Aontú TD Peadar Tóibín has accused the Government of “carbon-tax gouging” after an official response to a Parliamentary Question revealed that almost a quarter-of-a-billion euro in revenue from the tax went to the Exchequer.
An official reply to a parliamentary question asked by the TD reveals that €578 million of carbon-tax revenue raised between 2020 and 2023 was not spent on climate action schemes, but went into state coffers.
“Only 61 per cent of carbon tax went to the stated objectives,” said the Meath West TD, adding: “The official reply to me confirmed nearly one-fifth of the funding was surrendered back to the Exchequer, rather than being used to shield households fro spiralling energy costs or to fund promised green infrastructure.
“These figures show carbon tax is simply another form of taxation. It is not in all cases going on carbon objectives as the Government promises.”
The TD said that the new figures “undermine the case that the Government is making for continuing the carbon tax, particularly in the face of the fuel protests.”
He added: “Taxation should also be on the ability to pay and this fails that test. At a time when families are struggling to heat their homes, it is unacceptable that over half-a-billion euro of a targeted tax has essentially been swallowed by the general Exchequer.”
Amid backlash over the tax, Tánaiste and Finance Minister Simon Harris ruled out cancelling or postponing planned carbon tax increases despite rising energy prices.
Mr Harris said in March that the Government would not alter scheduled hikes, however, an increase which was due at the pumps from the start of next month has now been postponed as part of the response to the energy crisis driven by the conflict in Iran.
However, the Government has defended the tax, stating that the revenue is used to fund supports such as retrofitting and fuel allowances.
“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,” said Mr Harris in March.
“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,” he added.
The government has continued to defend the tax, making the argument that the revenue generated is essential to fund green initiatives like home retrofitting and to drive the transition away from fossil fuels.
Speaking to Gript last week, the Taoiseach said the tax “brings in about €1.4 billion,” and that a substantial amount of that goes to the Agri-Climate Rural Environmental Scheme.
“It’s a very important source of revenue,” said Mr Martin.
To date, carbon tax has generated more than €4.2 billion, with revenue spread across social protection, agri-environmental schemes and decarbonisation.
Mr Tóibín added that just 61 per cent of carbon tax funding could be verified as being spent through carbon-tax specific subheads, which are intended to track how the revenue is used.
“Of the remaining 39 per cent, 17 per cent was spent in Department of Social Protection schemes, but not recorded in carbon tax specific accounts, while 19 per cent was surrendered back to the Exchequer.
“The Minister has confirmed that the funds returned to the Exchequer were not spent in the year they were collected, despite households facing increased fuel and energy costs arising from carbon-tax increases.
“These figures show that, in practice, ringfencing has not been as clear or as robust as claimed,” he added.