Fuel taxes do not help environment, say AA, as they call for positive measures in budget

AA Ireland has called on government to concentrate on positive measures that can help both transport and the environment in next week’s budget.

The motoring organisation has warned against a crude and unfair hike in current fuel taxes.

“Irish fuel is super-taxed as it is,” said the AA director of Consumer Affairs, Conor Faughnan.

“Two thirds of what you pay at the pump is tax already – a tax-free litre of petrol only costs approximately 40c.

“When those taxes get hiked, it doesn’t help with emissions or with people’s choices, it just pushes up the cost of living.

“It does so unfairly because less affluent drivers with older cars and rural drivers who do high mileage suffer most.”

AA Ireland has encouraged the government to focus on the positive measures transport in Ireland in Budget 2021, believing that incentives to encourage more sustainable forms of transport will do more for the climate than fuel tax increases can achieve.

“Tax incentives to encourage the sale of electric cars can work well. In 2008 car taxes were changed to encourage a switch to diesel, then the cleanest option.

“It worked and diesel became the number one fuel. We now want to switch to even cleaner electric cars, so make it worth it for people. They will respond.”

The AA proposes a scrappage scheme where an incentive is provided to scrap an older diesel car when buying a new electric model.

In last year’s budget, €36m was allocated to the transition to electric vehicles, and there was a goal of doubling the number of home chargers and public fast charge units in 2020.

The AA is highlighting that a similar level of investment will be required this year in order to address the range anxiety that currently deters some people from purchasing electric vehicles.

The AA also encourages government to do more for the promotion of cycling, especially e-bikes.

Commitments in the programme of government to widen the eligibility of the Bike to Work scheme should be treated as a priority to reduce congestion and provide alternatives to the private car for short to medium journeys, the AA says. It is encouraging the government to offer an increased allowance for e-bikes in particular.

“EV technology has improved greatly in recent years and most new EVs have a range of 250 to 350km on a single charge.

“Despite this, range anxiety and the upfront price of a new EV remain significant blockers for those considering the switch and continuous improvements to the charging network alongside better incentives like a diesel-to-electric scrappage scheme would go a long way towards making people more comfortable with embracing EVs.”

“We also need to do more to address a history of over-reliance on the private car for shorter journeys and enhancing the bike-to-work scheme would be an easy means of achieving this.

“E-bikes, in particular, mean that cycling would now be an option for people who previously believed their journey was too far to cycle or with mobility issues and government should row in behind the technology that now exists to help us meet our climate goals.”

The AA, however, emphasised that the government should not continue a pattern of increasing the taxes on both petrol and diesel while believing that doing so will do anything to help Ireland reach its climate change obligations.

In last year’s budget, a €6 per tonne increase in carbon tax was introduced, leading to an increase of approximately 2c per litre on fuel prices.

Such moves accomplish little in terms of encouraging people to reduce their car use and instead only act to make commuting more expensive, in particular for those in areas under-served by public transport.

“We have seen that where you provide public transport people use it, where you incentivise people to move to cleaner forms of transport that can meet their needs they will choose to do so.

"However, we have also seen over decades now, that if you simply make driving more expensive without providing viable alternatives then people will simply pay the higher cost, continue to drive to where they need to go, and nothing is achieved for the climate.”