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From 9 October, the rate of carbon tax for petrol and diesel will increase from €56 to €63.50 per tonne. The increase will apply to all other fuels from 1 May 2025. The tax is aimed at reducing Ireland's use of fossil fuels by encouraging people to make more environmentally sustainable choices when it comes to their use of gas, petrol and diesel, home heating oil and other carbon emitting fuels.
As of October 9th, 2024, the carbon tax rate in Ireland increased from €56 to €63.50 per tonne of carbon dioxide emitted. This increase applies to petrol, diesel, and other fuels.
This adjustment is part of the government's plan to gradually raise the carbon tax to €100 per tonne by 2030, aiming to reduce carbon emissions and promote cleaner energy sources.
From 2030, the annual rate of increase will drop to €6.50 per year.
The Carbon Tax is placed on all carbon emitting fuels, primarily gas, with a breakdown of the average cost found below:
| Fuel | Additional Cost (including VAT) |
|---|---|
| Natural Gas | €122 per year |
| Petrol and Diesel | 15c per litre |
| Bag of coal | €5.88 per 40kg bag |
| Peat Briquettes | €1.27 per bale |
| Home heating oil | €141 per 900 litres |
Gas providers currently charge roughly €0.1 cent 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 €122 a year, or €10.16 a month (including VAT).
The carbon tax is not applied to electricity bills, but this is compensated by PSO levy, which is applied to electricity bills.
The carbon tax adds 12.96c to a litre of petrol and 14.99c to a litre of diesel.
Given that the average Irish motorists drives around 17,000km in a petrol car and 24,000km in a diesel vehicle, the carbon tax is adding €140 a year for petrol drivers and an additional €166 a year for diesel drivers.
The aim of the Carbon Tax placed on vehicle fuel is to encourage motorists to switch to electric vehicles in order to reduce overall CO₂ emissions.
Have a look at our electric vehicles in Ireland guide to see how switching to an electric vehicle can help you avoid paying additional costs on your transport needs.
The carbon tax is also applied to other fuels, with an additional cost of:
Similar to transport fuel, the carbon tax is aimed at encouraging people to move away from fossil fuels as a source of home heating towards more sustainable methods.
Examples of alternatives to fossil fuels include:
Given that the carbon tax is only going to increase year-on-year, it is worth considering investing in some of these home heating upgrades to reduce consumption of fossil fuel energy.
Grants are available from the SEAI to help cover the cost of these home heating upgrades.
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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:
The carbon tax is one of the factors why Irish gas bills have become so high in recent years when compared with European gas prices, and why it is more important than ever to compare the market in order to get the cheapest deal possible.
The revenue earned from the carbon tax has increased significantly since it was introduced over 10 years ago.
By the end of 2023, almost €5.288 billion in carbon tax revenue had been collected since its introduction.
The Programme for Government commits to an additional €9.5 billion of spending using the revenue collected from the carbon tax.
This is allocated towards:
Revenue will also be used to fund various projects aimed at reducing Ireland's carbon footprint, such as:
| Department | Project Funded | 2024 Allocation |
|---|---|---|
| Transport | Greenways and Urban Cycling | €9 million |
| Transport | EV Charging Infrastructure | €3 million |
| Transport | Providing Grants for EVs | €8 million |
| DHLGH | Peatlands Rehabilitation | €5 million |
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