Government will go ahead with carbon tax increases

The Government will not be rowing back on plans to introduce the increased carbon tax, Taoiseach Micheál Martin has confirmed.

With rising fuel costs, there have been calls for the increase to be scrapped as households grapple with rising energy costs.

The carbon tax increase will come into effect in May.

The increases will add €1.50 a month to home heating oil cost and €1.40 to gas bills each month.

Speaking on Tuesday morning, Mr Martin said the money raised from carbon tax is ring-fenced for efforts to tackle the climate emergency.

“The whole importance of the carbon tax is to enable us to have resources to enable people to develop energy efficiency and ultimately reduce costs of energy in their homes. So we’ve got to avoid a knee-jerk response here and we’ve got to do this in a very considered way,” he said.

The Taoiseach added that himself, Leo Varadkar and Green Party leader Eamon Ryan met last night to discuss inflation. He said they will be meeting Finance Minister Paschal Donohoe and Expenditure Minister Michael McGrath in the coming weeks to develop ways of protecting people from inflationary pressures.

He said they plan to create a process that will be inclusive, and cover all elements of this. Included in the discussions will be "budgetary policy right through to how we respond to the immediate pressures. That’s how we see it right now,” Martin said.

Leo Varadkar said the Government is looking at plans to offset the cost of the planned carbon tax increases on home heating oil and other fuels, which is to come in next month.

Mr Varadkar said the rise in carbon tax is already legislated for.

“The money is ring fenced, it goes into the fuel allowance, it goes into green schemes for farmers, it goes into funding our retrofit programme,” he added.

“But it will have an impact on people, and we’re very much aware of that as a government.

“Thirty euros might not sound like a lot of money but it is a lot of money if you don’t have and that of course comes on top of increases that have happened to date.

“So we are examining means as to how we might offset that, so that people are no worse off than they would be as a consequence of that increase.

“We’re working on that across government at the moment.”