Carbon Tax in Ireland – How Much Is It ?

A carbon tax is a tax on the use of fossil fuels such as oil, petrol, diesel, gas, coal and peat.

Budget 2022 announced an increase to the Carbon Tax in Ireland

The Carbon Tax rate of €33.50 a tonne was increased by €7.50 a tonne to around €41 a tonne. That resulted in a 2.5 cent increase in the cost of a litre of diesel and 2 cents on a litre of petrol at midnight 12th Oct. 2021.

The Carbon Tax on other fuels went up on May 1st 2022.

Carbon Tax Increases on fuels in May 2022:

  • Kerosene (900 litre tank up €19.40),
  • natural gas (average annual usage up €16.95)
  • coal (40kg bag up 89c)
  • peat briquettes (12.5kg bale up 20c)

VAT Decrease on Electricity and Gas

The carbon tax increase on gas will be cancelled out by the temporary reduction of VAT on gas.
Between May 1st and Feb 28th 2023 the VAT rate on gas & electricity is being reduced from 13.5 per cent to 9 per cent.
The VAT reduction on energy bills will be worth around €49 a year on gas and €61 a year on electricity to the average household. More about VAT Rates Here

Overall Cost of Carbon Tax on Fuels from May 2022 (Approximate)

  • €4.52 on a 40kg bag of coal
  • 98 cents on a bale of briquettes
  • 11 cents on a litre of diesel/petrol
  • €94 on the average household gas bill
  • €103 on 900 litres of heating oil

If you want to cut your energy bills take a look at our Gas Price Comparison and Electricity Price Comparison

More Money Saving Tips

History of Carbon Tax

The first time we had a Carbon Tax in Ireland was back in the 2010 Budget . It was first introduced at a rate of  €15 Euro per Tonne. (But not on solid fuels.)
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 first 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 proposed that the carbon tax would be increased in 2019 by 50% to €30 a tonne – but this didn’t happen.

In Ireland, prior to Budget 2020 the carbon tax was levied at €20 per tonne of CO2. On 8th October 2019 – The carbon tax on diesel and petrol was increased to €26 per tonne. This resulted in a price rise of about 2c per litre. The carbon tax on other fuels was increased to €26 a tonne from May 1st  2020.

From Oct 12th 2022 Carbon Tax was increased on auto fuels by €7.50 per tonne of carbon dioxide emitted, from €41.00 to €48.50. This was offset by a levy reduction so that it did not result in a price increase. For all other fuels, the carbon tax will increase from 1 May 2023.

Carbon Tax in Ireland will continue to move towards €100 per tonne in 2030.