Budget changes to the carbon tax could mean less money for SEAI grants to retrofit homes, a political journalist has warned. 

Tánaiste Simon Harris and Minister for Public Expenditure Jack Chambers are due to deliver Budget 2027 early this afternoon, announcing a host of new spending measures and tax changes. 

Ministers have been keen to stress to journalists that they understand the pressure higher energy costs have placed on household budgets. 

However, a return to universal energy credits is understood to have been ruled out. 

Instead, Fionnán Sheahan of the Irish Independent said a “more targeted” measure is expected. 

“So, extra €5 on the fuel allowance, probably a broadening of the application process there as well,” he told Newstalk Breakfast. 

Significantly, the carbon tax is likely to be reduced, instead of increased. The tax is levied on fossil fuels and the revenue raised is used to fund the Fuel Allowance and green energy measures, such as SEAI grants. 

“Up until now, we've been told the carbon tax is absolutely sacrosanct, very important to climate change,” Mr Sheahan explained. 

“The world is burning and now suddenly the world is not burning because it's raining outside.

“What we're going to see there is a rollback, particularly in kerosene and gas. 

“Not just on the amount that they were due to go up by, which would have put the carbon tax on a fill of your home heat and tank up to €100.”

Taoiseach Micheál Martin tells us what we can expect from Budget 2027 ahead of today's official announcement.

Tune in to Newstalk for all your #Budget2027 news and analysis throughout the day, with thanks to @PwCIreland. https://t.co/tYRnxQLdsq

— NewstalkFM (@NewstalkFM) October 6, 2026

Mr Sheahan continued that any changes to the carbon tax amount to a “substantial” policy change but a reflection of the state of the world. 

Fossil prices shot up following the invasion of Ukraine and did so again when the Iran War broke out. 

“What has happened to global fuel prices was not anticipated at the time that the carbon tax was being set at the start of the decade,” he said. 

“Since then, we've had the war in Ukraine followed on by the Middle East oil crisis. 

“There are only so many houses you can retrofit and have boiler amnesties for per annum.”

The aftermath of a US bomb in Tehran. Picture by: Nahal Farzaneh/UPI Credit: UPI/Alamy Live News.

However, any reduction in the carbon tax will also mean a loss of revenue for State coffers. 

It means there could be a reduction in support for some of the measures carbon tax revenue funds. 

“We are now definitely not going to meet the targets that we already weren't going to meet,” Mr Sheahan said. 

“Or we're going to introduce some other mitigating factors into the equation that will make up for this particular loss. 

“Also, there's a loss of income there to actually invest in the retrofitting of houses.”

Main image: A man installing a rooftop solar panel array. Picture by: Radharc Images / Alamy.