Gerald Nash (Louth, Labour)
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122. To ask the Minister for Communications, Climate Action and Environment if he will provide an update of the new windfall profit tax announced in November 2022 which is to be applied to the revenue of energy companies; the estimated amount he forecasts will be collected in 2023 from the measure; and if he will make a statement on the matter. [6834/23]

Gerald Nash (Louth, Labour)
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123. To ask the Minister for Communications, Climate Action and Environment if he will provide an update on the introduction of the temporary solidarity contribution announced last year for 2022 and 2023 which will be levied on companies active in fossil fuel production or refining; the estimated amount of revenue he anticipates will be generated from the measure in 2023; and if he will make a statement on the matter. [6835/23]

Eamon Ryan (Dublin Bay South, Green Party)
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I propose to take Questions Nos. 122 and 123 together.

Council Regulation (EU) 2022/1854 on an emergency intervention to address high energy prices came into force in October 2022. This Council Regulation provides for a cap on market revenues of non-gas electricity generators and a temporary solidarity contribution on profits in the fossil fuel production and refining sectors.

On 22 November 2022, the Government decided to place a cap on all market revenues of non-gas electricity generators with a capacity of 1 MW or more. The applicable cap of €120 per MWh for wind and solar, at least €180 per MWh for oil-fired and coal-fired generation and €180 per MWh on other non-gas generation. This cap on market revenues will operate from December 2022 to June 2023 inclusive.

The Government also decided that the temporary solidarity contribution will apply for 2022 and 2023, taxable profits which are more than 20% above the baseline period from 2018 to 2021 will be subject to a rate of 75%, and losses from previous years will not be taken into account in the calculation of the taxable profits.

Legislation will be required to implement the the cap on market revenues and the temporary solidarity contribution. My Department is currently working on the development of this legislation.

The proceeds collected will be highly dependent on wholesale gas prices. The current estimated proceeds to be collected from the cap on market revenues and the temporary solidarity contribution is in the range from €280m to €600m. This is at the lower end of the range signalled in November 2022 due to the subsequent significant reduction in wholesale gas prices.

These proceeds are expected to be collected in the period 2023 to 2024. No decision has yet been made by Government in relation to how these proceeds will be allocated.