Ireland has cut its carbon tax on home heating oil and gas from €63.50 to €48.50 per tonne of CO2 and paused all planned increases for the rest of the government's term. The move was announced in Budget 2027 as home heating oil prices spiked after the US and Israel's war on Iran. Average oil prices are up more than 68% from 2025, which pushed the government to act before winter. Environmental groups, including the Green Party and Friends of the Irish Environment, criticized the reversal. They argue the carbon tax was a core tool for driving fuel switching and that the freeze removes funding for SEAI home energy upgrades. The government says it remains committed to decarbonization, but it has not yet explained how retrofit programs will be funded without future carbon tax increases. The policy shift raises questions about carbon pricing credibility across Europe, especially as other countries face similar energy price pressures. The Finance Act 2020 had set a path to €100 per tonne by 2030; that trajectory is now in doubt.
