Failure to act on climate could cost Ireland €13bn, fiscal watchdog says, calling for road charges to replace fuel taxes

The €13bn climate bill

Ireland could face a budget hit of up to €13 billion by 2050 if it stalls on climate measures, the Irish Fiscal Advisory Council (Ifac) has warned. A credible plan costing around €4 billion (less than 1% of gross national income) would shield the public finances, it said. The watchdog urged domestic investment in home retrofits, public transport, renewable energy and the electricity grid to lower living costs and protect the economy.

We can wait for global action and leave our economy exposed to big budget risks and volatile energy prices. Or we can take control by investing in our own homes, transport, and energy networks.

The EV tax gap

With more than 200,000 electric cars already on Irish roads and a national target of 30% of the fleet electric by 2030, revenues from fossil fuel duties are set to decline. Ifac said the current uptake rate is so slow it would take over 30 years to hit the 2030 goal, and it called on the government to devise a strategy for replacing the lost income. The council proposes congestion charges and distance-based road pricing, introduced gradually. It suggests starting with proxy charges based on odometer readings or vehicle weight before moving to real-time pricing. The body stressed this does not mean increasing the overall tax burden, only changing the way travel is taxed.

Replacing these taxes does not mean increasing the overall tax burden on average taxpayers. It means changing the way taxes are levied on travel.

EV charging prices surge

As the tax debate unfolds, the cost of running an electric car is climbing at the plug. ESB, the country’s largest public charging network, has raised pay-as-you-go rates by up to 14%, with rapid charging now reaching 73c per kWh. The operator blamed rising energy and operational costs. The move follows a price hike by Ionity, whose high-speed chargers at Circle K stations now cost 85c per kWh on a pay-as-you-go basis. According to the Society of the Irish Motor Industry, EV sales are up 54% this year, with electric cars holding 23% of the new car market.

Scrappage scheme launches

The government’s ICE2EV scheme opens on 1 July, offering a €5,000 grant to drivers who scrap a petrol or diesel car that is 13 years or older and buy an EV. The initiative, the first state-backed scrappage scheme in 16 years, is heavily oversubscribed and limited to about 2,000 recipients on a first-come, first-served basis, weighted 65% towards rural areas. A further €3,500 is available through the Sustainable Energy Authority of Ireland, although that amount is already reflected in forecourt list prices. Transport minister Darragh O’Brien has indicated the scheme may be widened. However, motoring columnist Neil Briscoe argues the government should instead focus on shoring up confidence in the used-EV market, where battery longevity and residual values remain concerns.