Taoiseach Leo Varadkar has admitted Ireland will miss EU carbon emission reduction targets for 2020 and could face having to pay hundreds of millions of euro for credits.

Mr Varadkar told the Dáil Ireland hopes to meet carbon reduction targets for 2030.

“CO2 emissions are lower than they were, notwithstanding a significant increase in population, but we are nowhere near close to reaching our target of a 20% reduction by 2020,” he said.

“With the reduction likely to be closer to 1%, it is evident that we will not reach our 2020 targets but I do think we will meet our 2030 targets. I am determined that we should do so for renewable energy and CO2 emissions.”

Mr Varadkar said changes to carbon taxation for households and consumers could make a “difference”.

The Government held off on increases in the budget but has indicated such rises will apply in future budgets. Petrol, diesel, and coal are among the fuels subject to carbon taxation, levied at €20 per tonne.

Ireland must reduce carbon emissions by 20% by 2020 to comply with EU rules. If not, the EU could impose fines or force Ireland to buy carbon allowances.

The cabinet discussed these issues yesterday, with Mr Varadkar later admitting in the Dáil

in the afternoon

that the level of carbon credits would be substantial.

There was a range from somewhere between €98m to €500m, but it is on the lower end. I do not know the exact figures,” he said.

The response came after Fianna Fáil leader Micheál Martin said the official confirmation that Ireland would not meet its 2020 targets was an “extraordinary story of failure”.

“The Taoiseach is in a position to outline how much he thinks can be afforded in tax giveaways for the next five years, so surely he, or the Government, has some idea as to how much it will cost to purchase carbon credits or pay the fines we might face as a result of our failure to meet our climate change targets by 2020? The failure is dramatic,” said Mr Martin.

The Government last night failed to specify the level of carbon allowances discussed by Cabinet.

A spokesperson for the Department of Environment said negotiations would begin with other member states shortly in relation to purchasing carbon and renewable credits. Estimates cited were based on “worst-case scenario estimates” and likely to be lower than the minimum of that range.

At their weekly meeting yesterday, ministers also approved that a road map on climate change targets be written up by all departments.

Environment Minister Richard Bruton will oversee the action plan. It will include boosting incentives for the public to limit their levels of carbon output. Areas to be examined include the use of electric/hybrid cars and retrofitting more homes and businesses.