The State will step in to pay up to 40 per cent of the recent increase in electricity and gas unit energy costs experienced by many businesses. The measure is the centrepiece of an estimated €1.4 billion budget package to help businesses cope with the surge in energy costs.
Minister for Finance Paschal Donohoe outlined in his budget speech details of the new Temporary Business Energy Support Scheme (TBESS). It is open to all tax-compliant businesses that experience increases of at least 50 per cent in their electricity and gas unit costs in 2022 compared with last year.
Businesses must register for the scheme and monthly payments will be capped at €10,000 for each company. The scheme is planned for the winter months and is due to expire at the end of next February. However, Tánaiste and Minister for Business Leo Varadkar said the scheme could be extended beyond that date if required; he is due to resume the role of taoiseach by then.
Mr Donohoe said the scheme will operate on a self-assessment basis and will be overseen by Revenue. He also said it would require approval from the European Commission under state aid rules, but that the scheme had been designed with these rules in mind.
He said it is a “significant intervention” by the Government in the economy, and it did not want to let the energy “shock” to businesses caused by the war in Ukraine leading to a loss of jobs.
Speaking after the budget at a press conference for his department, Mr Varadkar confirmed that the first payouts probably won’t hit companies’ bank accounts until November, but payments will be backdated until September.
Mr Varadkar suggested that “pretty much all companies” in the State will qualify, but the €10,000 monthly cap would prevent it becoming a “blank cheque” payout for highly profitable businesses that did not need the money. He also said the scheme is “just about under the limit” of what would be allowed under European state aid rules.
Mr Varadkar said the scheme “could end up costing more” than the €1.4 billion estimate and if the energy crisis persists, TBESS could run beyond the end of February: “If we need to extend it, we will, provided we can afford to do so.”
The scheme, which was widely flagged in advance of Tuesday’s budget speech by the Minister, was broadly welcomed by many business groups. The Restaurants Association of Ireland (RAI) said the help was welcome but “does not go far enough”.
“The devil will be in the detail on this and we are calling for Revenue to open and administer the scheme immediately – some businesses are already struggling to pay the bills coming in through their doors,” said Adrian Cummins, the chief executive of the RAI.