Dáil Éireann Debate, Wednesday - 15 April 2026
200. Deputy William Aird asked the Tánaiste and Minister for Finance if consideration has been given to including alternative fuels, including hydrotreated vegetable oil and other low-emission fuels, within the Revenue Commissioners rebate scheme; and if he will make a statement on the matter. [27389/26]
View answer207. Deputy Pearse Doherty asked the Tánaiste and Minister for Finance if the excise reduction for auto diesel impacts the excise charged on HVO; and if he will make a statement on the matter. [27588/26]
View answerI propose to take Questions Nos. 200 and 207 together.
Hydrotreated vegetable oil (HVO) used as a motor fuel instead of diesel attracts the same level of the non-carbon component of Mineral Oil Tax as diesel used for the same purpose. The recent reductions in the non-carbon component of Mineral Oil Tax applied to diesel also apply to HVO used for the same purpose.
Section 100(5) of Finance Act 1999 (as amended) provides for a relief from the carbon component of MOT for all biofuels. This means that biofuels, such as Fatty Acid Methyl Ester (FAME/biodiesel), bioethanol, and HVO, are only subject to the non-carbon component of MOT, and carbon tax does not apply. In the case of blended fuels, the biofuel relief applies to the biofuel portion.
As biofuels are relieved of the carbon component of MOT, they are not impacted by annual carbon tax increases. As a result, the MOT rate differential between biofuels and fossil fuels will continue to widen as the 10-year carbon tax trajectory up to 2030 is implemented.
The Diesel Rebate Scheme (DRS) is a State aid which provides for a partial MOT rebate to licensed transport operators for auto-diesel used in qualifying vehicles. HVO used as a direct substitute for auto-diesel does not qualify under the DRS.
However, it is important to note that HVO qualifies for relief from the carbon component of MOT. Currently the rate of the biofuel relief is just over 19 cents per litre, which is higher than the current DRS rate of repayment of 12 cents per litre.
