Budget brings short-term relief ‘but not the energy revolution we need,’ says environmental NGO

The overall budget package “lacks the scale and urgency to drive the energy revolution we need to get off unreliable, skyrocketing fossil fuels for good”, according to Friends of the Earth.

While it welcomed some short-term measures, its analysis found Budget 2023 was a missed opportunity to accelerate the transition to renewable heating through measures such as removing VAT on heat pumps or insulation materials. While it was positive to see a tax credit for renters, there was no clear energy efficiency funding allocated for the private rental sector, it noted, while some of anti-poverty measures including fuel allowance adjustments were insufficient given the scale of the energy crisis.

Chief executive of Oisín Coghlan said: “It doesn’t go far enough or fast enough to get us off fossil fuels for good. The extra money for retrofitting next year is welcome but the target of 37,000 houses is far too low. This is an emergency. We should be insulating 100,000 houses before next winter.

“And the Government should be telling the Sustainable Energy Authority of Ireland to sit down with the likes of the SVP [St Vincent de Paul] and Age Action to make sure we reach those most in need. A first-come, first-served grant scheme isn’t good enough,” he added.

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Continuation of the 20 per cent fare reductions for public transport for 2023 was positive but it should be permanent as “it can be a game-changer”, Mr Coghlan said.

“The €360 million a year for cycling and walking infrastructure is good but local authorities have been failing to spend it. He welcomed the move to put solar panels on the roofs of every school which will cut their energy bills. “They can sell the electricity they don’t use to the grid and it will involve communities up and down the country in the positive energy revolution we need.”

The Irish Solar Energy Association (ISEA) said the budget failed to address the root causes of high energy costs.

“The generation of solar energy is going to be central to decarbonising our electricity supply and removing our dependence on sourcing fossil fuels from overseas,” ISEA chief executive Conall Bolger said.

“Ireland’s target of delivering 5.5 gigawatts of solar by the end of the decade is ambitious but possible, provided we have the correct policy framework in place. Budget 2023 failed to make progress on creating that framework and will make reaching that target more challenging,” he added.

The failure to eliminate or reduce VAT on solar equipment was disappointing, he said. “This simple measure had the potential to reduce the costs for homeowners who want to invest in generating their own clean, green electricity. Despite a new EU directive facilitating this reduction the Government have failed to act, this ensures that at a time of crisis Ireland continues to tax the solution.”

The ISEA also criticised the failure to announce an extension of agricultural relief to farmland which contains solar farms. “Approximately 25,000 acres of land is required to deliver our solar targets, land which remains usable for agricultural purposes. Solar could provide a new revenue stream for many farmers but this flaw with the tax system is a major disincentive and is placing an artificial constraint on the availability of land for use in solar farms,” he said.

Mr Bolger criticised provision of three €200 electricity credits as short-sighted. People clearly needed help with their electricity bills this winter and this credit would provide help but it did nothing to address the causes of soaring costs, he pointed out.

“We cannot continue to invest heavily in treating the problem while consistently ignoring its causes. This credit should have come hand-in-hand with measures that reduce our dependence on fossil fuels. We may be seeing this credit for many more winters unless we get serious about reducing costs,” Mr Bolger said.

The ICMSA said the budget had sent “mixed messages” to farmers trying to invest in environmental improvements. Its president Pat McCormack said that while the accelerated capital allowances available for slurry storage was meant to give momentum to those ready to engage with contractors, the decision to put a 10 per cent levy on the kind of concrete products that would be used effectively negated the benefit of changing the capital allowances, as well as undermining the TAMS scheme.

“It’s already obvious that the combination of both these measures is going to end up with them cancelling each other out,” he added.

“We don’t think it would tax any legislator or civil servants’ ingenuity to make the distinction between these environmental projects and other general building work. Increasing slurry storage capacity and other on-farm environmental improvements should be exempt from the mica levy,” Mr McCormack said.

“There wouldn’t be any serious objection to it because — as the Government itself says — environmental improvements to farms are an absolute requirement if we are to even consider achieving the 25 per cent reduction in agri-emissions that they have deemed a national priority.”