Monday 18 February 2019

Cost of coal and petrol to rise as State gets tough on emissions

Government increasing carbon tax in bid to tackle climate change

(Stock picture)
(Stock picture)

Paul Melia and Kevin Doyle

More than €7 will be added to the price of a bag of coal under long-term plans to phase out use of fossil fuels and tackle climate change.

Environment Minister Denis Naughten said he plans to introduce a minimum price on carbon emissions of €70 to €90 per tonne, which will add to the cost of motoring and domestic heating and reward people for choosing less-polluting fuels.

The comments were made at the Environmental Protection Agency's annual conference which heard that global commitments to reduce emissions would not be sufficient to prevent dangerous warming.

While the Government is expected to hike the carbon tax from the current rate of €20 per tonne to €30 in Tuesday's Budget, the Climate Change Advisory Council has recommended this be increased to €80 per tonne by 2030.

Mr Naughten confirmed this was his long-term goal, and that the minimum price for a barrel of oil should be €200, which would equate to a carbon tax of between €70 and €90 per tonne.

"The priority for me is we need to set a long-term trajectory for carbon and the use of fossil fuels," he said. "I believe we need to set a floor price for a barrel of oil for 2030... so people know this is the trajectory we're going on in Ireland, Europe and in global terms. It would also undermine the need... by some exploration companies to continue to explore for fossil fuels if they know this is going to be the floor price."

Figures from the Department of Finance show that under a €10 increase in the carbon tax to €30 per tonne, expected next week, the price of a litre of petrol and diesel would increase by around 3c, when VAT is included; a bale of briquettes would be 26c dearer and a 40kg bag of coal would rise by almost €1.20.

The move has been strongly opposed by hauliers, who say it will add to costs and penalise firms that are forced to rely on diesel trucks.

If the carbon tax stood at €80 per tonne, based on today's prices and including VAT, a litre of petrol would be almost 17c dearer and diesel 19.6c; a bale of briquettes would rise by €1.56 and a 40kg bag of coal would increase by €7.17.

The UN is next week expected to recommend that countries commit to average global temperature increases of no more than 1.5C. Chair of the Climate Change Advisory Council John Fitzgerald said setting a carbon price floor was a positive move and would help change behaviour.

"It would be great if it would happen," he said. "If the world raised the [carbon] price, things would be solved fairly rapidly. He's raising the issue and he's right to raise it."

Irish Independent

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