Ireland's State of the Environment Report 2024

327 Chapter 12: Environment and Energy Figure 12.9  Direct and indirect fossil fuel subsidies, 2017-2021 0 500 1,000 1,500 2,000 2,500 3,000 3,500  Indirect Fossil Fuel Subsidies  Direct Fossil Fuel Subsidies € million 2017 2018 2019 2020 2021 Source: CSO, 2023 The CSO also estimates indirect fossil fuel subsidies amount, on average, to €2.5 billion per annum, including exemptions on excise and VAT for aviation fuels, tax differentials on marked gas oil and road diesel, VAT rebates for road diesel and lower VAT on energy products. The total indirect and direct fossil fuel subsidies for 2017-2021 are presented in Figure 12.9, which shows COVID-19 impacts resulting in lower subsidies in 2020. Renewable energy subsidies A recent European Court of Auditors report assessed how energy taxes, carbon pricing and energy subsidies fit with EU climate objectives (European Court of Auditors, 2022). Energy taxation can support climate efforts, but current tax levels do not reflect the extent to which different energy sources pollute. Renewable energy subsidies almost quadrupled over the period 2008-2019, while fossil fuels subsidies remained stable. Fossil fuel subsidies represent an obstacle to reaching climate goals because they hinder the green energy transition. Overall, across the EU, renewable energy subsidies are higher than fossil fuel subsidies, but Ireland is among 15 Member States that allocate more fossil fuel subsidies than renewable energy ones (Figure 12.10) (European Court of Auditors, 2022).