Carbon Tax in Ireland: Will It Increase in 2024?

Updated on
min reading
smoke stack with a euro symbol coming out

The carbon tax increased on 11 October 2023 and is currently levied at €56 per tonne of CO2 produced. This increase will not reach household bills until April 2024, according to the Budget 2024, but it’s still vital to know exactly how the carbon tax affects you and what it goes to fund in Ireland. Read our comprehensive carbon tax guide to find out more!

Energy

Looking to switch energy providers? Save 31% with Energia!

Our energy specialists can help you switch to a better energy plan in just a few minutes!

Ad
Energy

Looking to switch energy providers? Save 31% with our discount!

We're currently closed but please leave us your number and we'll give you a free callback as soon as we'open!

Ad

How Much Is the Carbon Tax in Ireland?

money

As of 11 October 2023, the carbon tax on coal, peat, kerosene and natural gas is currently levied at €56 per tonne of CO2 produced. It was previously set at €48.50 per tonne of CO2 produced but with the announcement of the Budget 2024, the carbon tax is went up by €7.50. This increase will initially hit transport fuels from 11 October 2023 and to the rest of domestic customers from 1 May 2024.

How Much Does the Carbon Tax Cost Me on My Gas Bill?

gas flame and bill

Gas providers currently charge €0.841 cents per kWh of gas consumed to cover the carbon tax. For the average household, which consumes 11,000 kWh of gas per year, that's an extra €92.51 a year, or €7.71 a month (including VAT). The carbon tax also has an indirect effect on the price of your electricity as well since the added costs can be passed through.

Our article on understanding your utility bill should clarify any further queries you have about the items listed on your gas bill.

How Much Does the Carbon Tax Cost Me on Petrol and Diesel?

The carbon tax on petrol and diesel is set at €41 per tonne of CO2 produced. The previous cost of a litre of diesel increased by €0.025, and the cost of petrol increased by €0.021. The overall cost of the carbon tax on each of these fuels is around €0.105 cents per litre.

How Much Does the Carbon Tax Cost Me on Other Fuels?

If you use home heating oil, you're paying around €103 per fill towards the carbon tax (for a 900-litre tank). The carbon tax for coal currently comes in at about €4.30 per 40kg bag. Peat briquettes are charged at around 60 cents extra per bale.

Including the carbon tax charges for auto fuels and natural gas, all of these charges raise over €400 million a year for the Irish government.

Carbon Tax Increases Timeline

1

2023
The Carbon Tax was raised from €41 to €56 per tonne of carbon dioxide emitted. This came into effect from 11 October 2023 and will reach household bills in April 2024.

2

2022
The Carbon Tax was raised from €33.50 to €41 from 1 May 2022. After the Budget 2024, the tax is due to rise again from 12 October 2022.

3

2021
The May 2021 Budget included an increase in the carbon tax on the remaining fuels to €33.50.

4

2020
The carbon tax is increased to €26 per tonne. The tax on auto fuels increased to €33.50 in October.

5

2014
The amount of the carbon tax on solid fuels is increased to €20 to match other taxed fuels.

6

2013
The carbon tax is introduced for solid fuels at a rate of €10 per tonne.

7

2012
The carbon tax was increased to €20 per tonne.

8

2011
The carbon tax in Ireland is first introduced at €15 per tonne of CO2.

Why did the Carbon Tax go up in 2023?

The carbon tax will increase from €48.50 per tonne of carbon dioxide to €56 per tonne on 1 October 2023. For petrol and diesel and then affecting homes in April 2024. Recommendations in the Government’s Climate Action Plan point to further increases until the carbon tax reaches €100 per tonne of CO2 by 2030, the next emissions reduction target deadline in the Paris Agreement.

Energy

Looking to switch energy providers? Save 31% with Energia!

Our energy specialists can help you switch to a better energy plan in just a few minutes!

Ad
Energy

Looking to switch energy providers? Save 31% with our discount!

We're currently closed but please leave us your number and we'll give you a free callback as soon as we'open!

Ad

What Is the Carbon Tax in Ireland?

question mark

The carbon tax is a tax applied to fossil fuels, such as gas, coal, oil, petrol, diesel and peat. These fuels emit carbon dioxide, or CO2, which is one of the main culprits behind global warming and extreme heat waves since it reflects heat and traps it in the Earth's atmosphere.

The theory behind a carbon tax is that levying charges against users of carbon-emitting fuels will do the following:

  1. Act as a financial disincentive to using fossil fuels as an energy source.
  2. Encourage an uptake of renewable energy.
  3. Provide financing for offsetting CO2 emissions and investing in renewable technology.

The carbon tax has been a source of controversy in some countries where it has been implemented, with citizens and representatives calling on the government to tax the large corporations responsible for carbon pollution instead of the people. The carbon tax is different from the PSO levy which is levied on electricity customers.

Energy

Looking to switch energy providers? Save 31% with Energia!

Our energy specialists can help you switch to a better energy plan in just a few minutes!

Ad
Energy

Looking to switch energy providers? Save 31% with our discount!

We're currently closed but please leave us your number and we'll give you a free callback as soon as we'open!

Ad

How Does the Carbon Tax Increase Affect Your Wallet?

A carbon tax of €56 per tonne of CO2 means adding on the following amounts to previous carbon tax charges and to your energy bills:

  • €93 a year to natural gas bills
  • €4.30 for a bag of coal (40kg)
  • €0.93 on a bale of peat briquettes
  • €103 on a tank of heating oil

Energy terms can be confusing. Head to our Gas & Electricity Glossary for help understanding energy jargon.

How Does the Carbon Tax Relate to Fuel Poverty?

Government ministers against increases in the level of the carbon tax have cited fuel poverty as one of the main reasons for stabilising or decreasing the carbon tax. With the cost of living now making life a lot more difficult, there are other reasons why it should be decreased at least temporarily.

As always, the easiest and fastest way to make the most significant savings on your home energy bills is by switching providers every 12 months. We also recommend paying via direct debit for your energy, as PAYG (pay as you go) tends to be the most expensive payment method.

The services and products mentioned on this website may only represent a small selection of the options available to you. Selectra encourages you to carry out your own research and seek advice if necessary before making any decisions. We may receive commission from selected partner providers on sales of some products and/or services mentioned within this website. Our website is free to use, and the commission we receive does not affect our opinion or the information we provide.

Get 31% off with Energia!

energia logo

Here are Energia's new discounts!

  • 🌟 31% off Electricity Only
  • 🌟 26% off Dual Fuel
  • 🌟 19% off Smart Tariffs
  • 🌟 21% off Smart Dual Fuel

Call Selectra now to get up with Ireland's cheapest energy provider!

⭐⭐⭐⭐⭐ 4.6/5 - Our Customer Reviews on Trustpilot