#Budget2020: Petrol and diesel to rise overnight as minister unveils series of climate change measures
Finance Minister Paschal Donohoe has confirmed carbon taxes at midnight will increase to €26 a tonne, netting the government an extra €90m for the government next year.
While changes for diesel and petrol will come in over night, which are expected to add around 2c to a litre of fuel, extra taxes on home heating oil will be delayed until next May.
But the government have also announced in their pre-election budget measures to alleviate costs and job cuts for areas as a result of climate action.
Mr Donohoe said: “Bold decisions are needed on our investment priorities but also on taxation and regulation. Carbon pricing is part of this.”
He explained how there was cross party support to increase the price of carbon over future years from the current level to an eventual €80 a tonne. This would raise an extra €6bn to help further “decarbonise the economy”.
Crucially, Mr Donohoe flagged that it was the Fine Gael-led government's ambitions to increase carbon tax amounts “steadily” to meet the 2030 target.
And as Midlands communities feel threatened by the closure of Bord na Mona and ESB power stations, it was announced that a special package would be funded for the region.
Some €20m will go on a new energy efficiency scheme for the Midlands, initially targetted at social housing stock.
“This will create new sustainable employment in the region,” added the minister.
A further €5m will go on peatland rehabilitation, it was announced. And a so-called 'just transition' fund of €6m will go to communities. Furthermore, a just transition commissioner will oversee this, the minister said.
Unions, local employers and the government will cooperate on how the fund wil be spent.
These latter measures will help support 400 environmentally sustainable jobs, said the minister, and a 100 more jobs in the peatlands.
Separately, the minister announced a new pollution-linked tax on new car purchases.
He will replace the 1% diesel surcharge with a nitrogen oxide (Nox) emissions-based charge.
This will take effect from the beginning of 2020. In his speech, the minister explained the it would apply on a euro per milligram/kilometre basis, with the rate increasing in line with the level of nitrogen oxide emitted.
This new type of surcharge will apply to all passenger cars registered for the first time on January 1, including new and imported vehicles.
It is estimated that it would €200 to the cost of buying a diesel car and €115 for a petrol-run car.
In addition, other technical measures on climate change were announced. These include a benefit in kind zero rate on electric vehicles, an extension of VRT reliefs for hybrid vehicles as well as additional reliefs including diesel rebates for hauliers.
The minister also announced that he was equalising electricity rates for businesses and non-businesses.
