Budget 2007


Environmental sustainability central to Government economic policy

"The comprehensive package of environmental measures contained in the Budget demonstrated that the environment is now at the centre of Government economic policy" - Minister for the Environment, Heritage and Local Government, Dick Roche, T.D.

The Minister was commenting on Budget 2007. "We saw, today, the bringing together of the most comprehensive package of environmental measures ever announced in a Budget. This package cuts across all major economic sectors. It shows that the environment - and, in particular, Climate Change - is not just an issue for one Government Department, but is a matter which extends across the full breadth of Government."

In his Budget Statement on 6 December 2006, the Minister for Finance announced a number of measures focused on the environment and sustainability, including -

  • Proposals for linking VRT and the motortax system to carbon emissions and mandatory carbon emission labelling;
  • A new tax break of 50% VRT relief for electric cars, building on last year's initiative on hybrid cars;
  • Abolition on excise reductions for kerosene and LPG used in home heating;
  • A commitment to purchase up to 270 million Carbon Credits;
  • A new enhanced Rural Environmental Protection Scheme, including a 15% increase in Forest Premiums (another contribution to our Climate Change objectives) and 17% in REPS payments to assist the implementation of the Nitrates Programme in support of improved water quality;
  • New support for bio-energy crops including -
    (i) New establishment grants for Willow and Miscanthus (Elephant Grass)
    (ii) a large increase in support for growing bio-fuel crops - an Exchequer top-up of 80 per hectare on top of the EU support of 45 per hectare - and
    (iii) new grants for the purchase of harvesting machinery for bio-crops;
  • A continuation of bio-fuels relief;
  • Additional funding, amounting to 20 million between now and 2009, for the very popular Green Homes initiative, which support the installation of new energy technologies such as solar panels, bio-mass burners and heat pumps;
  • The extension of the bio-heat scheme for the commercial sector to include the provision of grants for other technologies - such as solar panels - and an extension of the scheme to community and sports centres at a cost of 4 million in 2007;
  • The introduction of a new pilot scheme by Sustainable Energy Ireland for energy efficiency programmes in the Small and Medium Enterprise sector at a cost of 3 million;
  • Corporation Tax relief for investment in renewable energy is being extended for a further 5 years;
  • Additional support for selected local authorities for the operational costs of new waste water treatment plants - in support of national policy which has seen Ireland's waste water treatment standards surpass 90% from only 20% 6 years ago.

Minister Roche pointed out that Ireland can best meet its Climate Change obligations by working on a wide range of initiatives -

  • Major industry plays its part by the obligations placed on it by the European Emissions Trading System;
  • The Government, in turn, is taking action across the economy to reduce greenhouse gas emissions elsewhere - for example, through the Budget's incentives for the production of bio-fuel crops, the proposed readjustments to the VRT and Motor Tax system and enhanced Green Home incentives, etc. - and
  • Through the long-term commitment to purchase Carbon Credits - allowing Ireland to support clean technology in developing nations, while cutting down on global greenhouse gas emissions.

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