Revenues from increases in carbon tax will double to an average of almost €1 billion a year over the decade-long span of the new National Development Plan (NDP).
The sums – to be raised on the back of increases in the tax for petrol, diesel and other fuels – are to be used to fund a massive programme of retrofitting homes for energy efficiency among other measures.
Carbon tax yielded €494 million in 2020 but this would rise to an average of €950 million a year over the 10 years to 2030 if possible additional revenue of €9.5 billion materialises by then.
The Government has committed to increasing carbon tax to €100-per-tonne by 2030, with €7.50 hikes each year to 2029 and €6.50 in 2030.
The NDP outlines how €5 billion of the expected €9.5 billion in revenue will be invested in energy efficiency. This includes the National Retrofit Plan to improve Ireland’s housing stock as part of efforts to reduce carbon emissions while making homes warmer.
The NDP notes that, as flagged in the Coalition’s Programme for Government, another €1.5 billion is to go towards schemes to assist farmers in the decarbonisation of the agriculture sector.
The remaining €3 billion will go towards tackling fuel poverty and to provide a “just transition” away from fossil fuels.
Carbon tax is a key measure in the State’s efforts to tackle climate change and decrease carbon emissions through discouraging the use of fossil fuels.
The rate currently stands at €33.50 per tonne but is expected to increase to €41 per tonne on Budget day.
The estimated additional yield from the expected €7.50 increase in the carbon tax in next week's Budget is €108 million in 2022 and €147 million in 2023 according to Department of Finance Tax Strategy Papers published last month.
The papers estimate the cost of a 60-litre tank or petrol will rise by €1.28 from October 13th and a full tank of diesel is set to go up by €1.48.
The cost of a 900-litre tank of kerosene is to go up by an estimated €19.40 from May 1st, 2022.
The average yearly household usage of natural gas (11,000 kWh) is expected to cost about €16.95 extra after that increase kicks in on the same date.
A 40kg bag of coal would cost 89c more, and a 12.5kg bale of peat briquettes would cost 20c extra.