Dáil Éireann Debate, Tuesday - 21 April 2026
306. Deputy Matt Carthy asked the Tánaiste and Minister for Finance the total amount by which he proposes to raise the price of petrol, diesel and home heating oil through increases to the carbon tax, in each year until 2030. [26716/26]
Amharc ar fhreagraThe application of carbon tax to petrol and auto-diesel was introduced in December 2009, followed by the extension of carbon taxation to other liquid fuels, including home heating oil, on 1 May 2010.
Ireland’s carbon tax regime is a carbon pricing mechanism which directly links the taxation of fossil fuels to carbon dioxide emissions: a single price is set for a tonne of carbon dioxide, and this price is then applied to each fuel type according to the level of carbon dioxide emitted by that fuel when it is combusted. In this way, the carbon tax applying to each fuel type reflects the level of carbon dioxide emissions that it releases.
Legislation was introduced in Finance Act 2020 to provide for annual increases in carbon tax rates up to May 2030, at which point all carbon tax rates will be based on charging €100 per tonne of carbon dioxide emissions. Carbon tax rates on petrol and auto-diesel are legislated to increase at Budget time each October up to and including 2029, with rates on other liable fuels legislated to increase each May (i.e. after the winter heating season) up to and including 2030. This means that rates for the carbon component of MOT are set to increase a further four times for petrol and auto-diesel, and five times for heating fuels, over the remainder of the trajectory provided for in legislation.
In relation to the increases to heating kerosene and MGO scheduled for 1 May 2026, in light of the current fuel crisis I have postponed these increases until October 14 2026. In addition I have provided for further cuts to MOT rates on petrol, auto-diesel and MGO which came into effect on 15 April and will remain in place until 31 July this year.
For petrol, the MOT carbon component rate increases, inclusive of VAT, will total to 8.1 cents per litre over the remainder of the carbon tax trajectory. The annual increases will be 2.1 cents per litre for each of the next three years, and 1.8 cents per litre in 2029.
Inclusive of VAT the remaining four increases to the MOT carbon component rate on auto-diesel will total to 9.6 cents per litre. The annual increases will be 2.5 cents per litre for each of the next three years and 2.1 cents per litre in 2029.
Kerosene is the most commonly used oil for home heating. Inclusive of VAT the MOT carbon component rate increases on heating kerosene will total to 10.7 cents per litre over the remainder of the carbon tax trajectory. The annual amounts will be 2.2 cents per litre for each of the next four years and 1.9 cents per litre in 2030.
MGO is generally used in agriculture and certain other sectors but may also be used for heating. Inclusive of VAT the remaining five increases to the MOT carbon component rate on MGO will total to 11.2 cents per litre. The annual increases will be 2.3 cents per litre for each of the next four years and 2 cents per litre in 2030.
