Carbon Tax – How Much Does it Cost You?

A carbon tax is a tax on the use of fossil fuels such as oil, petrol, diesel, gas, coal and peat; anything that produces CO2 when it’s burned.

In Ireland, prior to Budget 2020 the carbon tax was levied at €20 per tonne of CO2. It raises €400 million a year and adds about :

  • €2.10 to the cost of a 40kg bag of coal;
  • 45 cents to a bale of briquettes;
  • and 5.3 cents to a litre of diesel.
  • €46 (Inc. VAT) to the average gas bill

As announced in Budget 2020 – the Carbon tax on diesel and petrol will be increased at midnight on 8th October 2019. Increasing by €6 a tonne – this will see a price rise of about 2c per litre.
The carbon tax on other fuels will be increased in May 2020


The  increase to €26 per tonne in 2020 will result in the following price increases.

  • €0.72 on the cost of a 40kg bag of coal;
  • 16 cents on a bale of peat briquettes;
  • 2 cents on a litre of diesel/ petrol
  • €14 on  the average annual gas bill
  • €15.50 on 900 litres of heating oil

The first time we had a Carbon Tax in Ireland was back in the 2010 Budget . It was introduced at a rate of  €15 Euro per Tonne.
The Carbon Tax was then increased to €20 a tonne in the 2012 Budget –  which was a 66% increase. (Don’t forget – VAT is charged on top of the Carbon Tax too).

Carbon Tax was added to solid fuels in May 2013 at a rate of €10 per tonne. This was doubled in May 2014 to fall in line with other fuels.

It was planned to increase the carbon tax in 2019 by 50% to €30 a tonne – but this didn’t happen.

The Climate Change Advisory Council Council recommended that the carbon tax should be increased to €35 euros per tonne of carbon dioxide equivalent in Budget 2020, increasing to at least 80 euros per tonne by 2030.

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