Budget 2019: Householders and car owners escape hike in costs in 'last-minute carbon tax u-turn'

Stock Image: PA

Paul Melia

Householders and car owners have escaped a hike in motoring and home heating costs as the Government failed to hike the carbon tax.

Finance Minister Paschal Donohoe said he intended to increase the carbon tax from its current rate of €20 per tonne over time, but provided no timeline.

This is despite the Climate Change Advisory Council warning an increase was needed to help being the shift away from fossil fuels, and a new report from the ESRI saying a hike of up to €20 per tonne would only have  a moderate impact on prices.

The Environmental Pillar said it was "deeply concerned" by the "last minute u-turn", especially after the UN yesterday warned that deep cuts to emissions were needed by 2030 to avoid dangerous climate change.

However, purchasers of new diesel vehicles will be hit with a VRT surcharge of 1pc, while motorists who buy hybrid cars will continue to avail of VRT relief until the end of 2019.

There is just over €100m being made available in Budget 2019 for planting forests, a Beef Environmental Efficiency Pilot will be introduced, some €70m is available for a targeted agricultural modernisation scheme and €70m for the environment and waste management programme.

There is also an accelerated capital allowance for gas propelled vehicles and refuelling equipment, as part of efforts to encourage industry to move away from diesel vehicles.

The NTMA will also shortly issue a green bond which may allow financing of climate-related projects at lower costs, while the minister also said Ireland would join the Paris Collaborative on Green Budgeting.

This evaluates the environmental impacts of budgetary and fiscal policies, and assesses if they will help deliver national and international commitments on tackling climate change and other environmental goals.