Ireland Cuts Carbon Tax on Heating Fuels Amid Cost Crisis

The Irish government has announced a reduction in the carbon tax rate on home heating oil and gas, effective immediately. Minister for Finance Simon Harris stated that the rate will be cut by €48.50 per tonne, reversing planned increases that were set to take effect by May 2027. Harris emphasized that the recent surge in heating costs due to the Middle East conflict has placed a significant burden on many households, making this adjustment necessary.

The carbon tax on kerosene and natural gas was scheduled to rise from €63.50 per tonne to €78.50 per tonne by May 2027. Instead, the rate will now be reduced to €48.50 per tonne, effectively halving the originally planned rate. Harris confirmed that no further increases will occur during the current government's term.

Budget 2027 will allocate €654.5 million for residential and community energy upgrade schemes, part of a broader €1.3 billion budget for the Department of Climate, Energy and the Environment. These funds will support grants for home retrofits, solar panels, and a boiler scrappage scheme aimed at reducing long-term energy costs for participants. Additional funding includes €170 million for climate action and €2.3 billion for Uisce Éireann to enhance water infrastructure.

Minister for Public Expenditure and Reform Jack Chambers highlighted that these measures are designed to provide permanent cost-of-living relief while promoting sustainability. The budget also earmarks €47 million for waste contamination sites and €25 million for the EU's Just Transition programme in the Midlands.