The government has announced an increase of €5 to the fuel allowance weekly rate in Budget 2022.

The new rate of €33 will apply from midnight.

In the Dáil chamber this afternoon, Minister for Public Expenditure and Reform Michael McGrath also announced a €5 increase in the weekly state pension, along with a €3 increase in the living alone allowance.

Retrofit allocation in Budget 2022

The carbon tax, as expected, will increase by €7.50 to €33.50/t.

€202 million in carbon tax revenue will be spent in 2022 on supporting people to improve the energy efficiency of their homes.

It is estimated by the government that this will “support over 22,000 home energy upgrades, including to support those in, or at risk of, energy poverty”.

More than half of the funding will be for free upgrades for low-income households at risk of energy poverty.

€10 million is earmarked for the Solar PV scheme; €31 million is for energy efficiency and renewable energy schemes in businesses and the public sector. A new low-cost loan scheme for residential retrofitting will also be introduced.

In his speech, Minister for Finance Paschal Donohoe said that “studies have shown that carbon taxation is likely to be the single most effective climate policy which can be pursued by government; although it is not the only one and will not deliver the required emissions reductions on its own”.

“We have seen challenges around energy supply and prices across the globe in recent months. The government is conscious of how this will impact on our most vulnerable,” the minister said.

“That is why new monies raised in this [carbon tax] change will be invested in targeted social welfare initiatives to prevent fuel poverty and ensure a just transition.

“It is why the additional revenue from carbon tax will be used to invest in a socially progressive national retrofitting programme.”

Other allocations

€225 million has been announced to progress the roll-out of the high-speed broadband network next year under the National Broadband Plan.

€34 million in funding will be available in 2022 for projects that are approved for EU and national just transition funds. These will be in areas and sectors of the economy most impacted by the transition to net-zero emissions.

€22 million will go towards the Bord na Móna Peatlands Rehabilitation Scheme in 2022.

€11 million will fund climate research to enable Ireland to meet its renewable energy targets and climate commitments.