Taoiseach rules out cut in carbon tax, against ‘short-termism’

Taoiseach Micheál Martin has ruled out any cuts or changes to the proposed carbon tax, saying revenues would be ring-fenced for energy-saving measures.

Speaking in Co Kerry on Monday, he said grants to retrofit homes, industries and commercial premises, which were to be announced this week, would reduce bills permanently and were tied to the carbon tax.

He warned against “short-term” thinking to address what was a global problem with oil and gas.

The carbon tax was not that significant in overall inflationary terms, he said.

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Mr Martin was speaking in Killarney at the installation of the country's largest combined heat pump and solar PV system at the Tricel engineering and manufacturing plant.

“That is the kind of change we need in this country to meet our climate change objectives,” the Taoiseach said, praising both the energy-efficiency measures and the manufacturing capacity of the plant.

Tricel, started by the Stack family in 1973, now operates in 12 countries and has two plants in France: in Poitiers and in Avignon.

Opening up

While the 1950s and 1960s were about the opening up of the country to foreign direct investment, the next 50 years would be “about the Tricels of this country”, he said.

Manufacturing autonomy and energy security were to the fore after Covid-19, the Taoiseach said.

There was a need also to rebalance energy use for more security in the supply chain than depending on gas and fuel. Gas would be a transition fuel, but there would have to be “a doubling down” on renewables, he said

Warning against “short-termism” in the response to inflation, which he said was caused by the pandemic and the geopolitical situation and dependence, Mr Martin stressed how the “major measures” on retrofitting homes – to be announced this week – would reduce household energy bills “permanently”, and “for the longer term”.

Of the total allocation of €368 million for energy transformation in the budget, some €202 million to be raised from the carbon tax would be ring-fenced to finance the retrofitting and energy upgrading of residential and community schemes, Mr Martin said.

Major announcement

Revenues generated from the carbon tax would enable homes to permanently reduce their heating costs for years to come. The Government would be making a major announcement on grant assistance this week for retrofitting, he said.

“We have to be careful not to get into short-termism here, that we keep our nerve in terms of the more medium-term plan of retrofitting homes and retrofitting industry commercial premises so that we reduce our dependence on fossil fuels more generally and have a more efficient but also more cost-efficient model where families will have cheaper bills into the future. That has to be the agenda.”

The carbon tax was not that significant in terms of inflation, the Taoiseach stressed.

Asked about Shannon LNG, the liquefied natural gas plant proposed for the Ballylongford to Tarbert landbank along the Shannon estuary in north Kerry and which is once again before An Bord Pleanála, Mr Martin said he had watched it for 20 years, as it went "on and and off".

The Government policy was opposed to the importation of fracked gas. Gas would be a transitional fuel, but overall he would prefer to move faster on renewable energy and reduce the overall dependence on fossil fuels.

Wind energy, which is also controversial in the same region in north Kerry because of the proximity of turbines to homes and communities, was the way forward. However, turbines were best off shore, he said.