Thomas Pringle (Donegal South West, Independent)
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154. To ask the Minister for Finance if the second phase of the carbon tax increase will be introduced in May 2014; and if he will make a statement on the matter. [14787/14]

Michael Noonan (Limerick City, Fine Gael)
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Carbon Tax was introduced in Budget 2010 but its application to solid fuels was subject to a Ministerial commencement order.  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. As I was aware of the potential impact on lower income households, I chose not to introduce the carbon tax on solid fuels until after the 2012/2103 winter period and I opted to introduce the tax in two phases i.e. €10 per tonne of CO2 from 1st May 2013 and a further €10 per tonne of CO2 from 1st May 2014 thus bringing the carbon tax on solid fuels in line with that on all other fossil fuels i.e. at €20 per tonne of CO2.  

While tax increases are unpopular, where Member States are under fiscal pressure, it makes sense 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. Accordingly I do not intend to defer the further increase of €10 per tonne of CO2 emissions from 1 May 2014.