Ireland's State of the Environment Report 2024

328 Chapter 12: Environment and Energy Figure 12.10  Level of fossil fuel subsidies compared with renewable energy subsidies ˜ Fossil Fuel Subsidies (FFS) ˜ Renewable Energy Subsidies (RES) ˜ Surplus of FFS Compared to RES ˜ Surplus of RES Compared to FFS 1.0% 0.5% 0.0% 0.5% 1.0% Finland Ireland Cyprus Belgium France Greece Romania Lithuania Poland Bulgaria Sweden Hungary Slovakia Slovenia Latvia Luxembourg Portugal Netherlands Denmark EU-27 Estonia Austria Croatia Malta Italy Spain Germany Czechia Source: European Court of Auditors, 2022; reproduced under the terms of the Creative Commons CC BY 4.0 licence (creativecommons.org/licenses/by/4.0/) 5 www.revenue.ie/en/companies-and-charities/excise-and-licences/excise-duty-rates/mineral-oil-tax.aspx (accessed 9 September 2024). Energy taxes and carbon pricing The importance of carbon pricing in reducing GHG emissions has been recognised across the world, with both taxation and ‘cap-and-trade’ pricing schemes in operation in many countries and regions, including in the EU and Ireland. Evidence of the impact of taxing energy use on reducing energy consumption has been widely published over many years (Labandeira et al. , 2017). While direct energy taxation (e.g. taxes on transport or heating fuels) has been in place in Ireland for many years, a carbon tax was introduced in December 2009 directly related to CO 2 emissions, and has remained in place since then, growing steadily over time. Since 2010, an excise duty, in the form of the Natural Gas Carbon Tax, has been applied to supplies of natural gas. Mineral Oil Tax (MOT) is an excise duty that applies to liquid fuels released for consumption in Ireland for motor or heating purposes. 5 The MOT rates were amended in 2010 to introduce a carbon component in addition to the pre-existing non-carbon component. A carbon tax was introduced for solid fuels in 2013 in the form of the Solid Fuel Carbon Tax, which is applied to coal, peat briquettes, milled peat and other peat supplied in Ireland. The rates applied to the Natural Gas Carbon Tax, Solid Fuel Carbon Tax and the MOT carbon component are proportionate to the amount of CO 2 emitted when the fuel is combusted and are based on charging an amount per tonne of CO 2 emissions.