Brian Stanley (Laois, Sinn Fein)
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88. To ask the Minister for Finance if research has been carried out with regard to the economic and social impact an increase in carbon tax will have on those living in rural Ireland. [43659/19]

Paschal Donohoe (Dublin Central, Fine Gael)
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As part of a joint research programme between the Department of Finance, the Revenue Commissioners and the Economic and Social Research Institute (ESRI), the ESRI published research on the impacts of increases in the carbon tax, including distributional impacts. This research paper can be accessed at:  .

In June 2019, the ESRI published a special article, Carbon taxation in Ireland: Distributional effects of revenue recycling policies. This special article examined the distributional effects of increases in the carbon tax for urban and rural households as well as the distributional effects of different revenue recycling mechanisms. 

This article can be accessed at: .

I recognise that the research points to carbon tax increases disproportionately impacting low income and rural households.  In order to minimise the impact of the increase on heating costs, I have delayed the increase on home heating fuels until 1st May 2020.  I am also increasing the fuel allowance by €2 per week. This increase applies from the first of January 2020 and means an annual increase of €56 to each household. Based on the findings from the aforementioned ESRI research, this will leave the 370,000 households who are in receipt of the fuel allowance better off than before the increase in the carbon tax. This ensures that the most vulnerable in society are protected from the increased carbon tax.

Alongside this I am providing increases to programmes that help to address the causes of fuel poverty. The Warmer Homes scheme provides free energy efficiency upgrades to households deemed to be in or at risk of energy poverty. This reduces the energy required to heat a home adequately, thus reducing a household’s exposure to increases in energy costs.  This will be more effective in the long run at reducing heating costs than increases in the fuel allowance. An extra €13m will be provided for this scheme in 2020, bringing its total budget allocation for the year to over €50m.

These measures will help to protect the most vulnerable in society from the impact of the carbon tax increases in the short, medium and long term.

Maureen O'Sullivan (Dublin Central, Independent)
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89. To ask the Minister for Finance the reason large polluters such as the airline sector were not considered for increased carbon related taxation as a means to make carbon taxes more equitable in view of the increase in carbon taxes and related climate change mitigation expenses being levied on many persons and households in budget 2020; and if he will make a statement on the matter. [42280/19]

Paschal Donohoe (Dublin Central, Fine Gael)
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The overarching legislative framework for the taxation of aviation fuels used in intra EU and international flights is in EU and international laws. EU Directive 2003/96/EC on the taxation of energy products and electricity, commonly known as the Energy Tax Directive, requires Member States to exempt certain fuels used for commercial aviation purposes from excise duty. The scope of this exemption must include jet fuel (which is the most commonly used heavy oil in air navigation) and must encompass such fuel used for intra-Community and international air transport purposes.

A Member State may waive this exemption where it has entered into a bilateral agreement with another Member State to tax fuel for intra-community flights. With regard to fuel for international transport, the scope for a Member State to take a unilateral approach to taxation is limited by international law and a range of bilateral and multilateral agreements that operate under 1944 Convention on International Civil Aviation (known as the Chicago Convention).  

I am informed by Revenue that the breakdown of taxes levied on the different types of aviation fuel as provided for under the Finance Act 1999 and Energy Tax Directive are shown in the following table.

Since 2012, CO₂emissions from the aviation sector have been included in the EU Emissions Trading System (ETS) and the sector is therefore subject to a carbon pricing mechanism.