The Central Statistics Office (CSO) has today (Monday, November 23) published a report that shows the average effective carbon rate for ‘green diesel’ at €39/t.
The Fossil Fuel Subsidies 2000-2018 report analyses the average effective carbon rate per tonne of carbon dioxide emitted for the main fossil fuels.
The report also combines direct fossil fuel subsidies such as the household fuel allowance with indirect subsidies such as revenue foregone through lower excise duty rates, to estimate the total cost of fossil fuel subsidies.
The energy taxes included are Excise Duty; Carbon Tax; Electricity Tax; the National Oil Reserves Agency (NORA) Levy; the Public Service Obligation (PSO) Levy; and emission permit purchases under the EU Emissions Trading Scheme.
In 2015, ‘green diesel’ (marked gas oil) had a rate of just under €37.00/t (€36.9) but that rate has been growing year on year since.
Statistician in the Environment and Climate Division of the CSO Clare O’Hara said: “Total fossil fuel subsidies in 2018 were €2.4 billion. This was an increase of 8% on 2017 and 71% higher than in the year 2000 which is the first year in our series.
Looking at the data, we found that the highest average effective carbon rate per tonne of carbon dioxide was €258 for petrol, which is mainly used by private motorists in urban areas.
“The average effective carbon rate for autodiesel was lower at €184 per tonne of carbon dioxide due to the lower excise duty rate applied to this fuel,” she added.
“Jet kerosene used for commercial aviation is exempt from excise and carbon taxes. Using the excise duty for heavy oil used for air navigation as a benchmark, we estimated that the revenue foregone in 2018 on jet kerosene due to the tax exemption was €626 million.
“Using the petrol excise duty rate as a benchmark, we estimated the revenue foregone on autodiesel in 2018 due to a lower excise duty rate as €390 million.”
Agricultural fuel
According to O’Hara: “The average effective carbon rate for marked gas oil, sometimes referred to as ‘green diesel’, used in agriculture, forestry and fishing was €39 per tonne of carbon dioxide.”
Source: CSO Ireland
Some fossil fuel subsidies provide important social supports. The household electricity allowance was €103 million and the household fuel allowance was €96 million in 2018.
The VAT refund on autodiesel for business use was €285 million in 2018.
The CSO states that increasing the effective carbon price of autodiesel would probably have a greater impact on rural households than urban households.
The CSO publishes separate statistical releases on environment taxes and on environmental subsidies.
Those releases showed that energy taxes were €3.2 billion in 2018 while environmental subsidies on energy and emissions were €0.5 billion.