Minister explains how revenue from carbon tax is being used
In both 2024 and 2025, the carbon tax increased by €7.50/t, as per the Finance Act 2020.
According to Minister Chambers, these increases are phased, with auto fuel changes being introduced annually in October, and changes for all other fuels the following May, to allow for a lower rate on home heating fuels during the winter heating season.
The minister outlined that the programme for government commits to maintaining this schedule of annual increases to 2030, and using the resulting revenues raised to support climate action measures.
This revenue will aso be used to ensure "the most vulnerable" are protected from unintended impacts of the tax increase, Minister Chambers explained.
He said that this includes funding for retrofitting and agri-environmental schemes, alongside targeted social welfare and other initiatives to prevent fuel poverty and ensure a just transition.
The minister highlighted that in 2024, €788 million was allocated from carbon tax revenues in total, and that in 2025, this allocation grew to €951 million.
This represented an annual increase of €163 million on the amounts funded from the carbon tax increase in 2023 and 2024.
Minister Chambers said: "In line with the government's commitment to allocate funding over this decade to encourage and incentivise farmers to farm in a greener and more sustainable way, at Budget 2024, the Department of Agriculture, Food and the Marine (DAFM) was allocated €113 million funded from increases in the carbon tax, 14% of the total annual allocation.
"At Budget 2025, this amount was increased to €143 million, 15% of the total annual allocation."
"The amounts part-fund the Agri-Climate Rural Environment Scheme (ACRES) and to continue prior commitments on green agriculture pilot projects.
"These allocations support farmers as they undertake a range of actions which will result in improved outcomes on biodiversity, climate, air, and water quality," Minister Chambers added.
According to the minister, between 2020 and July 16, 2025, DAFM has been allocated a total of €366 million in carbon tax funding for these measures, including as part of Budget 2025.
Minister Chambers said that his department issues an annual publication on budget day titled The Use of Carbon Tax Funds, which contains further detail on these allocations.
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