Tánaiste and Finance Minister Simon Harris has ruled out cancelling or postponing planned carbon tax increases despite rising energy prices.
Speaking to reporters this morning, the Fine Gael leader said the Government would not alter the scheduled hikes, stating that the revenue is used to fund supports such as retrofitting and fuel allowances.
Harris outlined a series of measures aimed at addressing rising fuel costs in the short term, including temporary excise duty cuts of 20c on diesel and 15c on petrol. If passed by the Dáil, these reductions will take effect at midnight on Wednesday and run through the end of May.
Additionally, the Government plans to slash the National Oil Reserve Agency (NORA) levy, effectively cutting both fuels by a further 2c per litre. While this requires new legislation, officials expect to fast-track the bill through the Oireachtas this week.
Asked if carbon tax reductions or postponement would be considered, Harris shot the idea down emphatically.
“We won’t be doing that,” he quickly replied.
“That money goes directly to constituents right across this country. It directly funds retrofitting, it directly funds fuel allowance. It also directly helps us move towards a transition that we have to move towards.
“As long as this country remains reliant on fossil fuels, we remain reliant on what happens in other parts of the world in terms of the impact on people’s pockets in this country.”
“But we are taking action that I believe will be more effective and more impactful. The excise measure is quicker, it’s more meaningful I believe in terms of people’s pockets at the pump, and taking measures around the fuel allowance too.”
“So different people have suggested different ideas, I’m sure in good faith, but we believe this is the most appropriate, balanced package to help people in the here and now.”
Harris also stressed that any interventions introduced by the Government would be temporary, citing volatility in global energy markets.
“The idea that you’d stitch anything in today for six months would be foolish,” he said.
“We have to be nimble in our response.”
The comments come after several Government backbenchers raised the possibility of pausing or scrapping upcoming carbon tax increases in light of surging energy costs linked to instability in the Middle East.
Fianna Fáil TDs Cathal Crowe and John McGuinness – the latter of whom is currently serving as Leas Ceann Comhairle – have both publicly suggested that the planned hikes should be reconsidered, arguing that reducing fuel-related taxes could provide immediate relief to households and businesses.
Transport Minister of State Sean Canney also addressed the issue, indicating that the Government intends to proceed with the existing hikes, and denied that carbon tax is, in fact, a “tax”.
“Carbon tax is there, has been legislated for in the last government,” he said.
“Secondly, the proceeds from that carbon tax is being used to retrofit our houses. It’s been used to help out with the warmer home scheme for people who are in fuel poverty. And that’s been put to good use.”
“It’s not a tax, it’s a fund that’s actually being turned back out into places where it’s needed. So right now I think we need to keep that intact.”
Canney said the focus should remain on existing support measures rather than altering the tax itself.
“I think it’s important that we look at what measures we can put in right now, which we’re doing today,” he said.
“And that’s the important thing. To make sure that people have a benefit and have some sort of support, be it homeowners, be it people who are filling their cars at the pump, or be it people who are in fuel poverty.”
Taoiseach Micheál Martin said the Government’s planned package of supports would involve significant expenditure and would not be cost-neutral, despite the fact that the State would have received a significant windfall due to all the taxes and levies on fuel.
“It won’t be cost-neutral at all,” he said.
“It’s over €200 million. So it’s a significant allocation.”
He added that the Government would need to ensure that any measures taken remain “financially sustainable” in the context of overall public spending.
Ireland’s carbon tax is set to increase again this year as part of a legislated trajectory towards €100 per tonne by 2030 under the Finance Act 2020. The latest increase will apply to home heating fuels from May 1st 2026, following an earlier increase on petrol and diesel in October 2025.
The tax is designed to encourage reduced reliance on fossil fuels and “force motorists out of their cars”, in the words of former Transport Minister Shane Ross in 2019, with revenues earmarked for climate-related measures including home retrofitting and fuel poverty supports.
Polling in recent years has indicated significant public opposition to higher fuel taxes linked to climate policy, particularly during periods of rising energy costs.