to a Ministerial commencement order since 2010. This approach was primarily adopted to delay the application of the carbon tax to solid fuel in the residential sector to allow for the development of a robust mechanism to counter the large scale sourcing of coal from Northern Ireland where lower sulphur standards apply. Such a mechanism is in place since June 2011. The application of the carbon tax to solid fuels was further postponed in 2012 given the overall tax increases in Budget 2012 including in the standard rate of VAT.

The introduction of Carbon Tax was about sending a price signal that there is a cost associated with the consumption of fossil fuels to the detriment of the environment. It should also be noted that solid fuels have the highest carbon content of all fossil fuels. As a result they are considered the dirtiest fuels and given the environmental impact it is important that they are taxed.

The carbon tax was applied to solid fuels on a phased basis in Budget 2013 but its implementation was delayed until after the last winter period i.e. from 1 May 2013 at a rate of €10 per tonne with a further €10 per tonne to be applied from 1 May 2014 to bring the rate of carbon tax in line with that of all other fuels.

While tax increases are unpopular, where Member States are under fiscal pressure, it makes senses to increase taxes in areas where some benefits can arise, in this instance a carbon tax promotes energy efficiency, reduces emissions and reduces our dependence on imported fossil fuels.

The application of the carbon tax to solid fuels i.e. coal and commercial peat (mainly peat briquettes and some turf), from 1 May 2013 has meant an increase in price of €1.20 in the case of coal (40kg bag) and 26 cents in the case of a bale of briquettes, based on current prices. This represents an 8.2% and 6.7% percentage increase in the price of coal and peat briquettes respectively. This relatively high percentage increase is due in part to those products having little or no excise applied to them prior to the carbon tax. It should also be noted that solid fuels have the highest carbon content of all fossil fuels and therefore attract a higher carbon tax.

Accordingly I do not intend to defer the further increase of €10 per tonne of CO2 emissions from 1 May 2014.