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 2023

Budget 2023 announced that the carbon tax will increase by €7.50 a tonne to €48.50. The increase on transport fuels was effective from October 12th 2022, while the increase in home heating fuels took place on 1st May 2023.

This added about €20 to a 900-litre tank of heating oil from May 1st 2023

The carbon tax is estimated to raise an additional €114 million in 2023 and €151 million in 2024. The Government has committed the additional revenues to the Just Transition, fuel poverty prevention and funding to encourage greener and more sustainable farming.

Overall Cost of Carbon Tax on Fuels from May 2023 (Approximate)

  • €5.09 on a 40kg bag of coal
  • €1.10 cents on a bale of briquettes
  • 12.5 cents on a litre of diesel/petrol
  • €110 on the average household gas bill
  • €122 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

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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.

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