The Minister for Finance has announced climate-related tax measures in Budget 2024, including extending the accelerated capital allowances scheme for energy efficient equipment for a further two years.
Minister Michael McGrath said he is doubling the tax disregard in respect of personal income received by households who sell residual electricity from micro-generation back to the national grid.
From 1 January 2024, an income disregard of up to €400 per year will apply to profits or gains arising to a qualifying person from the micro-generation of electricity. It will provide relief from income tax, USC and PRSI.
The reduction of the VAT rate on the supply and installation of solar panels for private dwellings to zero will be extended to schools with effect from 1 January 2024.
The VRT relief for battery electric vehicles has been extended for a further two years to the end of 2025. This relief applies to battery electric vehicles with a value of up to €50,000.
The rate per tonne of carbon dioxide emitted for petrol and diesel will go up from €48.50 to €56.00 from 11 October as per the trajectory set out in the Finance Act 2020.
The minister confirmed that all of the revenue raised from this increase in carbon tax will be used to ensure the most vulnerable are protected from unintended impacts of the tax increase, to part fund a socially progressive national retrofitting programme, and to encourage and support farmers in the green transition.
SIMI Director General Brian Cooke welcomed the extension of the current VRT and Benefit-In-Kind reliefs for Electric Vehicles. "The retention of the current VRT regime allied with the EV reliefs provides stability and clarity to the Motor Industry and motorists at a time of great uncertainty."
€380m to residential and community energy schemes
Minister for Public Expenditure Paschal Donohoe said that Budget 2024 provides funding for the staffing of agencies to support the delivery of the target of meeting 80% of Irish electricity needs from renewable resources by 2030.
Mr Donohoe said that to help households with the green transition, today's Budget provides a record €380m to residential and community energy schemes.
He said this will reduce both greenhouse gas emissions and people's energy bills.
Funding will also be provided to accelerate community-based partnerships to deliver energy savings and for solar supports that will allow households to profit by selling electricity back to the grid, he added.
A new low interest loan scheme was also announced today, which will work alongside the Sustainable Energy Authority of Ireland grants to allow everyone the opportunity to benefit from energy savings.
Mr Donohoe told the Dáil that an additional €165m of Carbon Tax revenues will be available in 2024 to support a just transition and address fuel poverty.
He said this will bring the total Carbon Tax revenue available for investment to €788m - almost half of this - €380m - will be invested in improving the energy efficiency of our homes.
The minister also said that the Carbon Tax will fund €262m of Social Protection spend next year, while an additional €32m in carbon tax funding will be provided to the Department of Agriculture, Food and the Marine next year to support up to 50,000 farmers to improve biodiversity, climate, air and water quality outcomes.
