Paul Kehoe (Wexford, Fine Gael)
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226. To ask the Minister for Finance how the move to decarbonise Ireland’s economy will necessitate a change in the country’s taxation model; if he is in favour of the establishment of an expert group on taxation including civil service officials, economists, environmental specialists and fuel industry representatives to develop a balanced fiscal strategy that supports the transition to sustainable energy while maintaining the financial stability of the fuels sector while ensuring the State is appropriately funded through taxation; and if he will make a statement on the matter. [43186/24]

Paul Kehoe (Wexford, Fine Gael)
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249. To ask the Minister for Finance his views on how Ireland’s taxation model will change as we move to a decarbonised economy; if he is favour of the establishment of an expert group on taxation including civil service officials, economists, environmental specialists and fuel industry representatives to develop a balanced fiscal strategy that supports the transition to sustainable energy while maintaining the financial stability of the fuels sector and ensuring the State is appropriately funded through taxation; and if he will make a statement on the matter. [43173/24]

Jack Chambers (Dublin West, Fianna Fail)
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I propose to take Questions Nos. 226 and 249 together.

As the Deputy will be aware, there has been much reform to environmental taxation in recent Budgets, including strengthening the environmental rationale of vehicle taxation and providing a multi-annual trajectory of carbon tax rate increases. While this is welcome from a climate action perspective, the shift towards lower emissions vehicles and fuels will have an exchequer impact.

In July 2023 my Department published a paper examining the Potential Fiscal Impacts of the Transition to a Lower Carbon Economy in Ireland. The paper examined the potential fiscal impacts of current domestic climate action policies including commitments in the Climate Action Plan 2023 and the Programme for Government. The analysis provides an overview of the potential exchequer revenue which may be impacted either negatively or positively by current domestic climate action policies and is available online: .

Building on this work, in September this year my Department published further analysis focussing on carbon tax; Carbon Tax Projected Exchequer Revenue Estimates 2024-2030. This paper examines trends in carbon tax exchequer yields in Ireland over the last decade, and provides forward projected estimates of carbon tax yields over the next six years to 2030, in order to provide timely analysis of estimated trends and levels of expected exchequer receipts from carbon taxation. The analysis also examines how domestic climate change policies are expected to impact carbon tax yields, as our economy transitions to a low carbon economy in line with current climate action plan 2024 (CAP24) measures. The paper is also available on my Department’s website:

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The estimates in this work are based on analysis of the Sustainable Energy Authority of Ireland (SEAI) and the Environmental Protection Agency (EPA) ‘With Additional Measures’ (WAM) and ‘With Existing Measures’ (WEM) scenarios for climate action delivery. The Department keeps these point-in-time estimates under ongoing review, and has allocated all carbon tax receipts in line with the Programme for Government commitments.

There are a number of ongoing work streams focussed on the development of sustainable fuel policy across different sectors including the National Demand Management Strategy, the Alternative Fuels Working Group and Climate Action Plan actions/progress reports. Taxation policy is also reviewed annually via the budget process which includes publication of Tax Strategy Group papers setting out options relating to future tax policy. Stakeholder bodies are welcome to provide input via pre budget submissions or representations.