Pulse Survey now running Five years on, we're measuring the lasting impact of COVID-19 on our lives in our latest short Pulse Survey. CSO Pulse Surveys are anonymous and open to all. #CSOTakePart
This release contains data on fossil fuel subsidies in 2020 and 2021, during the COVID-19 pandemic. Consumption of fossil fuels used for transport was lower in 2020 and in 2021 due to the pandemic.
In this release we calculated the average effective carbon rates (ECRs) of fossil fuels in different sectors of the Irish economy.
The average effective carbon rate of a fuel is the amount of energy tax paid per tonne of carbon dioxide emitted through combustion of the fuel. Energy taxes include excise duty on fuels, 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 (EU ETS). These taxes are included as energy taxes in the CSO Environment Taxes release. VAT was not included in the calculation of effective carbon rates as it applies to non-energy products as well as energy products.
The average effective carbon rate was calculated using net receipts and excise volumes published by Revenue wherever possible. When net receipts or excise volumes for a specific fuel or sector were not available, information on energy tax rates and reliefs was used in conjunction with energy use statistics from the SEAI Energy Balance to estimate receipts. Emissions were estimated from excise volumes or Energy Balance statistics by applying emission factors published by the SEAI to fuel consumption.
For most fuels and sectors, emissions were measured as those arising from fuel sales on the territory of Ireland. In the case of EU ETS permit purchases by Irish airlines, permit purchases were estimated as the difference between the free allocation and the verified emissions of Irish airlines flights within the European Economic Area (EEA). Therefore ECR calculations for jet kerosene were carried our separately for taxes applying to fuel sales in Ireland and for emissions permit purchases. The former was calculated as excise and carbon tax receipts divided by emissions from fuel sales on the territory of Ireland, while the latter was calculated as the average annual EU ETS carbon price multiplied by the difference between the annual free allocation and annual emissions of Irish airlines covered by the EU ETS, divided by total emissions by Irish airlines. Emissions from all flights, including those outside the EEA were included in the calculation. An overall ECR for jet kerosene was obtained by taking a weighted average of the two ECRs.
ECRs cover carbon dioxide emissions from fuel combustion only; other greenhouse gases and emissions from other sources are not included.
The OECD maintains a database of national energy taxes called the Taxing Energy Use database and uses it to report effective carbon rates for different sectors and fuels in OECD countries. We used similar concepts to the OECD for this release.
The excise duty rates on mineral oils published by Revenue include a carbon component, which is also referred to as the carbon tax. The carbon tax rate is directly related to the amount of carbon dioxide emitted through combustion of the fuel while the non-carbon component of the Excise Duty rate depends on whether the fuel is used for transport, industry or heating. The Solid Fuel Carbon Tax (SFCT) applies to coal and peat and the Natural Gas Carbon Tax (NGCT) applies to natural gas. There are a number of rate reductions and exemptions on excise duty and the carbon tax, such as the exemptions for fuel used in international aviation, maritime transport and electricity generation.
Electricity tax is an excise tax paid by business and non-business consumers. There is no electricity tax due on household use of electricity. All electricity consumers pay the PSO levy, which is used to subsidise electricity generation.
The NORA levy was charged at a rate of 2 cent per litre in 2021, on oil products such as petrol, road diesel and kerosene. Revenue is used to fund the acquisition and storage of strategic oil stocks. It does not apply on fuel used for international aviation or maritime transport.
The EU Emissions Trading Scheme commenced in 2005. An emission permit allows the holder to emit one tonne of carbon dioxide. Major emitters of greenhouse gases may be provided with free allowances of emission permits. They surrender a quantity of permits equal to their verified carbon dioxide emissions each year. If the free allowances do not cover their emissions they must purchase further permits at auction or on the open market. Stationary installations from sectors including electricity generation, manufacturing and services participate in the EU ETS. Airline operators were included in the EU ETS in 2012. Further information can be found on the Environmental Protection Agency's website. In this release we estimated the average annual cost of emitting a tonne of carbon dioxide as the difference between the free allocation and the verified EU ETS emissions in a given year, multiplied by the average annual auction price.
We calculated the average effective carbon rate for petrol, road diesel and road LPG using net receipts and fuel excise volumes published by Revenue. The taxes that applied to road transport fuels were excise duty, carbon tax and the NORA levy.
We included diesel charged at the rate of marked gas oil, and electricity under rail transport fuels. Excise duty and carbon tax were charged on diesel, while electricity tax and the PSO levy were charged on electricity. Electricity emissions were calculated using the CSO Business Energy Use (BEU) survey data on energy use and SEAI electricity emission factors. Electricity tax was applied at the business rate while PSO levy payments were estimated using data obtained directly from Iarnród Éireann and the annual PSO levy rates.
Aviation gasoline and jet kerosene are the main aviation fuels. Aviation gasoline for private use is subject to the same excise duty rate as petrol, however a partial excise repayment is available on aviation gasoline for commercial use. Aviation gasoline volumes and partial excise repayment amounts were obtained from Revenue.
Jet kerosene for commercial domestic and international use is exempt from excise duty, carbon tax and the NORA levy. The exemption for international use is included in the EU Energy Taxation Directive, which permits taxation on jet kerosene used for domestic flights and for international flights between member states with bilateral agreements to impose taxes. Jet kerosene used on flights within the EEA is covered in the EU ETS and requires emission permits. Jet kerosene consumption was obtained from the SEAI Energy Balance. No excise tax was applied to international consumption. We applied the excise duty and carbon tax rate on heavy oil for air navigation to a small proportion of domestic use of jet kerosene to estimate potential tax receipts from private use. As outlined above, ECR calculations for jet kerosene were carried our separately for taxes applying to fuel sales in Ireland and for emissions permit purchases, and a weighted average was taken to arrive at on overall figure for jet kerosene.
Marine fuel for commercial use is exempt from excise duty, carbon tax and the NORA levy. Fuel use for private pleasure navigation is subject to excise duty and carbon tax at the same rate as road diesel. We applied this rate to a proportion of domestic use of marine diesel to obtain an estimate of tax receipts from fuel use in privately owned boats.
Fuels used for electricity generation (excluding in combined heat and power plants), where such electricity is either subject to electricity tax or is supplied for consumption outside the State, are exempt from excise duty and carbon tax. Fuels used for electricity generation in high efficiency combined heat and power (CHP) plants and in installations covered by greenhouse gas permits are also exempt from carbon tax. The electricity generation sector instead comes under the EU ETS. Between 2005 and 2012, power plants were provided with free allowances which covered a large majority of their emissions, or exceeded them. Since 2013 the electricity generation sector has received no further free allocation of emission permits.
We calculated the annual cost of emissions permits as the average annual EU ETS carbon price multiplied by the difference between any annual free allocation to power plants and annual emissions of power plants covered by the EU ETS.
Emissions included under the EU ETS are largely exempt from carbon tax. Receipts from Industry sector purchases of EU ETS emission permits were estimated as the average annual EU ETS carbon price multiplied by the difference between the annual free allocation to manufacturing plants in the EU ETS and their annual emissions. Excise duty, carbon tax and NORA levy receipts from the Industry sector were estimated using energy use data from the SEAI Energy Balance along with information on tax rates and reliefs.
Receipts from Services sector purchases of ETS emission permits were estimated as the average annual EU ETS carbon price multiplied by the difference between the annual free allocation to Services sector businesses and their annual emissions. Tax receipts from non-ETS Services sector emissions were estimated using energy use data from the SEAI Energy Balance along with information on tax rates and reliefs.
We calculated the average effective carbon rate for marked gas oil (MGO) used in Agriculture and Fishing using energy data from the SEAI Energy Balance and information on the rates of excise duty, carbon tax and the NORA levy that applied to MGO. MGO used for commercial sea-fishing is exempt from all three taxes.
The fuels used for household heating were coal, peat, kerosene, LPG, marked gas oil and natural gas. A low, often zero, rate of excise duty applies to fuels used for heating. All are subject to carbon tax and the NORA levy is applied on kerosene and marked gas oil. Energy use data were obtained from the SEAI Energy Balance and information on tax rates was used to calculate the average effective carbon rate.
We used electricity consumption data from the SEAI Energy Balance and SEAI electricity emission factors to calculate emissions from electricity consumption by all sectors. Net receipts of electricity tax were published by Revenue, and PSO levy receipts were published in the CSO’s Environment Taxes release.
The UN System of Environmental-Economic Accounting (SEEA) is a statistical system that brings together economic and environmental information into a common framework to measure the condition of the environment, the contribution of the environment to the economy, and the impact of the economy on the environment. The SEEA contains an internationally agreed set of standard concepts, definitions, classifications, accounting rules and tables to produce internationally comparable statistics.
Eurostat has developed a series of legal and voluntary environmental accounts modules based on the SEEA, including a new pilot data collection on Potentially Environmentally Damaging Subsidies in 2023. The CSO has published statistical releases on the Eurostat Environment Taxes and Environmental Subsidies and Similar Transfers modules. This release complements those two releases as it enables users to compare the amount raised through energy taxes with the amount spent on fossil fuel subsidies as well as with the amount spent on environmental subsidies aimed at protecting the climate and the air, reducing fossil fuel consumption and increasing the share of renewables.
This CSO release provides data for SDG goal 12. Data for SDG Indicator 12.c.1 was first submitted for Ireland in 2022.
Target 12.c Rationalise inefficient fossil-fuel subsidies that encourage wasteful consumption by removing market distortions, in accordance with national circumstances, including by restructuring taxation and phasing out those harmful subsidies, where they exist, to reflect their environmental impacts, taking fully into account the specific needs and conditions of developing countries and minimising the possible adverse impacts on their development in a manner that protects the poor and the affected communities.
Indicator 12.c.1 Amount of fossil-fuel subsidies per unit of GDP (production and consumption).
The OECD defines a subsidy as the result of a government action that confers an advantage on consumers or producers in order to supplement their income or lower their costs. This definition is broader than the European System of Accounts definition. Although they do not appear in government budgets or accounts, the OECD definition includes tax expenditures as they constitute a loss of revenue by the government in order to support producer or consumer economic activity. The following WTO definition of a subsidy is also widely accepted:
In the Agreement on Subsidies and Countervailing Measures (ASCM) under the World Trade Organization (WTO), a subsidy shall be deemed to exist if
(a) (1) there is a financial contribution by a government or any public body within the territory of a Member (referred to in this Agreement as “government”), i.e. where:
(i) a government practice involves a direct transfer of funds (e.g. grants, loans, and equity infusion), potential direct transfers of funds or liabilities (e.g. loan guarantees);
(ii) government revenue that is otherwise due is foregone or not collected (e.g. fiscal incentives such as tax credits);
(iii) government provides goods or services other than general infrastructure, or purchases goods;
(iv) a government makes payments to a funding mechanism, or entrusts or directs a private body to carry out one or more of the type of functions illustrated in (i) to (iii) above which would normally be vested in the government and the practice, in no real sense, differs from practices normally followed by governments;
or
(a) (2) there is any form of income or price support in the sense of Article XVI of GATT 1994;
and
(b) a benefit is thereby conferred.
Schemes were included in this release if they were regarded as a subsidy according to the OECD definition and directly benefitted producers or consumers of fossil fuels. Environmental Subsidies and Similar Transfers (ESST) are not included in this release nor are any Fossil Fuel Subsidies included in the ESST release. Support measures established for social policy reasons, such as fuel allowances, have been included in this release if they met these two criteria.
For the purposes of this release, a support is considered a subsidy if it is one of the following types of transaction or assistance:
Type of Direct Transfer | ESA 2010 Definition |
Subsidies (D.3) | Current unrequited payments which general government or the institutions of the European Union make to resident producers. |
Social transfers in kind (D.63) | Goods and services provided for free or at prices that are not economically significant to individual households by government units and non-profit institutions. |
Other current transfers (D.7) | Transfers between resident institutional units, or between resident and non-resident units, other than current taxes on income, wealth, etc., social contributions and benefits, and social benefits in kind. |
Investment grants (D.92) | Capital transfers in cash or in kind made by governments or by the rest of the world to other institutional units to finance all or part of the costs of their acquiring fixed assets. |
Other capital transfers (D.99) | Transfers other than investment grants and capital taxes which do not themselves redistribute income but redistribute saving or wealth among the different sectors or subsectors of the economy or the rest of the world. |
Type of Indirect Supports | Definition |
Tax reduction | Lower rate of tax than the standard rate. |
Tax exemption | Exemption from obligation to pay a particular tax. |
Tax refund | Partial or full repayments of tax already paid. |
Tax credit; tax allowance | Reduction in the amount of tax owed. |
Tax differential | In this release, difference between rates of tax applying to fuels which are being used for similar purposes, e.g. transport or heating. |
Other government revenue forgone | Exemption from royalties on petroleum exploration; under-pricing of government-owned resources. |
Price supports | Capacity payments, price guarantees and other price supports. |
Fossil fuel activities include exploration, extraction, manufacturing, refining and distribution of fossil fuels on the production side, as well as research and development supporting any of the above. Fossil fuel consumption by all sectors of the economy is also included as a fossil fuel activity.
In this release, a fossil fuel subsidy is any subsidy that directly incentivises or supports an increase in these activities. Many transport subsidies indirectly cause an increase in fossil fuel consumption. Transport subsidies are not included as fossil fuel subsidies but a list of transport subsidies is included in the Background Notes for information.
We divided supports into direct supports such as investment grants, and indirect supports such as tax expenditures. Data on direct supports were mainly obtained from government appropriation accounts, the annual accounts of government departments and agencies, and through requests to the relevant government department or organisation. An example of a direct subsidy is the PSO Levy support to electricity generation from peat.
Tax expenditures are defined relative to a system of benchmark taxes. Benchmark tax rates are the standard, conventional rates applied to economic transactions and activities in the economy. Tax expenditures are reductions in potential revenue due to deviations from the standard rates. The lower rates are intended to incentivise behaviour that meets particular policy objectives. Data on tax expenditures were mainly obtained from Revenue, or estimated using information from Revenue. An example of a tax expenditure is the reduced excise duty on road diesel compared with petrol.
The OECD has outlined three approaches to measuring tax expenditures:
The CSO uses the revenue forgone approach to calculating tax expenditures in this release. A table of benchmark taxes used for these calculations is shown below. A number of tax expenditures are due to differentials in excise duty rates on fuels used for certain purposes.
The Capacity Remuneration Mechanism, which is designed to ensure sufficient electricity generation capacity is available when demand is high, was included in this release for the first time as a price support to mainly fossil fuel-based electricity generators. The full annual payments were included, across fuel types and generation taking place in Ireland and Northern Ireland.
The table shows the benchmark tax rates used in this release for calculations of tax expenditures.
Type of Tax | Specific Tax from Irish Regime | Unit | Benchmark Tax Rate, 2021 |
Excise Duty on Hydrocarbon Oils used in Transport/Industry (exclusive of Carbon Tax) | Excise Duty on Petrol (exclusive of Carbon Tax) | € per 1,000 litres | 541.84 |
Excise Duty on Hydrocarbon Oils used for Heating (exclusive of Carbon Tax) | Energy Tax on Marked Gas Oil (exclusive of Carbon Tax) | € per 1,000 litres | 47.36 |
Excise Duty on Electricity | Electricity Tax for non-Business Use | € per MWh | 1.00 |
VAT on Energy Products | Standard VAT Rate | % | 23 |
Direct Fossil Fuel Subsidies | In operation in 2021? | Data Availability? |
Petroleum exploration and production promotion and support (PEPPS) Scheme | Y | Y |
Government fossil fuel R&D funding | Y | Y |
Science Foundation Ireland fossil fuel R&D funding | Y | Y |
PSO levy: electricity generation from peat | Y | Y |
PSO levy: security of supply | N | Y |
Electricity allowance | Y | Y |
Gas allowance | Y | Y |
Fuel allowance | Y | Y |
Other supplements (including heating) | Y | Y |
Smokeless coal allowance | N | Y |
Fuel grant for disabled drivers/passengers | Y | Y |
Tax expenditures and Other Government Revenue Forgone | Type of Revenue Forgone | In operation in 2021? | Data Availability? |
Zero royalties on gas and oil production | Royalty | Y | Y |
Expensing of exploration and development costs | Corporation Tax | Y | N |
Stamp duty relief on licences and leases granted under Petroleum and Other Mineral Development Act, 1960, etc. | Stamp Duty | Y | N |
Diesel rebate scheme for hauliers and passenger transport | Excise | Y | Y |
Fuel excise repayment for disabled drivers/passengers | Excise | N | Y |
Tax differential: road diesel relative to transport benchmark | Excise | Y | Y |
Tax differential: road LPG relative to transport benchmark | Excise | Y | Y |
Reduced tax rate on scheduled passenger road transport services | Excise | N | N |
Road diesel VAT refund for businesses | VAT | Y | Y |
Fuel excise repayment for commercial sea navigation | Excise | Y | Y |
Jet kerosene excise exemption | Excise | Y | Y |
Free allocation of emissions allowances to airline operators within EU ETS | Cost of Allowances | Y | Y |
Aviation gasoline excise repayment | Excise | Y | Y |
Marine diesel scheme | VAT | Y | Y |
Jet kerosene excise exemption | Excise | Y | Y |
NORA levy Exemptions | NORA Levy | Y | Y |
Fuel oil excise exemption for manufacture of alumina | Excise | N | Y |
Fuel excise repayment for horticulture | Excise | Y | Y |
Tax differential: marked gas oil relative to heating and transport benchmarks | Excise | Y | Y |
Natural Gas Carbon Tax exemption for certain industrial uses | Carbon Tax | Y | N |
Solid Fuel Carbon Tax exemption for certain industrial uses | Carbon Tax | Y | N |
Relief for increase in carbon tax on farm diesel | Carbon Tax | Y | Y |
Free ETS emission permits: stationary installations | Cost of Allowances | Y | Y |
Tax differential: fuel oil relative to heating and transport benchmarks | Excise | Y | Y |
Tax differential: kerosene relative to heating benchmark | Excise | Y | Y |
Tax differential: LPG relative to heating benchmark | Excise | Y | Y |
Zero non-carbon excise rate on coal | Excise | Y | N |
Zero excise rate on peat | Excise | Y | N |
Zero non-carbon excise rate on natural gas | Excise | Y | N |
Solid Fuel Carbon Tax exemption under diplomatic arrangements | Carbon Tax | Y | N |
Reduced VAT rate on energy products | VAT | Y | Y |
Electricity tax exemption for household use | Excise | Y | Y |
Electricity tax reduction for business use | Excise | Y | Y |
Relief from taxation on electricity used for certain industrial purposes/generated in certain circumstances | Excise | Y | N |
Price Supports | In operation in 2021? | Data Availability? |
Capacity remuneration mechanism/Capacity payment mechanism | Y | Y |
The Petroleum Infrastructure Programme (PIP) was set up by the Petroleum Affairs Division (PAD) of the Department of Communications, Marine and Natural Resources in 1997. It consisted of three sub-programmes: the Offshore Support Group, the Rockall Studies Group, and the Porcupine Studies Group. It was replaced by the Petroleum Exploration and Production Promotion and Support (PEPPS) in 2003. PEPPS consisted of two sub-programmes, the Expanded Offshore Support Group and the Irish Shelf Petroleum Study Group (ISPSG).
The overall aims of PIP/PEPPS were to promote hydrocarbon exploration and development activities by strengthening local support structures and funding research. PIP/PEPPS were funded by oil and gas companies with Irish offshore exploration licences. Some of the funding was used for environment-related research, for example the ObSERVE programme, which was an aerial and acoustic marine wildlife survey carried out from 2015-2018. These amounts were excluded from the funding reported here.
The Petroleum Infrastructure Programme (PIP) was terminated in 2021.
These figures are submitted by the SEAI to the International Energy Agency (IEA) annually. The IEA maintains a database of fossil fuel research funding.
ICRAG carries out research under a number of pillars, formerly including Energy Security. This SFI-funded research was aimed at "finding and producing hydrocarbons from offshore sedimentary basins". In addition the purpose was described as "to strengthen Ireland’s position as an international leader in key hydrocarbon research themes, and to advise government in optimising exploration and development strategies by provision of independent scientific information and exploration models." The centre partners with a number of petroleum companies as well as other industry partners. ICRAG also carries out research into environmental protection areas such as marine geoscience and groundwater protection. This funding will be included in the CSO Environmental Subsidies and Similar Transfers release.
The tax regime in Ireland was overhauled between 1987 and 1992 with the policy aim of incentivising fossil fuel activities by petroleum companies. The fiscal terms that apply to production from a Petroleum Lease are determined by the date of the award of the initial authorisation. In certain circumstances it is possible for production from leases obtained between 1987 and 2014 to result in no tax or royalty payments, e.g. if capital costs are used to write off the corporation tax that would otherwise owe on profits. Before 1987 and after 2014 a minimum payment was due in all circumstances, charged on gross revenue from the field. We have used a simple approach to obtain an estimate of the fossil fuel subsidy to producers in Ireland by calculating it as a royalty of 12.5% that would owe on the gross revenue from a producing field.
Capital expenditure on exploration, development and production extending back 25 years, including on fields other than the field in production, can be written off at a rate of 100% against profits from the field. The “tax losses” can be carried forward indefinitely by oil and gas companies. There are no data available on this subsidy.
In 2013 there were 11 claims for this relief at a cost of €10,000, according to the Department of Finance report on Tax Expenditures from October 2015. Since then the number of claims has been below ten and the cost has not been estimated, or data are not available. There are no data available for years previous to 2013.
The PSO Levy is charged to electricity consumers in Ireland and was used to subsidise electricity generation from peat and from renewable sources, as well as generation from fossil fuels to ensure security of supply. We included the portions that go towards electricity generation from peat and security of supply as fossil fuel subsidies while the portion that supports electricity generation from renewable sources is included as an environmental subsidy in our Environmental Subsidies and Similar Transfers release.
The Commission for Regulation of Utilities (CRU) publishes an annual decision paper on the amount of the subsidy from October 1st in a given year until September 30th the following year. We have assigned the figure published by the CRU to the calendar year in which the majority of the subsidy year lies.
The PSO levy support for security of supply was terminated in 2016 while 2021 was the final year of PSO levy support to electricity generation from peat.
The Disabled Drivers and Disabled Passengers Scheme provides a range of tax reliefs linked to the purchase and use of specially constructed or adapted vehicles by drivers and passengers with a disability. A person who qualifies for tax relief under the Disabled Drivers and Disabled Passengers Scheme will also qualify for the fuel grant.
The Diesel Rebate Scheme came into effect on 1 July 2013. To qualify for inclusion in this scheme, road transport operators must hold an appropriate road transport licence. Road haulage operators must hold either a national or international road haulage operator's licence, while passenger transport operators must hold either a national road passenger transport operator’s licence or international road passenger transport operator’s licence.
This scheme was a precursor to the Fuel Grant. It was a repayment of excise duty on transport fuels for disabled drivers and passengers.
Excise duty (excluding carbon tax) on road diesel was €425.72 per 1,000 litres in 2021, while the petrol rate was €541.84 per 1,000 litres. The revenue forgone by the State due to the reduced tax rate on road diesel compared to a benchmark or reference rate of the excise duty on petrol was calculated as the difference in the rates multiplied by the excise volume of road diesel.
Excise duty (excluding carbon tax) on road LPG was €63.59 per 1,000 litres in 2021, while the petrol rate was €541.84 per 1,000 litres. The revenue forgone by the State due to the reduced tax rate on road LPG compared to a benchmark or reference rate of the excise duty on petrol was calculated as the difference in the rates multiplied by the excise volume of road LPG.
This reduced excise rate of €22.72 per 1,000 litres for road transport operators was in place until 2008. Road passenger services can now avail of a rebate on road diesel under the Diesel Rebate Scheme (see above).
Businesses in Ireland can apply for a refund of VAT paid on road diesel used for business purposes. The figures are estimated by the CSO using business expenditure on road diesel from the CSO Business Energy Use survey. The calculation measures the potential subsidy if all eligible businesses claim the refund so is likely to overestimate the actual amount claimed.
This scheme follows from a European Council Directive which sets a low minimum rate of taxation on energy products supplied for use as fuel for the purposes of navigation within Community waters (including fishing).
This is a tax exemption for jet kerosene used for commercial aviation. The figures are estimated using the volume of jet kerosene purchased in Ireland as published by the SEAI (Energy Balances). The reference excise charge was taken to be the rate on heavy oil used for air navigation, i.e. €515.38 per 1,000 litres in 2021, including carbon tax.
Excise duty (excluding carbon tax) on marked gas oil was €47.36 per 1,000 litres in 2021, while the petrol rate was €541.84 per 1,000 litres. The revenue forgone by the State due to the reduced tax rate on marked gas oil compared with a benchmark or reference rate of the excise duty on petrol is calculated as the difference in the rates multiplied by the excise volume of marked gas oil.
Aviation gasoline that has been used for a commercial or business purpose is subject to a refund at a rate of €232.27 per 1,000 litres.
This scheme is a repayment of VAT paid on marked gas oil, marked kerosene, or fuel oil used for combustion in the engine of a registered, qualifying sea-fishing vessel.
Estimates of the tax expenditure due to the zero rate of VAT on jet kerosene for international commercial flights were made based on data from the SEAI Energy Balance and international jet kerosene prices.
This is a tax exemption for fuel oil used to manufacture alumina. The figures are estimated using the volume of heavy oil for alumina manufacture and residual fuel oil published by Revenue, with excise charged at a rate of €13.45 per 1,000 litres from 2000-2004, and €14.78 per 1,000 litres from 2005-2017.
This is partial repayment of mineral oil tax paid on heavy oil (diesel, kerosene and fuel oil) and liquefied petroleum gas (LPG) used in horticultural production and in the cultivation of mushrooms.
Excise duty (including carbon tax) on fuel oil was €14.78 per 1,000 litres in 2021, while excise on marked gas oil was €47.36 per 1,000 litres and the petrol rate was €541.84 per 1,000 litres. The revenue forgone by the State due to the reduced tax rate on fuel oil compared with a benchmark or reference rate of the excise duty on fuel used for transport/industry is calculated as the difference in the rates multiplied by the volume of fuel oil purchased.
Currently no estimates made.
The relief for increase in carbon tax on farm diesel allows farmers to claim a tax deduction equal to the difference between the amount of carbon tax paid on farm diesel and the amount of carbon tax that would have been paid had the rate stayed at €41.30 per 1,000 litres, which was the rate in 2010.
The EU Emissions Trading Scheme commenced in 2005. Airline operators were included from 2012. An emission permit allows the holder to emit one tonne of carbon dioxide. Major emitters of greenhouse gases were provided with free allowances of emission permits. The revenue forgone due to the free allocation of emission permits is calculated as the annual free allocation multiplied by the annual average price of a permit at auction.
The electricity allowance is part of the Household Benefits Package, which is available to all householders over 70 and to householders under 70 in certain circumstances. Electricity is generated from a mix of fossil and renewable resources, therefore a proportion of the electricity allowance equivalent to the proportion of electricity generated from renewable sources has been removed from each annual amount.
This is a tax exemption for household electricity consumption. The figures are estimated using SEAI figures on residential electricity use, with excise charged at a rate of €1.00 per MWh (Megawatt-hour), the rate applied to electricity use by non-business users in 2021. The subsidy was pro-rated by the proportion of electricity generated from fossil sources.
This was a reduced excise rate for business electricity consumption compared with non-business consumption until 2019. The business and non-business rates were equalised in 2020, removing this subsidy. The subsidy was pro-rated by the proportion of electricity generated from fossil sources.
Currently no estimates made.
Currently no estimates made.
The gas allowance is part of the Household Benefits Package, which is available to all householders over 70 and to householders under 70 in certain circumstances. The fuel allowance is a social welfare payment to households. It is a means-tested subsidy towards the cost of fuel with the objective of preventing fuel poverty. A coefficient of 0.4 is applied to the heating supplement to take account of the fact that it is only partly used to support households with their heating costs. This coefficient is also applied to the fuel allowance to account for purchases of wood and for other non-fossil fuel purchases. The smokeless coal allowance was paid to low-income households to help them meet the extra costs of using smokeless or low smoke fuels.
Kerosene was exempt from the non-carbon component of excise duty in 2021, while excise on marked gas oil was €47.36 per 1,000 litres. The revenue forgone by the State due to the reduced tax rate on kerosene compared with a benchmark or reference rate of the excise duty on fuels used for heating is calculated as the difference in the rates multiplied by the volume of kerosene purchased.
Non-road LPG was exempt from the non-carbon component of excise duty in 2021, while excise on marked gas oil was €47.36 per 1,000 litres. The revenue forgone by the State due to the reduced tax rate on other LPG compared with a benchmark or reference rate of the excise duty on fuels used for heating is calculated as the difference in the rates multiplied by the volume of other LPG purchased.
Currently no estimates made.
No data availability
Energy products are subject to the reduced rate of VAT at 13.5%. Estimates of the revenue forgone due to the reduced rate versus the standard rate (23%) were made using data on personal consumption expenditure on electricity, gas, solid fuels and liquid heating fuels from National Accounts.
The NORA Levy does not apply on fuel used for international aviation or maritime transport. Companies that hold sufficient levels of oil stocks are also exempt from the NORA Levy.
Transport subsidies may indirectly increase carbon dioxide emissions from fossil fuel combustion. Transport subsidies identified to date include the PSO Air Services Scheme, VAT Relief for Touring Coaches, VRT reliefs, exemptions and repayments, tax relief on multi-storey carparks, VAT exemption for airline tickets on international flights, and the removal of the Air Travel Tax.
Revisions were carried out on EU ETS emission permit purchases assigned to the aviation, electricity generation, industry and services sectors in this release. This resulted in changes to the data on ECRs for aviation and electricity generation across the time series, with an upwards revision taking place in general. Minor revisions were made to the ECRs from the previous year (2020) for a number of sectors including water transport, services, household heating and rail transport. These were due to minor revisions in the data sources used to carry out the calculations.
This release includes figures for the Capacity Remuneration Mechanism for the first time, resulting in an upwards revision of the figure reported for fossil fuel subsidies. As an indication of the impact of the inclusion of this price support, the Capacity Remuneration Mechanism had a cost of €358 million in 2021, while total fossil fuel subsidies were measured as €2.9 billion.
The Road diesel VAT refund for businesses was revised downwards in this release based on revisions to business road diesel consumption in the CSO Business Energy Use survey.
A minor change in methodology for tax differential revenue forgone calculations was applied: the difference in non-carbon components of excise tax were used for the calculation instead of full rates, as the carbon component is already equal in terms of carbon dioxide emissions.
This release will be published annually.
Learn about our data and confidentiality safeguards, and the steps we take to produce statistics that can be trusted by all.