Farm fuel subsidy and carbon tax
Paul Lawless says the fuel support package for farmers and contractors is too slow, capped and inadequate, and argues carbon tax should have been scrapped for immediate relief. The Taoiseach defends the scheme as comprehensive and costed, rejects the call to abolish carbon tax, and says the revenue is needed for climate, energy efficiency and retrofitting.
We are now over a month since the fuel protests and not a single cent of the Government’s fuel subsidy has been paid out to farmers and contractors. This scheme was announced to great fanfare to quell the protests, but the application process only opened in recent days. Farmers and contractors still do not know how much they will qualify for because the scheme is capped. The window for applications closes on 27 May, which is during one of the busiest times for farmers, contractors and accountants when they are buried with paperwork, basic income support for sustainability scheme, BISS, applications, VAT returns, etc.
The scheme itself is deeply unfair. Applicants must produce receipts for the entire 12 months of the year. They are then paid a subsidy based on five fifths of their returns from the previous year.
Farmers do not use fuel evenly across the year. It is heavily concentrated in the spring and in the summer, at a time when silage needs to be cut, fields need to be ploughed and tilled and crops are harvested. Calculating the payment on a monthly average from the previous year is deeply wrong. It is systematically flawed and unfair on farmers.
I want to turn to the figures around the carbon tax. The statistics released to Aontú in replies to parliamentary questions tell a very different story to the narrative that the Taoiseach's Government is selling. The Government is on track to collect an additional €200 million more this year than last year. We also know that half a billion euro was collected in carbon taxes from 2020 to 2023 that was never spent on climate action measures. Essentially, half a billion euro is left over and not needed. The NORA levy is another tax that has generated half a billion euro since 2020. That account sits in surplus in the region of a quarter of a billion euro. This is a surplus of €278 million at a time when farmers are desperately crying out for help, at a time when margins in the agri-sector have never been as tight, at a time when inputs are going sky high and revenue is falling.
Is the Government misleading the House in relation to carbon taxes and the necessity that the Taoiseach outlines? If it is all so necessary, why is so much money sitting in surplus? Why is so much carbon tax remaining unspent?
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Does the Taoiseach accept that the fuel subsidy package is totally inadequate for farmers and contractors?
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First of all, ní aontaím leis an Teachta. Pacáiste cuimsitheach atá ann i dtaobh na feirmeoirí agus na daoine atá ag obair san fheirmeoireacht. Suas le €100 milliúin atá i gceist le haghaidh na míonna sonracha. I do not accept the Deputy's proposition that the fuel subsidy scheme for farmers and agricultural contractors is inadequate. It is a comprehensive scheme that was worked out in discussions with representative organisations. There has to be some methodology attached to it. The Deputy has not come up with any alternative but there has to be a clear methodology designed. The Minister for agriculture has worked with the agricultural organisations and the representative organisations in respect of that and every effort will be made to support farmers and contractors in that regard. The Minister for Transport on the other hand is dealing with the haulage industry, which is also critical. It is endeavouring to base it on previous usage, which I think is reasonable, because that would give us some indication of the needs and the additionality in terms of the costs that have undoubtedly been incurred because of the war in Iran and the increase in fuel prices globally as a result of that.
The revenues from the carbon tax are used to support lower-income households, farmers, and indeed the retrofitting programme itself. Since 2020, €4.2 billion has been allocated from carbon tax revenues for all of those purposes. The ESRI analysis shows that lower-income households are net beneficiaries due to accompanying social protection measures. For example, in 2025 there was some €558 million for residential and community upgrades, including solar PV. That was a significant increase on the previous year. There was about €350 million for welfare measures this year - working family payment, child support payment, and the extension of fuel allowance eligibility - all coming from the revenue from the carbon tax. The Deputy has been a big advocate for the fuel allowance and has been saying we should increase it even more. This substantial revenue comes from the carbon tax revenue.
In agriculture, €173 million has been allocated to farmers through agri-environmental schemes, including funding for ACRES under the CAP strategic plan. Between 2020 and mid-2025 about €366 million was allocated to agri-climate supports - to farmers, basically - through a variety of schemes.
That is income to farmers. The ACRES scheme alone is about €1.6 billion and the bulk of that is from the Exchequer.
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The very clear methodology we outlined over the fuel protest was to scrap carbon tax because that would have provided an immediate relief to farmers and contractors who desperately needed it. Instead we are now a month on from the fuel protest at a time when the cost of fuel is still very high. Green diesel is still extraordinarily high in terms of last year's figures and there has been no relief and many farmers have no idea when they will receive that relief. That is what the Government should have done. It should have removed the carbon tax. The Taoiseach's has made the point on many occasions that the carbon tax is necessary. The actual data says otherwise. Some €500 million is unspent in relation to carbon charges. Is it the Government's intention to increase carbon tax year after year, irrespective of the price of fuel? Is it the Government's intention to increase carbon tax again this October?
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If the Deputy wants to scrap it entirely, just like that, it would be huge money. Has he costed that?
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Where is the Deputy going to find it? I am asking the rhetorical question. He will ask for another billion somewhere else, and another billion somewhere else, and another billion over here. That has been Aontú's performance all year.
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Aontú expects us to magic up money for farmers, magic up money for those on social protection and magic up money for tax cuts for working people. We have to magic all that up as well. We have to magic up money for education, magic up money for social protection and keep abolishing any tax that exists. That is Aontú's approach. It is fantasy land.
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You are not living in the real world. We will spend all of the carbon tax revenue-----
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It is one third of the children's hospital overrun.
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-----on vital areas to do with climate, energy efficiency and retrofitting. That is the thing to do, and farmers as well, by the way.
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Before I move to the Chief Whip, I welcome on behalf of Deputy John Clendennen the ACCS all-Ireland debating champions from Gallen Community School in Ferbane, County Offaly. I am sure you are learning a lot here. I would also like to welcome Scoil Mhuire Buncrana, who are guests of Deputy Padraig Mac Lochlainn.