Dáil Éireann Debate, Tuesday - 29 September 2026
187. Deputy Pearse Doherty asked the Tánaiste and Minister for Finance if he will consider further measures to reduce the cost of green diesel to protect agriculture, construction, and other sectors from soaring costs. [68626/26]
Amharc ar fhreagraThe Government recognises the pressure that rising fuel as a result of the conflict in the Middle East has placed on agriculture, construction and other sectors of industry.
The Government has already temporarily reduced the Mineral Oil Tax applying to petrol, auto diesel and Marked Gas Oil (MGO). Inclusive of the reduction in the NORA levy, these changes save consumers and businesses:
• 27 cent per litre of petrol,
• 32 cent per litre of auto diesel, and
• 7.4 cent per litre of MGO.
These temporary reductions were due to expire on 31 August but were extended in full until 31 October with a phased restoration to pre-reduction levels due to take place between 1 November and 28 February 2027.
Government also deferred the Carbon Tax increase on home heating fuels and MGO, due to take place on 1 May, until 14 October in light of the extraordinary circumstances and increased fuel prices created by the conflict in the Middle East.
As I have already signalled there are a number of issues that we are actively endeavouring to advance to provide assistance and certainty to people when it comes to energy, while also being honest with people that there is no government in the world that can absorb all of the impact of a global energy shock.
As regards farmers in particular, it should be noted that section 664A of the Taxes Consolidation Act 1997 provides relief for expenditure relating to carbon tax on farm diesel incurred by any person carrying on a trade of farming. In computing profits of a farming trade, a farmer may claim an income tax or corporation tax deduction that is equal to the difference between the amount of carbon tax paid and the amount that would have been paid if calculated at the rate in place on 30 April 2012, i.e. €41.30 per 1,000 litres. This, in effect, keeps Carbon Tax on marked diesel fixed at a rate of just above 4 cent per litre for the farming sector. This is the rate that applied in 2012.
Further relief is provided for heavy oil (i.e. farm diesel, kerosene and fuel oil) and liquefied petroleum gas used for qualifying purposes in horticultural production and in the cultivation of mushrooms. Such fuel is relieved from the carbon component of MOT. Where farm diesel is used for such purposes the effective MOT rate after relief is currently €20.92 per 1,000 litres. Inclusive of VAT this equates to just under 2.4 cents per litre.
Furthermore, the Minister for Agriculture, Food and the Marine has implemented a comprehensive Fuel Income Support Scheme to assist farmers, agricultural contractors and fishers facing unprecedented increases in fuel costs.
Farmers and agricultural contractors have benefitted from a support rate equivalent to approximately 20 cents per litre of MGO (marked gas oil) used based on verified fuel consumption in 2025.
This targeted and practical support package ensured that those most exposed to these increases received meaningful assistance at the most critical time of year.
I also note the EU exceptional Aid package for farmers announced by European Commission in July 2026.
This package recognises the significant extra costs at farm level, specifically higher fertiliser and energy costs, arising from the volatility in the Middle East.
Minister Heydon, on behalf of Government, is working to finalise a scheme which will deliver this funding to the farmers most impacted by higher fertiliser costs and as quickly as possible.
The consideration of additional national funding to top-up EU exceptional aid funding will be considered as part of 2027 Budget discussions.
As the Deputy will be aware, various options are being considered by Government in relation to these matters ahead of the Budget next week.
