Just Transition and Energy Security

Budget 2023 was a missed opportunity to invest in and secure our energy infrastructure, progress the implementation of the Climate Action Plan and ensure a just transition to a green economy.  While there are some welcome measures in Budget 2023, and a number of one-off measures for households and businesses to address increasing energy costs, Government failed to put social investment and just transition at the core of economic policy. 

 

We welcome the €2.6m to  support delivery of the Circular Economy Strategy including the introduction of a deposit and return scheme for aluminium cans and plastic bottles, the increased funding for the Environmental Protection Agency,  retrofitting and solar panel installation but we regret the lack of progress on improving access to the RESS auction and enhancing our storage capacity.

Energy is one of the key drivers in the increased cost of living.  While Government announced a further three universal, untargeted energy credits as part of a cost of living package at a total cost of €1.2bn, the budget itself contained limited measures to address the cost of energy in the long-term and energy poverty.   The expansion of the fuel allowance eligibility criteria is welcome, but we regret that the payment was not extended to 32 weeks as proposed. 

An extension of the one-off energy credit will not solve the cost of living challenges many face, particularly those in energy poverty.  A more appropriate use of this substantial level of resources would have been to implement the OECD recommendation to redesign the fuel allowance, delink it from heating fuels, update and expand the eligibility criteria and provide it to eligible households during the whole year.  This would provide a tool for Government to target and support rural and low income households (those impacted most by rising energy costs) now and in the years ahead as policies to meet the targets set out in the carbon budgets are implemented. 

In order to meet our own energy targets, to increase our renewable energy supply and to deliver long-term sustained reductions in energy costs Government must invest in renewable energy.  In terms of energy supply, storage and security, Social Justice Ireland is disappointed that Government did not divert existing fossil fuel subsidies to renewable energy. Such a move would have front-loaded the renewable sector’s development while supporting the Government’s aim to cut long-term energy costs for homes and businesses.

Virtually all businesses continue to contribute to national climate targets through carbon taxes and challenging sectoral emissions ceilings. The exception is the highly profitable aviation industry. Social Justice Ireland is disappointed that Government did not take this opportunity to implement the recommendation of last December’s Report on the Impact of Aviation Taxation to scrap the exemption of Jet Kerosene from excise and carbon tax.

One of the fundamental principles of a Just Transition is to leave no people, communities, economic sectors or regions behind.  This principle was absent from Budget 2023.