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Budget 2020, Giving Ireland a Sustainable Future

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Budget 2020, Giving Ireland a Sustainable Future

Carbon Tax ring-fenced to deliver climate action and protect most vulnerable

Climate Action Plan rollout funded, Just Transition Commissioner announced

Retrofitting & bog restoration in Midlands deliver 500 jobs

Investment in broadband, digital skills​​​

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"We are taking the actions needed now, to secure a sustainable, resilient Ireland for future generations,'' the Minister for Communications, Climate Action and Environment Richard Bruton T.D. said today  (Tuesday the 8th of October) as Budget 2020 puts major focus on climate action.

Every home, farm, school and business in Ireland will have access to high speed broadband – no matter where they are located, with €119m allocated to begin delivery of the National Broadband Plan.

Minister Bruton, together with Minister of State Sean Canney T.D. held a press conference today to unveil the details of Budget 2020 measures. 

Climate Action Plan Rollout - Key Points

  • Transition to Electric Vehicles:  Government grants have supported a 5 fold increase in electric vehicle purchases since 2016. Budget 2020 will see €36m allocated in 2020 (compared €18m in Budget 2019) to further incentivise uptake. We will double the number of home chargers installed and the fast charger network will also double in 2020. We will further rollout the nationwide network of on-street chargers.
  • Warmer Homes, Cheaper Energy Bills: In 2020, an allocation of €146m (€29m increase on 2019) will be used to upgrade 24,000 homes and businesses. This is a nearly 3 fold increase on 2016 funding. A new Retrofitting model will deliver upgrades to large groups of houses at the same time to drive down cost, develop easy pay back mechanisms making the works easier and more affordable. This work will commence in 2020 with a programme targetting social houses in the Midlands.
  • Radical Action on Waste: A radical new waste strategy will be developed in 2020. Increased funding for anti-dumping initiatives will be maintained, with €3m from the environment fund ring-fenced to help communities tackle illegal dumping. A further €12m is being allocated in 2020, including a significant landfill remediation project.
  • Decarbonising our Energy Supply: €3.7m to support installation of solar panels on homes. €9.7m to support emerging technologies which harness the power of the Ireland's ocean resources and research into how we can move away from fossil fuels, while ensuring energy security. €5m to support the uptake of alternative fuels such as biomass in the heat sector. A new Scheme will be launched by the end of the year which will see a 60% increase in the amount of renewables on our grid.
  • Protecting Our Environment: €59.4m to support the sustainable development of Ireland's natural and inland fishery resources

Carbon Pricing

In accordance with the advice from the Climate Change Advisory Council which has said that carbon pricing is essential to delivering on our climate targets, and as agreed by the Joint Oireachtas Committee on Climate Action, the government are committed to increasing the price of carbon to €80 per tonne by 2030.

Budget 2020 will see a €6 increase in the price of carbon, all of which will be ring-fenced to support climate action and protect those most vulnerable. Over the next decade this will raise more than €6 billion to be used in this way.

This government is committed to small increases year on year to give people time to plan and to avoid a big hike in any one year.

Minister Bruton said:

"The independent Climate Change Advisory Council have said that increasing the price of carbon is essential if we are to hit our climate targets. However, carbon pricing is just one part of the solution. At set out in the Climate Action Plan, we must also scale up our production of renewables, increase the level of retrofitting, electrify transport and introduce changes to make our land use more sustainable."

Protecting the most vulnerable

Minister Bruton said, 

"I am acutely aware of the impact that moving away from fossil fuels will have on some people. Just transition and protecting the most vulnerable is at the heart of the Climate Action Plan. Budget 2020 will support those most affected."

The transition away from peat, towards more sustainable, renewable energy sources, will have a significant impact on the Midlands and Bord na Móna workers. Minister Bruton will shortly announce further details of a comprehensive, all of government response to support the region through the transition.

Just transition

  • €6m Just Transition Fund targeted at the Midlands. This funding will support retraining and reskilling workers and assist local communities and businesses in the midlands to adjust to the low carbon transition. There will be further consultation with the structures in place in the Midlands, including the Midlands Transition Team, on the application of the funding.  
  • €5m for bog restoration and rehabilitation which will restore bogs to their natural habitat and become sinks that absorb carbon. This programme will support the National Parks and Wildlife Service (NPWS) to restore  1,800 hectares of bog in 7 counties, resulting in 28m tonnes of carbon stored over the next 5 years. It will create 70 jobs in year one rising to 100 as the programme develops.
  • €20m to deliver new model to group housing upgrades together as set out in the Climate Action Plan. Targeted at the Midlands, this will support an estimated 400 jobs directly and indirectly, as well as significantly upgrading  the social stock in the region during 2020.

 

In addition Minister Bruton announced that a Just Transition Commissioner will be appointed. The Commissioner will engage with all relevant stakeholders in the Midlands including Bord na Móna, the Midland Regional Transition Team, as well as the National Economic and Social Council (NESC).  This appointment will be part of the government's just transition plan, which is currently being led by the Department of an Taoiseach.

 The Midlands will also be supported to draw down other Funds which are central to switching to a decarbonised economy

Protecting the most vulnerable

  • A total of €52.8 million is being made available to retrofit the homes of people living in or at risk of energy poverty through the Warmer Homes Scheme.  This represents the biggest ever allocation for the Warmer Homes Scheme – more than double the initial allocation for 2019.  €13 million of this funding is ring-fenced revenue arising from the increase in the Carbon Tax.  

 

  • The changes to the Fuel Allowance Scheme led by the Department of Social Protection, will increase the income of households who get the fuel allowance by €2 per week which means an annual increase of €56. 

The ring-fenced fund will also be used to fund climate measures, such as: new greenways & urban cycling pathways, pilots for sustainable agricultural measures, an increased contribution to the Green Climate Fund and extra investment in charging network and grants for electric vehicles.

 

Minister of State for Natural Resources, Community Affairs and Digital Development Sean Canney T.D. said,

 "I very much welcome that the vision articulated earlier this year in the Government's Climate Action Plan is now being brought to fruition with increased investment in areas like electric vehicles and building retrofitting. The principle of Just Transition is another vital element in moving from brown to green energy and it underlines our commitment to that principle that we are providing substantial support for our peat-producing regions and Bord na Móna in particular."

The National Broadband Plan

The government is committed to bringing high speed broadband to the 1.1 million citizens, mainly in rural Ireland who are currently without service. Budget 2020 includes an allocation of €119m for the National Broadband Plan, which will fund the first year of deployment.

High speed broadband for all citizens is particularly crucial in the context of Brexit. The National Broadband Plan will act as a key enabler for the development of new businesses in regional and rural Ireland, together with an increased opportunity for people to work from home, reducing commute times and the associated climate impacts. By the end of 2020, 300 'Broadband Connection Points' will have rolled out, with at least 7 in each county, establishing digital work hubs across the country.

Minister of State Canney T.D. said,

"Investment in the National Broadband Plan across the length and breadth of Ireland will mean that no citizen will be left behind. This is critical and the funding provided will kick start the biggest investment in this country since rural electrification."


Other measures

  • Bringing SMEs Online: 1,250 small businesses will continue to be supported to build their online presence through the Trading Online Voucher scheme.   30% of Irish SMEs now sell online and 17% sell cross border, well above the EU average of 17% and 8% respectively.  Furthermore, 26% of the total turnover generated by SMEs comes from online sales, more than double the EU average of 10%.  
  • Digital Skills: Nearly 50,000 people have been supported to improve their digital skills since training under the Digital Skills for Citizen Programme commenced in 2017. A further 25,000 people will be supported in 2020.

Minister of State Canney said,

"As Minister for Digital Development, I very much welcome new supports for digital skills. Twenty five thousand additional citizens will be supported by the Digital Skills for Citizens Programme and 1,250 small and medium enterprises will be supported to develop their online presence."

Budget 2020 provides a €105.7m or 16% increase in funding, resulting in a total allocation of €773m for the Department of Communications, Climate Action and Environment.  

Notes for Editor

The Climate Action Plan is the government's plan to ensure Ireland reaches the 2030 emissions targets, putting us on a trajectory to be net zero emissions by 2050. The far-reaching plan sets out over 180 actions, together with hundreds of sub-actions across every sector of society. Under the plan, we will deliver: 

  • 5 Times the amount of renewables connected to the grid
  • 10 Times Retrofit Activity
  • 50 Times Current Electric Vehicle Uptake
  • 5 Times Sustainable Energy Communities
  • 500,000 Extra daily active / public commutes
  • 250 Million Extra Trees

Electric Vehicle Purchase Grants

Additional funding of €8m has been allocated for electric vehicle purchase grants from the Carbon Tax.  €14M total additional funding for electric vehicle grants has been allocated in Budget 2020. This will ensure that the grant of up to €5,000 for individuals purchasing an electric car and the grant of up to €3,800 for businesses purchasing an electric van will continue. 

As the whole life costs of EVs reduce, the targeting of Government grant support must be adjusted to reflect this. Accordingly, the grant of up to €3,800 for businesses purchasing an electric car will be discontinued; the generous benefit-in-kind tax relief that is available for these vehicles is considered adequate incentive to drive growth in this sector. 

The range and emissions standards for plug-in hybrid electric vehicles will also be changed with the minimum battery range increasing from 20km to 50km and the maximum emissions reducing from 65 to 50 gCO2/km.

These changes will apply to all applications received from Wednesday 23 October. This gives consumers two weeks to apply for purchase grants under the existing rules – provided that the vehicles are licenced and the grant claimed before the end of 2019. 

Electric Vehicle Charging Infrastructure

A further €3m has been allocated for new electric vehicle charging infrastructure from the Carbon Tax (€6m total allocation for charging network for the Department of Communications, Climate Action and Environment in 2020). This is in addition to €10m support to develop the public charging network from the Climate Action Fund.

A total of €1.5m of funding is provided to the Department of Transport, Tourism and Sport to roll-out fast charging points to taxi ranks at transport hubs around the country. This will complement the grants for taxi drivers who wish to switch to an electric vehicle.  

In addition, next year we will introduce new regulations to require new buildings with more than 10 parking spaces to provide for the installation of charging points and, from 2025, non-residential buildings with over 20 car parking spaces to install charging facilities.   

Increasing the Carbon Price:

The Climate Change Advisory Council in their 2018 annual report recommeneded that having a carbon price of €80 in 2030 was essential if we are to reach our climate targets.

At a recent meeting of the Budget Oversight Committee, the Chairperson of the Climate Change Advisory Council stated:

"a massive body of evidence from across the world shows that carbon taxes are essential. There are very few carbon tax deniers in the economics community. A recent statement by a large number of American economists, including 27 Nobel prize winners, identified carbon taxes as essential for the US and the world."

The Joint Oireachtas Committee on Climate Action, which worked for months to establish a broad cross party consensus on a number of difficult issues, included a recommendation in favour of increasing the carbon tax to €80/t by 2030.

 

The government then adopted a similar commitment in the Climate Action Plan, as one action of the over 180 actions in the Plan. In so doing, the Joint Oireachtas Committee and the government have acted on the best advice of the Climate Change Advisory Council.

 

 

Ring Fencing the Carbon Price

The increase in the Carbon Price is supporting the implementation of key measures in the Climate Action Plan. The measures which are being funded are set out below.

Increased Carbon Tax Spending – 2020  
€ m - 2020€ m - 2020Department
Revenue Raised by a €6 carbon tax increase                                                         90 
Protecting the Vulnerable  
1. Fuel Allowance  21DEASP
2. Energy Poverty Efficiency Upgrades13DCCAE
A Just Transition  
3. Aggregated Housing Upgrade Scheme 20DHPLG
4. Peatlands Rehabilitation 5DCHG
5. Just Transition Fund  6DCCAE
Investing in the Low Carbon Transition  
6. Greenways/Urban Cycling 9DTTAS
7. Continuation of Electric Vehicle Grants  8DCCAE
8. Further Investment in EV Charging Infrastructure  3DCCAE/DTTAS
9. ODA - Green Climate Fund 2DCCAE
10. Green Agricultural Pilots  3DAFM
Total Expenditure 90 

 

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