From Department of the Environment, Climate and Communications
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The Minister for the Environment, Climate and Communications, Eamon Ryan, has signed an order to commence the Energy (Windfall Gains in the Energy Sector) (Temporary Solidarity Contribution) Act 2023 with effect from today, 2 August 2023.
This Act provides for the implementation of the temporary solidarity contribution outlined in Council Regulation (EU) 2022/1854 of 6 October 2022 on an emergency intervention to address high energy prices.
Companies within the scope of the temporary solidarity contribution are required:
The Revenue Commissioners has prepared information and guidance on the temporary solidarity contribution, which is available on the Revenue website.
The war in Ukraine has led to significant increases in wholesale natural gas prices. As a result, consumers are paying higher prices for gas and electricity. High wholesale gas prices have also led to windfall gains for some entities in the fossil fuel production and refining sectors, and in the electricity sector.
On 22 November 2022, the government announced measures to address windfall gains in the energy sector through the implementation of Council Regulation (EU) 2022/1854. The measures were the temporary solidarity contribution on fossil fuel production and refining and a cap on market revenues on certain electricity generators.
The temporary solidarity contribution will:
The proceeds to be raised by the temporary solidarity contribution are expected to be in the range of €200 million to €450 million. These estimates continue to remain highly sensitive to wholesale gas prices, which can be driven by weather, gas storage levels, developments of the war in Ukraine, for example.
A General Scheme - Energy (Windfall Gains in the Energy Sector) Bill 2023 was developed by the Department of the Environment, Climate and Communications following consultation with relevant departments, agencies and stakeholders. It seeks to ensure collection of windfall gains while minimising the impact on energy markets, security of energy supply and future investments.
The General Scheme underwent Pre-legislative Scrutiny in April and May 2023. On 18 May 2023 the Joint Committee on Environment and Climate Action published a Report on the Pre-Legislative Scrutiny of the General Scheme of the Bill.
In June and July 2023, the Energy (Windfall Gains in the Energy Sector) (Temporary Solidarity Contribution) Bill 2023 passed through the Houses of the Oireachtas and was signed into law by the President on 17 July 2023.