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FPS is concerned Carbon Tax will affect the most vulnerable in society and those living in rural communities

July 30, 2019

With the Irish Government set to increase the state’s carbon tax from the current fixed rate of €20 per tonne to €80 by 2030 liquid fuels trade association, FPS is concerned this will affect the most vulnerable in society and those living in rural communities.

Poorer households will be impacted the most in terms of disposable income, consumption, price increases and welfare if the Carbon tax increases at the rate planned by the Government. By introducing more expensive heating solutions such as heat pumps and decreasing the options for home heat in rural Ireland either through carbon tax increases or moving consumers to expensive electricity they will have a negative impact on rural households.  This will also be seen as an anti-rural measure due to its dependence on liquid fuel as opposed to urban areas where main gas is available. In the 2016 Census, 36% of the Irish population lived in cities, 34% lived in rural towns and 30% in the countryside. Ireland is thus a very rural country and most of the population is off the mains gas grid.

Chief Executive of the FPS Guy Pulham comments: “Poorer households spend a greater proportion of their expenditure on energy than richer households. FPS is working with trade associations within the heating oil industry in Ireland, to develop a pathway that enables consumers to cut their carbon emissions through a series of planned steps rather than one major heating system change and is calling on the Government to work with industry to introduce biofuels to replace heating oil.

““Initially, using biofuels, consumers can change the fuel and not the heating system as a 30% blend of biofuel with kerosene would work well with current oil boilers and infrastructure. It is also a more environmentally friendly fuel with lower carbon emissions.  Over time, as the blend increases to 100% biofuel, boilers can be replaced – but the transition would enable consumers to cut carbon emissions today without a big financial outlay straightaway.

“We would like the Government to look at adopting best practice available from other EU states on the use of biofuels for heating as well as transport. New fuels from biological or non-biological origin with reduced greenhouse gas emissions, such as advanced biofuels or synthetic fuels (“e-fuels”), can contribute to the success of the energy transition. They represent a future solution for the 686,000 people currently using heating oil within Ireland.

“We have been lobbying the Irish Government and feel disappointed that liquid biofuels for home heating, was not part of the Climate Plan To Tackle Climate Breakdown document that the Government released in mid-June.

“Whilst we fully appreciate the need to cut Ireland’s carbon footprint and encourage people to use cleaner energy alternatives, we are concerned that an increase in carbon tax now will lead to diesel, petrol and heating oil prices rising and possibly to a further increase in the differential between Northern Ireland and the South potentially leading to increased smuggling.

“What’s more frustrating is the Irish Government’s lack of engagement with industry. The continued focus on electrification of heat using heat pumps for those off-grid does not consider the high price consumers would have to pay to change existing appliances.

“Ireland’s housing stock is among the least energy efficient in Northern Europe and many are not suitable for heat pumps – to retrofit would be expensive, especially as so many would need to improve insulation, or the running costs would be too much.

“We’re calling on the Irish Government and the Sustainable Energy Authority of Ireland (SEAL) to meet with heating oil industry trade bodies to develop a pathway for the further development of liquid biofuels for home heating.”

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