Budget 2021 was the largest in the history of the Irish State, coming against a backdrop of huge, pandemic-related economic collapse.
It was announced seven months ago – but some important changes are just kicking in today (May 1).
The new changes coming into place revolve around carbon tax, which was first introduced in Ireland in 2010 and applies to kerosene, marked gas oil, liquid petroleum gas, fuel oil, natural gas and solid fuels.
It was announced by Minister for Finance Paschal Donohoe in Budget 2021 that the carbon tax on fuel would see an increase by €7.50 from €26 per tonne to €33.50 per tonne starting from today.
This increase applied to auto fuels from October 13, 2020 and now also applies to solid fuels from today.
Carbon tax will increase by €7.50 every year until 2029 and then by €6.50 in 2030, bringing carbon tax to €100 per tonne by 2030.
€100 million of the carbon tax revenue collected will be invested in increasing the energy efficiency of Irish homes, including expanding the Warmer Homes Scheme and providing for new energy efficiency schemes such as the National Home Retrofit Scheme.
The Better Energy Warmer Homes Scheme aims to improve the energy efficiency and warmth of homes owned by people on low incomes and is operated by the Sustainable Energy Authority of Ireland (SEAI).
The changes to carbon tax which kick in today apply to:
Rates of Mineral Oil Tax (MOT)
The first increases on the rates of MOT, based on charging an additional €7.50 per tonne of CO2, came into effect on October 14, 2020 in relation to petrol, auto-diesel, aviation gasoline and heavy oil used for air navigation and for private pleasure navigation.
Other MOT rates had remained the same until until today when new rates take effect.
From today, the new rates will apply for:
• non-propellant kerosene (increases to €84.84 per 1,000 litres)
• fuel oil (increases to €118.01 per 1,000 litres)
• other heavy oil including marine gas oil (increases to €138.17 per 1,000 litres)
• propellant liquified petroleum gas (increases to €118.27 per 1,000 litres)
• non-propellant liquified petroleum gas (increases to €54.68 per 1,000 litres).
Rate of Natural Gas Carbon Tax (NGCT)
From today, a rate of €6.06 per megawatt hour applies. This increase is based on the amount charged per tonne of carbon dioxide (CO 2 ) emitted increasing from €26 to €33.50.
Previously, from 1 May 2020 to 30 April 2021, a rate of €4.71 (€5.22 at NCV) per megawatt hour applied. This rate was based on a carbon charge of €26 per tonne of CO 2 emitted when natural gas is combusted.
Rates of Solid Fuel Carbon Tax (SFCT)
Solid Fuel Carbon Tax (SFCT) applies to coal, peat briquettes, milled peat and other peat supplied in the State on or after 1 May 2013. Wood and wood products that have no solid fuel component are not liable to SFCT.
Current rates of SFCT applicable to solid fuel products from today are:
• coal (increases to €88.23 per tonne)
• peat briquettes (increases to €61.42 per tonne)
• milled peat (increases to €30.44)
• other peat (increases to €45.65).
The rate of tax that applies to solid fuel is proportionate to the amount of CO 2 emitted when the fuel is combusted.
