Fuel, Energy and Carbon Tax Relief: Motion [Private Members]
Dail Éireann — 2026-09-23
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Ciarán Ahern (LAB), Dublin South-West

I thank the Deputies from Independent Ireland for bringing this motion forward today. Everyone in this House knows and agrees that we are going through a severe and extended cost-of-living crisis. We all want to do everything in our power to protect people most at risk from energy poverty. Many people in the country are struggling now. However, the vast majority of us in this House, in opposition at least, agree on the reasons for the cost-of-energy crisis and the long-term solutions. The climate crisis is not mentioned once in this motion. That is just wild. Where is the acknowledgement in this motion that the current energy crisis has been directly caused by Donald Trump? Where is the acknowledgement that Trump, whom Independent Ireland welcomed with open arms to this country a week ago in the Phoenix Park, whose politics some of the Deputies here try to ape and assimilate, is the direct reason that energy bills are high here and across the world? Trump's illegal, reckless and pointless war on Iran has brought us here, not the carbon tax. Donald Trump, Mark Zuckerberg and their billionaire class are the only economic migrants into this country who are actually responsible for our problems, but Independent Ireland Deputies cannot find it within themselves to criticise them. Independent Ireland cannot punch down on them.
Where in this motion are the proposals for a tax on excess profits of energy companies? Where is the support for a moratorium on data centres which are adding to household bills and being built to placate tech billionaires? There are none, because these are the guys Independent Ireland Deputies want to cosy up to. Where have they been while we have been protesting against the hikes in public transport fares that are facing commuters, students, people with disabilities and people who cannot afford cars? They say they are concerned with transport costs but, just like the Government, only for certain cohorts.
We can absolutely agree that there is no question that households and small businesses across Ireland have faced extraordinary pressure from energy costs. Families have seen electricity and heating bills rise, motorists have faced much higher costs at the pump, and many people have been left with difficult choices between heating their homes, travelling to work and meeting other essential household expenses. Such is the scale of the energy crisis and the cost-of-living crisis more broadly that we now have more than half a million gas and electricity accounts in arrears. The pressures are very real and any serious discussion of energy policy or climate policy has to begin by recognising them.
An equally important point needs to be made: those pressures are being exacerbated and prolonged by Ireland’s continued dependence on fossil fuels, which the Deputies are seeking to subsidise indefinitely in this motion. The existence of a cost-of-living crisis does not remove the need to address Ireland’s dependence on fossil fuels. The experience of recent years has demonstrated why reducing that dependence should be an economic and social priority as well as an environmental one. Our over-reliance on imported fossil fuels means that we are massively over-exposed to international energy markets and geopolitical shocks, as we have seen following Trump's and Netanyahu’s misadventures in the Middle East.
The Minister has pointed out previously that our dependence on imported fossil fuels is a vulnerability, including the fact that approximately 80% of our gas is imported from our nearest neighbour. We urgently need to reduce that dependence and the carbon tax has an important role to play in that. What is important is the policy framework we put around it, how the proceeds are used, and whether we give people realistic and affordable alternatives.
This motion notes that for a lot of people in rural areas, and notwithstanding the progress that has been made with respect to the Local Link in recent years, there is still a lack of alternatives to private cars or fossil fuel-powered home-heating systems, and I agree with that. We need to go further and faster in rolling out supports and incentives to allow people to wean themselves off fossil fuels. We need to make EV grants, heat pumps, insulation, solar panels, batteries and so on more accessible to larger cohorts of the population, particularly people in rural communities and low-income households.
However, we will not be able to do that if we do away with the mechanism designed to fund those supports. Labour’s position has always been that carbon tax should form part of a just transition rather than being considered in isolation from household incomes and energy affordability. To be fair, we have supported increases in carbon tax while arguing for a refundable carbon-tax credit for low- and middle-income households. That distinction is important. Carbon tax is intended to reflect, through the price of fossil fuels, some of the environmental cost associated with their use. Yes, it is also designed to incentivise the move towards lower-carbon alternatives.
Carbon tax detractors often claim that it is a regressive form of taxation, but I do not believe that. In last year’s budget, over €1 billion raised through the carbon tax was allocated to alleviating fuel poverty and reducing our dependency on fossil fuels, thus protecting those who need it most from inflationary shocks. The largest stream of ring-fenced funding went to retrofitting, social protection, and - the Independent Ireland Deputies might be surprised to learn - farmers, through the agri-climate rural environment scheme, ACRES. The evidence has shown for years that carbon tax is a progressive measure and that our most vulnerable households are better off as a result of it.
Of course, the precise treatment of revenues from it should be transparent and must be scrutinised but the underlying principle is straightforward: if the State asks people to change how they heat their homes, how they travel and how they consume energy, the State must invest in making those changes possible. That sentiment is somewhat reflected in the motion, but the proposal seems to lean more towards the State just ceasing to ask people to make those changes.
I would lean the other direction; we must continue to encourage people to transition towards cleaner energy, but crucially we have to support them in doing so and protect those who are not yet capable of doing so. The unfortunate reality for some Deputies in this House is that climate change is real and it is accelerating. We have just emerged from a summer of extreme weather events both at home and abroad. We need immediate, targeted protection for households under pressure but we also need sustained investment that reduces the underlying need for that protection. Scrapping the carbon tax would be catastrophic in both respects.
Let us look again at the figures from last year’s budget. Some €558 million, the largest stream of ring-fenced carbon tax funding, went to retrofitting, including the warmer homes scheme which gives grants to low-income households to improve the energy efficiency of their homes. That funding is helping struggling families to keep their homes warm and lowering their bills.
The second largest stream of funding, €350 million, went to social protection payments to help alleviate poverty and protect people from the cost-of-living increases. These payments were chosen on the basis of research by the ESRI which focused specifically on determining how to make the carbon tax progressive and to ensure that the most vulnerable were not worse off as a result.
If we are going to be in the business of making policy here, we have to ensure it is evidence based. Contrary to proclamations that the carbon tax is regressive, the opposite is in fact true. This tax helps us to alleviate poverty. It particularly targets groups known to be at greater risk of energy poverty - low-income families and single adults living alone, exactly the people most in need of support at the moment.
Will the Deputies who are advocating for cuts to the carbon tax go back to their constituencies and gleefully tell pensioners on fuel allowance the good news that they will not be getting any further increases because they have successfully got the carbon tax slashed? Delaying the increase in carbon tax costs the Government millions that would otherwise go to targeted supports for those who need them most - low-income households, single pensioners and farmers.
In budget 2026, there was €163 million more in ring-fenced funding from carbon tax than there was in budget 2025. However, because of the suspension of the carbon tax increase, there will be no such additional funding for just transition measures next year.
It is also worth noting in all of this that some sectors, including heavy industry, haulage and farming, are already eligible for partial or even full reliefs from the tax. Of course, the Government has utterly failed to make clear the value and purpose of the carbon tax, how it works and who it helps. None of this is to say that I or the Labour Party do not have issues with certain aspects of the carbon tax. For example, the first €20 per tonne of the tax is not ring-fenced for just transition measures. I think it should be. However, this motion amounts to simply prolonging our dependence on and subsidisation of fossil fuels, leaving all of us - farmers and hauliers included - exposed to international price shocks like the ones we are experiencing at the moment, as well as defunding the supports available to help people wean themselves off fossil fuels.
We need a two-pronged approach - one that protects the most vulnerable in the immediate term, while also supporting people to reduce their dependence in the longer term. That is what a just transition should be. We in Labour have consistently called for targeted energy credits to help households struggling with bills and, at the same time, we want to see far greater investment in retrofitting schemes so that more households can improve their energy efficiency and bring those bills down in the first place. A temporary reduction in the price of petrol or diesel might bring the price down for a few weeks until Trump decides to, in his words, annihilate another country, but it does not reduce our dependence on oil. A retrofit does reduce that dependence, as do renewable energy, public transport and EVs. That is why Labour has consistently put these measures at the centre of our climate proposals. Not only are they climate measures in their own right, they will also help with the cost of living not just today or for this electoral cycle, but in the long term.
Households that are given the right supports can afford to retrofit their homes today and can reduce their energy consumption and lower their bills tomorrow. Those supports are funded by the carbon tax. This motion presents a false choice between helping people and tackling climate change.

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Record URI: https://data.oireachtas.ie/akn/ie/debateRecord/dail/2026-09-23/debate/main
Retrieved: 2026-09-28T05:50:49+00:00
Sitting date: 2026-09-23