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 2021 announced an increase to Carbon Tax of €7.50 a tonne from €26 to €33.50 a tonne. (This will continue to move towards €100 per tonne in 2030. ).


This increase will apply to auto fuels from midnight 13th Oct , and will be applied to all other carbon-based fuels (coal , peat, kerosene, gas) from May 1st 2021.


The increase will mean a €0.025 increase in the cost of a litre of diesel and €0.021 on a litre of petrol straight away.


The  increase to €33.50 per tonne will result in the following approximate price increases in May 2021

  • €0.75 extra on the cost of a 40kg bag of coal;
  • 18 cents extra on a bale of peat briquettes;
  • €16 extra on the average annual gas bill
  • €17 extra on 900 litres of heating oil

Overall Cost of Carbon Tax on Fuels from May 2021 (Approximate)

  • €3.63 on a 40kg bag of coal;
  • 78 cents on a bale of briquettes
  • 9 cents to a litre of diesel/petrol
  • €77 (Inc. VAT) on the average gas bill
  • €84 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.

It was proposed that 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 – 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

The Climate Change Advisory Council Council recommended that the carbon tax should be increased to €35 euros per tonne in 2020, increasing to at least 80 euros per tonne by 2030.