Darren O'Rourke (Meath East, Sinn Fein)
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59. To ask the Minister for Communications, Climate Action and Environment if he is aware of the findings in the 2023 report from the Comptroller and Auditor General (details supplied) that 39% of carbon taxes collected are not accounted for; if he can account for how his Department spent all of its carbon tax; the amount unspent or unaccounted for in 2023; and if he will make a statement on the matter. [41374/24]

Darren O'Rourke (Meath East, Sinn Fein)
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I want to ask the Minister if he is aware of the findings of the 2023 report from the Comptroller and Auditor General which states that 39% of carbon taxes collected are not accounted for. Can the Minister account for how his Department spent its carbon tax, the amount underspent or unaccounted for in 2023 and make a statement on the matter?

Eamon Ryan (Dublin Bay South, Green Party)
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The programme for Government committed to allocate revenues raised from the increase in carbon tax rates out to 2030 to ensure that the increases in the carbon tax are progressive by spending €3 billion on targeted social welfare and other initiatives to prevent fuel poverty and ensure a just transition, to provide €5 billion to part-fund a socially progressive national retrofitting programme and to allocate €1.5 billion of funding to encourage and incentivise farmers to farm in a greener and more sustainable way.

Between 2020 and 2023, my Department was allocated €660.5 million in carbon tax funding, of which €482.1 million or 73% was spent. The underspend was largely due to the significant challenges faced by the residential and community energy retrofitting programmes due to the impact of Covid-19 and supply chain constraints. In 2023 specifically, €299 million in carbon tax was allocated to my Department, of which more than €262 million or 88% was spent.

Over the period, carbon tax has been invested in the SEAI’s residential and community energy efficiency schemes which have delivered nearly 108,000 home energy upgrades, of which more than 33,860 were to a B2 building energy rating and more than 14,200 of which were free to homeowners at risk of energy poverty. In the same period nearly 9,500 heat pump installations have been supported.

Carbon tax has contributed to Ireland’s overall contribution to the Green Climate Fund. The fund supports the efforts of developing countries to respond to the challenge of climate change. It was also allocated to the national just transition fund, which has supported 56 locally led projects in the most affected areas, generating sustainable business and employment opportunities and reskilling workers to engage with the green economy.

In 2020, carbon tax funding was allocated to my Department to fund the continuation of electric vehicle grants and investment in charging infrastructure. In 2021, responsibility for these two programmes transferred to the Department of Transport.

Darren O'Rourke (Meath East, Sinn Fein)
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I thank the Minister for the reply. I am sure he has seen the Comptroller and Auditor General's report which indicated that 39% of the carbon tax increases are not accounted for. The Minister outlined a 73% spend by his Department between 2020 and 2023 and that, in 2023 alone, there was an underspend in the region of €37 million.

On the Comptroller and Auditor General's report, let us park positions on carbon tax and the difference between the Green Party and Sinn Féin. Surely we can agree that the issues highlighted by the Comptroller and Auditor General are concerning, that this funding has not been spent, has been returned to the Department of Public Expenditure, NDP Delivery and Reform and the Department of Social Protection and has not been properly accounted for. We do not have carbon tax headings in our accounting systems in various Departments and we cannot track whether money is being spent where it is supposed to be.

Eamon Ryan (Dublin Bay South, Green Party)
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The Covid-19 pandemic was the main reason. It is not rocket science that during that period we were not allowed to build anything. We were not allowed to go into another house. Nothing could be retrofitted because people could not go outside a 2 km or 5 km radius. It took some time to ramp up from that but we have really ramped up. We will spend all the money this year and next year. There is a reasonable, clear and understandable explanation for why there was a significant underspend.

Regarding reporting, the money does not disappear. It goes back to the Department of Public Expenditure, NDP Delivery and Reform which has its procedures. The Comptroller and Auditor General will have to raise this with the Secretary General in the Department of Public Expenditure, NDP Delivery and Reform.

Perhaps we should look at this. In manifestos or elsewhere, people might consider how we learn, iterate and evolve. Do we want to look at ways in which to legislate so that money is specifically directed? We can look at that. Looking back at the past four years, however, Covid-19 hit us. It killed a lot of building activity for the guts of two years. Money was not misappropriated nor was it not known where it ended up. It followed absolutely proper procedures. If it was not spent, it was returned to the Department of Public Expenditure, NDP Delivery and Reform and followed its accounting and reporting rules.

Darren O'Rourke (Meath East, Sinn Fein)
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It sounds like the Minister has not read the Comptroller and Auditor General's report because it specifically said it was not properly accounted for. It states that the payments were not recorded in specific carbon tax funding subheads and it was not possible to confirm independently if they were spent correctly. This is really important because, regardless of your position on carbon tax, and I accept the Covid-19 argument, the Minister has made a lot of the fact that carbon tax is being collected to spend on climate action projects and it is clear from the Comptroller and Auditor General's report that it has not all been spent and, equally important, and it should be a concern for the Minister, it is not being accounted for appropriately by using carbon tax specific subheads. Surely that needs to happen in every Department.

Eamon Ryan (Dublin Bay South, Green Party)
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I am not using Covid-19 as an excuse. I am just pointing out the reality, as the report also does. I am not evading or avoiding that the Comptroller and Auditor General said we should be looking to audit an account and track it in a different way. I do not rule that out. I accept the point being made. We may need to look in the future at whether we want to hypothecate in a way that is much more specific and traceable and different from the rest of Government expenditure, where if there was an underspend, it would not be returned in the way it is in a standard ordered way. That is how the money was returned. One can disagree with that approach and say we should perhaps have a different accounting system for carbon tax. I accept that. It is a matter for future programme for Government negotiations. We cannot retrospectively change it.

There are two key points. First, Covid-19 was the main reason for the underspend. Second, you can be critical, as the report is, of the accounting and reporting systems, but they are not outside the norm. It was within the context recommended by the Department of Public Expenditure, NDP Delivery and Reform spending rules.