The government announced Budget 2021 on Tuesday 13th October with many energy related updates.
The budget announced on Tuesday brings hope for a green recovery in the midst of the Covid-19 pandemic. We have broken down some key takeaways from Budget 2021 with particular focus on the area of energy.
Carbon tax has increased by 7.50 per tonne, with auto fuel immediately coming into effect from Tuesday night (13th October 2020). All other fuels will be in place from May 2021. This carbon tax will increase every year up to 2029.
In terms of energy efficiency and renewable energy, €38 million has been allocated to support projects in the commercial and public sector.
This funding has doubled from 2020 which reflects the government’s commitment in achieving the 2050 goal of becoming a net-zero emission Country.
This year’s Renewable Electricity Support Scheme (RESS) auction brought success to community-led projects and the government have allocated €3 million in capital funding to locally-owned community energy projects.
An Accelerated Capital Allowance scheme for energy efficiency electrical equipment has been extended by 3 years.
The government have pledged that over €221 million in funding will be allocated to retrofit schemes, covering both residential and community projects. €100 million of the allocation will be funded through the carbon tax revenue.
The overall figure stands at €286.5 million, which has been committed to retrofit activity, with the inclusion of social housing projects.
The Warmer Homes Scheme will provide retrofitting grants and the National Home Retrofit Scheme will also provide homeowners the opportunity to upgrade their home’s energy efficiency rating to a B2 standard.
The carbon tax is expected to finance over half of the funding needed for such energy efficiency measures.
Additional funding will be available for 1,500 new places in retrofitting courses.
Vehicle Registration Tax (VRT) & Motor Tax
VRT and motor tax will increase in this Budget in relation to the emissions values from your vehicle. Lower-emitting cars will therefore receive lower VRT rates, with higher tax rates applied to the higher-emitting vehicles. As a result, electric cars will become more competitive as they will have lower motor tax costs.
The VRT reliefs that are in place for electric and hybrid cars will expire as these cars will be receiving the lower rates due to emitting less. NOx surcharge will increase for NOx emitting vehicles.
A 3rd motor tax table will be introduced in 2021 to reflect the new emissions test standards for cars registered from the new year.
Public transport is one area which is set to be allocated an increase. A €1 billion increase in public transport is planned for 2021.
The increased funding will be developing projects such as BusConnects, MetroLink, and the Dart expansion.
Sustainable mobility is a key area in decarbonising the transport sector and up to €1.8 billion will be allocated to improve public transport; carbon reduction programmes; active travel; and greenways.
2030 Regional Energy Transition Strategy
In January 2020, we launched our 10 year Regional Energy Transition Strategy. 3cea welcome the announcement of this Budget as it highlights the important low carbon choices that we will have to make to reach our goal of transitioning to a low carbon region by 2030.
To achieve the 2030 targets, we all must work together to deliver energy efficiency, clean energy, behaviour change and ultimately greater sustainability – this is what the Regional Energy Transition Strategy to 2030 seeks to address.