Government provided €2.4bn in subsidies to fossil fuel industry in 2019

The Irish Government provided €2.4 billion in subsidies to the fossil fuel industry in 2019, according to the Central Statistics Office (CSO).

This was 1 per cent higher than the previous year and nearly 70 per cent higher than back in 2000, when subsidies totalled €1.4 billion.

Fossil fuel subsidies can support either production or consumption activities.

The CSO figures show indirect subsidies arising from revenue foregone due to “tax abatements” accounted for nearly 90 per cent of the €2.4 billion total.

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The single biggest one was the excise duty exemption for jet kerosene used for domestic and international commercial aviation. The revenue forgone from this measure in 2019 was €634 million.

The revenue forgone from the lower excise duty on diesel fuel was estimated at €400 million. There have been several calls for this to be unwound given the higher rate of nitrous oxide (NOx) and particulates (PM) emitted from diesel fumes, both of which have been linked to premature deaths and strokes in humans.

The Government continued to subsidise peat-fired electricity in 2019, which is one of the most polluting ways of producing electricity, through the Public Service Obligation levy on electricity consumers.This amounted to €25 million but that was down substantially on the €66 million previous year.

Peat is still burnt at Bord na Móna's Edenderry power station, which has applied for planning permission to burn biomass instead of peat.

Deadline

While the Government’s National Development Plan envisages a radical overhaul of how the State tackles climate change it only puts a 2030 deadline for the conversion of peat-burning power plants to more sustainable low-carbon technologies.

The ESB last year shut two peat-burning facilities in the midlands – its West Offaly and Lough Ree plants.

Some fossil fuel subsidies provide important social supports. The household electricity allowance was €105 million, and the household fuel allowance was €94 million in 2019.

The latest figures come in the wake of the Government’s new climate action bill that will put the economy on the path to net-zero greenhouse gas emissions by 2050.

The bill seeks to achieve a 51 per cent reduction in Ireland’s emissions by the end of the decade.

The figures also come after a report last week found the world’s largest 60 banks had pumped $3.8 trillion (€3.2 trillion) into the fossil fuel industry in the five years since the Paris climate accord.

The research by several leading climate groups also found that fossil fuel financing was higher in 2020 than in 2016.