The Tánaiste has indicated a VAT cut on energy is no longer on the table.
Speaking during Leaders' Questions in the Dáil, Leo Varadkar told Sinn Féin that a reduction "is not possible" following discussions with the European Commission.
He said there had been engagement with the Commission by the Minister for Finance Paschal Donohoe and Taoiseach Micheál Martin on a potential cut to VAT rates.
"We have one of the lowest VAT rates in Europe," he said.
"We are already down to one of the lowest possible in terms of excise on petrol and diesel and at the moment."
He added if the Government were to cut VAT from its current rate of 13.5% to 12% when the Government had to raise VAT it would have to revert to 23%.
Mr Varadkar said the Government would introduce measures to offset the planned increase to the carbon tax before May.
He was responding to Sinn Féin's Finance spokesman Pearse Doherty who called for an emergency budget to tackle rising energy prices.
He pointed out that Ireland's annual inflation rate is currently running at 6.7% and home heating oil is up 127% over the past year.
He called for a comprehensive package to tackle higher energy prices including for social welfare rates to be increased.
The Tánaiste also told the Dáil that the most recent Intergovernmental Panel on Climate Change (IPCC) report - which is "very alarming" - did not get the attention it deserved, due to the war in Ukraine, the pandemic and the rising cost of living.
Mr Varadkar said that we can lose sight of the climate "mega-crisis" as we handle other crises.
"The difficulty that we are going to run into with retrofitting, quite frankly, is having the skills and the staff to make it happen," he added.
"We will find it difficult to spend the money that we have allocated towards retrofitting," Mr Varadkar insisted.
He was responding to Independent TD Joan Collins who said that the "alarming" report has been overshadowed by recent events.
Deputy Collins said that the "empty promises" of capitalism are preventing the aversion of a climate catastrophe.
Mr Varadkar pointed out that command economies produce a lot of carbon, while capitalism can innovate, as is evidenced by green technologies.
Additional reporting Paul Cunningham
