Tánaiste Simon Harris has warned that abolishing Ireland’s carbon tax would force the country to “hand over billions of euro to Ursula von der Leyen and Europe” under EU rules.
Speaking to Gript outside Government Buildings ahead of a cabinet meeting this week, the Fine Gael leader said that EU regulations would impose significant penalties if the tax were removed, warning that the State would “lose our derogation” under European directives.
“If you abolish… the carbon tax in its entirety tomorrow, what would that mean? You know what it would mean?” Harris said.
“It would mean that we would lose our derogation to something called ETS2.
“You know what that would mean? It would mean we would have to hand over billions of euro to Ursula von der Leyen and Europe, instead of having a carbon tax here.”
Harris challenged the stance of opposition politicians who have campaigned against the tax, singling out Aontú leader Peadar Tóibín.
Meath West TD Tóibín has repeatedly called for the carbon tax to be scrapped.
“Now, is it the position of those who wish to abolish the carbon tax – Peadar and all that gang – is it their position that they want the Irish government to write a cheque to Brussels?” Harris asked.
“Or is it their position that they want to have a conversation about how we can have a more sustainable, perhaps a fairer, carbon tax?
“I’m up for the second; I’m not going to mislead people on the first.”
The Tánaiste stated that the Government is assessing measures to assist households with energy expenses ahead of the upcoming Budget, noting particular concern over heating costs.
“In relation to kerosene and gas, I’ve made the point that I’m particularly worried about the cost of home heating and the cost of gas,” Harris said.
“We will make a decision as a government, as a collective; I think there’s things we can do there.”
While acknowledging that the Government possesses flexibility regarding carbon taxes on motor fuel, Harris insisted that any adjustments must be weighed against funding for farm schemes, such as the Targeted Agricultural Modernisation Scheme (TAMS) which funds solar panels.
He dismissed claims that the EU’s ETS2 system could be disregarded without financial repercussions for taxpayers.
“I’m not going to accept the argument that ETS2 doesn’t matter,” Harris said.
“And I’m not going to allow some people – and by the way, not all the opposition, but some people – mislead farmers and suggest that if we just magicked away the carbon tax, there would be no financial consequences for taxpayers in the country.”
Responding to polling suggestions that the public and farming communities would prefer abolishing the tax over receiving solar grants, he argued that the revenue supports vital measures that would otherwise be lost to Brussels.
“It’s a fact that carbon tax does fund certain things,” Harris said.
“I’m talking about, if it didn’t exist, that money would go to Europe, and we’ve got to get this balance right.
“But those decisions will be made closer to the time.”
The comments come with Budget week approaching, amid sustained political debate over energy costs and environmental taxation.
In written Dáil answers published by Gript on September 29th, Harris previously stated that EU rules do not permit Ireland to reduce the VAT rate on home heating oil.
Households reliant on heating oil have faced increased costs following international volatility linked to conflict in Iran and disruptions in the Strait of Hormuz, with coalition leaders indicating that targeted relief will be announced in the Budget.
The broader debate on climate levies remains contentious among the public, with a Red C poll published by the Business Post on November 29th, 2025 finding that over 60% of people opposed higher taxes for climate measures.