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, the carbon tax is currently 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

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 increase to €30 is now expected in Budget 2020.

An increase to €30 per tonne would add an extra €23 (including VAT) a year to the average gas bill.
An increase to €30 per tonne would add another two or three cents to every litre of petrol/diesel.

An increase to €30 per tonne in 2020 will result in the following carbon tax charges:

  • €3.15 on the cost of a 40kg bag of coal;
  • 67 cents on a bale of peat briquettes;
  • 7.8 cents on a litre of diesel.
  • €69 (Inc. VAT) on  the average annual gas bill

The Climate Change Advisory Council Council recommends 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.