Dáil Éireann Debate, Tuesday - 14 October 2025
343. Deputy Cathal Crowe asked the Minister for Finance the measures he is taking to safeguard Ireland’s business aviation interests through the anticipated significant financial burden that would follow the proposed revision of the Energy Taxation Directive; and if he will make a statement on the matter. [54851/25]
View answerIreland’s excise duty treatment of aviation fuel is governed by European Union law as set out in Directive 2003/96/EC, commonly known as the Energy Tax Directive (ETD). ETD provisions on liquid fuels are transposed into national law in Chapter 1 of Part 2 of Finance Act 1999 (as amended). This legislation provides for the application of excise duty in the form of Mineral Oil Tax (MOT) on liquid fuels, including those used for aviation.
Heavy oil, or aviation kerosene/jet fuel, is the most commonly used fuel for commercial aviation. The current MOT rate on jet fuel is €615.76 per 1,000 litres. In line with the ETD, Ireland applies a full MOT exemption to jet fuel used for commercial aviation, including domestic, intra-community and international flights. I am advised by Revenue that based on volumes declared as exempt on MOT returns, the total MOT amount relieved on jet fuel used for commercial air navigation in 2024 is estimated at €944.1m.
Light oil, or aviation gasoline, is much less commonly used in commercial aviation. The current MOT rate on aviation gasoline is €706.14 per 1,000 litres. Under the ETD, Member States may partially or fully relieve aviation gasoline used for commercial aviation from taxation. Ireland has opted to apply a partial MOT relief to aviation gasoline used in commercial aviation, including domestic, intra-community and international flights. The relief operates by way of repayment at a rate of €232.27 per 1,000 litres, which means the effective rate of taxation is the MOT rate, minus €232.27. I am advised by Revenue that based on repayment claims, the total MOT relieved on aviation gasoline used in commercial aviation in 2024 was €0.1m.
Under the ETD, all fuel used for private pleasure air navigation is mandatorily taxed. For MOT purposes, private pleasure air navigation means the use of an aircraft, including the hiring of an aircraft, for any purpose that is not commercial.
It should be noted that industrial emissions from large installations are subject to significant carbon pricing under the EU Emissions Trading System or EU ETS. The aviation industry is subject to such carbon pricing.
In July 2021, as part of the Fit for 55 Package, the Commission published a proposal to revise the Energy Tax Directive. The taxation of intra-community flights forms part of this proposal. Ireland has been actively engaged in negotiations of this proposal, which are ongoing.
