Francis Noel Duffy (Dublin South West, Green Party)
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278. To ask the Minister for Public Expenditure and Reform the breakdown of expenditure from the revenue gained by carbon tax. [53345/22]

Michael McGrath (Cork South Central, Fianna Fail)
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The Programme for Government commits to a gradual increase in the carbon tax over the next decade to reach €100 a tonne by 2030. It is estimated that these increases will lead to €9.5bn in additional revenue over the period 2021 - 2030.

The Programme for Government states that all of the funds raised by the increases in the carbon tax will be used to support increased Government expenditure. Specifically, it commits that of the €9.5bn, €3bn is to be allocated to targeted social welfare and other initiatives to ensure a Just Transition, €5bn is to be allocated to energy efficiency, and the remaining €1.5bn is to be allocated to green agricultural measures.

As part of the suite of Budget Day publications, the Department publishes a paper detailing the uses of the additional revenues raised by the annual increase in the carbon tax rate. This paper entitled, theUse of Carbon Tax Funds 2023is available on my Department's website.

In 2023, spending of €623m is being funded by the carbon tax. This represents the cumulative additional spending made available by the increases in carbon tax since 2020, comprised of the €90m in revenue from 2020, €148m in 2021, €174m in 2022 and an increase of €211m in 2023.

The additional funds made available in 2023 have led to an additional allocation of €89m to the Department of Environment, Climate and Communications in 2022 for investment in energy efficiency. This brings total carbon tax funding for energy efficiency to €291m in 2023. This investment will support over 37,000 home energy upgrades (including solar PV), including over 13,800 homes to a Building Energy Rating (BER) of B2 and 6,000 free upgrades to the homes of those in, or at risk of, energy poverty.

In 2023, an additional €78m in funding has been allocated for the Department of Agriculture, Food and the Marine, bringing total carbon tax spending to €81m compared with just €3m in 2022. This additional €78m will fund the new Agri-Climate Rural Environment Scheme (ACRES) which will support farmers who undertake actions which are beneficial for the environment. Beyond ACRES, the remaining €3m of the 2023 carbon tax funds will support other initiatives, including a demonstration anaerobic digestion project.

The Department of Social Protection is receiving an additional allocation of €44m in 2023. This brings the total carbon tax funding for social protection to €218m in 2023. This means 35% of the total hypothecated carbon tax revenues will be spent on social protection measures in 2023, ensuring that increases in the carbon tax are progressive. As noted in the carbon tax paper, analysis has found that households in the bottom five income deciles are better off as a result of the social protection measures funded by the increased carbon tax than they would be in the absence of the carbon tax and the compensatory mechanisms.

Finally, the remaining €33m in additional funding has been allocated to the continuation of 2020 Carbon Tax Investment Programmes in Other Departments. These programmes included the creation of a Just Transition Fund, Peatland Rehabilitation, Greenways/Urban Cycling, grants for Electric Vehicles and investment in charging infrastructure, and the Green Climate Fund.