A carbon tax is a tax on the use of fossil fuels such as oil, petrol, diesel, gas, coal and peat.
Budget 2024 announced an increase to the Carbon Tax in Ireland. The rate per tonne of carbon dioxide emitted for petrol and diesel will go up by €7.50 from €48.50 to €56.00 from 11th October. This will add about 2 cents a litre to petrol prices.
Carbon Tax on solid fuel and gas will be increased in May 2024
Carbon Tax 2024
Overall Cost of Carbon Tax on Fuels from May 2024 (Approximate)
- €6 on a 40kg bag of coal
- €1.30 cents on a bale of briquettes
- 15 cents on a litre of diesel/petrol
- €127 on the average household gas bill
- €141 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
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.
In 2020, legislation was introduced for a 10-year trajectory of carbon tax increases to bring the
charge per tonne of CO2 emmissions to €100 by 2030.
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.
On May 1st 2024 – the carbon tax on solid fuels increased to €56 per tonne of CO2
The carbon tax rates per tonne of fuel are:
- €147.49 on coal
- €102.68 on Peat Briquettes
Carbon Tax is also charged on Natural Gas . From May 1st 2024 the rate is €56 per tonne of Co2 which equates to €10.13 per MWh .
How Is Carbon Tax Spent?
Since Budget 2020, all carbon tax revenues above the €20 per tonne of carbon dioxide rate are ring-fenced. From a total of almost €5.3 billion in total carbon tax revenues, approximately €1.36 billion of carbon tax revenues have been deposited to the Central Fund, with a further €788 million forecast to be ring-fenced in 2024.
These funds are used to finance green initiatives and other climate-related policies such as home retrofits and addressing energy poverty.
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