The Government is exploring one-off payments towards environmentally friendly energy measures like heat pumps and efficient cars amid the increasing political pressure of the global energy crisis.
Tánaiste Simon Harris has doubled down on a just transition from fossil fuels, even as the Government faces mounting calls to abandon its commitment to the carbon tax.
Harris has now asked officials in his Department to consider payments that could be made available towards the structural costs of changing to more sustainable energy and electricity supplies.
Options now being considered include accessible financing for home upgrades, and more access to retrofitting.
In a concession, the Government has postponed a planned increase in the carbon tax, which is a charge on fuels like petrol, diesel, home heating oil and natural gas.
In the wake of this month’s fuel protests, the Government announced that a planned increase in the tax due to come into effect on May 1st will now be deferred until October 14th. It is estimated that it will cost the state €22 million to delay the carbon tax increase, The Government is likely to still face significant opposition to the increase in October.
In a speech on Saturday at a meeting of the Youth of the European People’s Party Council at Dublin City Hall, Harris suggested that the Government could consider making on-off payments to people who want to switch to more sustainable home heating systems or cars.
Harris said that the ongoing global energy crisis “has once again exposed Europe’s vulnerabilities.” He said that Europe had to learn not to rely on external actors for its energy security. “We said this after the illegal invasion of Ukraine – in my opinion we did not fully learn our lesson then and, as an EPP leader, we have a duty not to make the same mistake now,” he said.
The Tánaiste again argued that Ireland must move away from a reliance on fossil fuels, but in a transition that is “fair.” “Households and small businesses cannot be expected to carry the burden alone. Governments must help,” he said.
“This means targeted grants, accessible financing, and continued investment in infrastructure – from retrofitting homes to expanding renewable energy and improving our electricity grid.”
“Are there additional practical supports or once-off measures we can introduce to help people transition at their own pace whether that’s upgrading home heating systems, including hybrid heat pumps or lower-emission fuels like HVO where appropriate, or moving towards more efficient vehicles?”
What the fuel protests meant
On Sunday, Harris confirmed that he is now “asking officials in my Department to work on options as to what Government can do further and to work with colleagues across Government— not just to help in the here and now, but to permanently and sustainably make progress”.
He added: “We’ve got to look at what we can do in terms of targeted grants, accessible financing, continued investment in retrofitting homes, expanding renewable energy, and improving our electricity grid.”
“So I am asking officials to examine whether there are additional practical supports we can introduce to help people upgrade their home heating systems, including hybrid heat pumps or lower-emission fuels like HVO.”
The Coalition had insisted during the fuel protests that it was not going to abandon the carbon tax. Since 2020, the Government has been committed to an annual increase in the carbon tax, to take it from a rate of €20 per tonne of CO2 in 2020 to €100 per tonne in 2030. The rate for 2026 is €71 per tonne. Revenue from the carbon tax is ringfenced for measures like retrofitting schemes and the fuel allowance.
