New Carbon Tax in Budget 2010

A new carbon tax of €15 Euro per Tonne was announced in the 2010 Budget. The tax will apply to Petrol and Diesel from midnight tonight.
Petrol will go up by 4.2c a litre and deisel by 4.9c a litre

The Carbon tax will apply from 1 May 2010 to Kerosene, Marked Gas Oil, Liquid Petroleum Gas (LPG), Fuel Oil and Natural Gas. VAT will also be charged on the carbon tax.

From May 1st 2010 – the new carbon tax will result in  a price increase of Kerosene (Heating Oil) by  4.3 cent a litre including VAT.  This will mean an extra €43 Euro on 1000 litres – which is an increase of about 6.5%

Natural gas prices will rise by  €0.00307 per kWh consumed. With the average annual gas usage in Ireland around 25000 Kwh – this will mean an increase of  around  €76  a year on the average gas bill. (About 7%)
See Our Gas Price Comparison here  to see if you could save money on your gas bill.

The application of the tax to coal and commercial peat will be subject to a Commencement Order.

For some reason –  Electricity is not subject to the carbon tax!

Update – Carbon Tax to be doubled by 2014 as part of National Recovery Plan

15 thoughts on “New Carbon Tax in Budget 2010

  1. No mention of biofuels in teh Budget documentation – it does say
    “Exemption from the carbon tax will apply only to participants in the EU Emissions
    Trading Scheme (ETS) in respect of fuels so covered. On that basis, electricity is not
    subject to the carbon tax.”

  2. At €15 / tonne CO2, then 4.2 and 4.9 c / litre tax on petrol and diesel respectively does not add up. I am looking for the formula used to make these calculations.

  3. It does add up because I now see that carbon tax on petrol and diesel includes VAT. So we pay carbon tax and pay VAT on top of that. Could we say that carbon is in fact €18.15 / tonne?

  4. I’m sorry, I don’t see how it can add up. I metric ton (tonne) is approximately 1000 litres of petrol and/or Diesel. If the CO2 tax is 15 euros per tonne of CO2. Then the actual weight of CO2 produced from 1 tonne of fuel is considerably less than per 1 tonne.
    So either way you calculate it, I don’t come anywhere near 4cents/ltr.

    15 euro carbon tax divided by 1000 ltr (approximately one metric ton) = .015cents (one and a half cents) per litre. Add VAT it comes to 1.8 cents per litre.
    Maybe I’m wrong. Please explain.

  5. 1000l oh kerosene burnt emits approx 2732kg of co2.diesel is similar and petrol is less, petrol has less energy per litre though.

    You can calculate it using molecular weight or energy content. Kerosene has 10.2kwh per litre, each kWh is responsible for 0.267 kg co2. Each litre is responsable for 10.2x .267= 2.73 kg/litre.

    • Thanks Paul – so 1000l = approx 3 tonnes of Co2 = approx 40 euro tax. So the figures are right. Hope that explains your query Eugene?

  6. Retail electricity is not subject to this particular tax because the cost of CO2 is already built into the price.

    Since the commencement of the Single Electricity Market(SEM)in Nov 2007 all generators are obliged to include the FULL cost of CO2 into their prices (irrespective of the actual costs, if any, to them. Under the EU Emmissions Trading Scheme certain generators received CO2 allowances free of charge until 2012).

    • Tony – thanks for that information about carbon tax and electricity .

  7. Could somebody please let me know what kind of carbon tax do i need to apply to bags of coal and briquettes i am a retailer in galway

    thank you


    • Sinead – the carbon tax has not yet been applied to solid fuels. I’m sure your supplier will let you know when the prices go up.

  8. Carbon tax is a scam! Find out the truth for yourself! never believe what people tell you. Question everything. Good bye.

  9. Im still really confused about this, im about to buy a car, im going buying a TDI volkswagen Bora, which will cost 582 euro per year for tax, with this new carbon tax how much more expensive will my tax be??

    • Therese – Carbon tax is a tax on fuel – such as gas and oil. It is not charged on cars …

  10. Money Saving Expert- oh i see, whoops, but how will this effect me if i still buy that diesel bora? would i be better off buying a petrol?

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