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Fossil fuel subsidies were €4.7 billion in 2022, up from €2.8 billion in 2021, as a number of temporary Government support measures, including direct subsidies to households and tax rate reductions on petrol and diesel, were introduced in response to rising energy prices.
Relative to modified gross national income (GNI*), fossil fuel subsidies went from 1.2% of GNI* in 2021 to 1.8% in 2022.
Direct fossil fuel subsidies such as Household Energy Credits accounted for 22% of total fossil fuel subsidies in 2022, while indirect subsidies such as tax expenditures accounted for 78%.
In 2022, €2.8 billion was raised in energy taxes while €0.7 billion was spent on environmental subsidies related to energy and air emissions, and fossil fuel subsidies were €4.7 billion.
In 2022, net energy taxes on petrol were 52 cent per litre, down from 63 cent per litre in 2021, while net energy taxes on road diesel were 44 cent per litre, down from 53 cent per litre in 2021.
Consumers buying petrol paid an average effective rate of €220 per tonne of carbon dioxide emitted in 2022, a decrease of 18% on the 2021 rate of €269 in 2021.
The average effective carbon rate on road diesel for consumers was €164 per tonne of carbon dioxide in 2022, down from €196 in 2022. The average effective carbon rate for consumers buying marked gas oil used in agriculture and fishing was €52 per tonne of carbon dioxide in 2022 compared with €62 in 2021.
Carbon dioxide emissions from jet kerosene were charged at €26 per tonne in 2022, up from €5 per tonne in 2021. Commercial aviation is exempt from excise tax, but airline operators must purchase emission permits for flights covered by the EU Emissions Trading System (EU-ETS).
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Statistician's Comment
The Central Statistics Office (CSO) has today (26 September 2024) released Fossil Fuel Subsidies 2022.
Commenting on the release, Clare O'Hara, Statistician in the Environment Division, said: "Total fossil fuel subsidies in 2022 were €4.7 billion, an increase in value of €1.9 billion compared with 2021, when fossil fuel subsidies were €2.8 billion in current prices (See Figure 2.1 and Table 2.1).
Fossil Fuel Subsidies
In 2022, a number of temporary measures were introduced by the Government in response to rises in energy prices. The temporary measures included direct subsidies to households and businesses to reduce energy costs, as well as tax rate reductions on fossil fuels such as petrol and diesel. The total amount in fossil fuel subsidies resulting from these measures was estimated at €1.1 billion, or more than half of the increase in value of fossil fuel subsidies in 2022 (See Table 2.2).
Relative to modified gross national income (GNI*), fossil fuel subsidies went from 1.2% of GNI* in 2021 to 1.8% in 2022 (See Figure 2.1 and Table 2.1).
Effective Carbon Rates
The average effective carbon rate of a fuel is the amount of energy tax, such as excise and carbon tax, paid by consumers per tonne of carbon dioxide emitted through combustion of the fuel.
The average effective carbon rate on petrol fell by 18% to €220 per tonne of carbon dioxide in 2022 while the diesel rate fell by 16% to €164 per tonne of carbon dioxide (see Figure 1.1 and Table 1.1). Average effective carbon rates on other fuels including aviation gasoline, rail diesel, and marked gas oil used in agriculture and fishing also decreased. These drops were related to temporary excise and National Oil Reserves Agency (NORA) levy rate reductions introduced in 2022 in response to rises in energy prices, which outweighed increases in carbon tax on these fuels.
The average effective carbon rate on jet kerosene went up from €5 to €26 per tonne of carbon dioxide in 2022, while the average rate on fuels used for electricity generation rose from €50 to €75 per tonne of carbon dioxide. Both increases resulted from a rise in the average price at auction of EU-Emissions Trading System (ETS) permits.
The highest average effective carbon rate per tonne of carbon dioxide in 2022 was €220 for petrol. The average effective carbon rate for road diesel was €56 lower at €164 per tonne of carbon dioxide due to the lower excise duty rate. The average effective carbon rate for marked gas oil, sometimes referred to as ‘green diesel’, used in agriculture, forestry and fishing was €52 per tonne of carbon dioxide.
Net Energy Tax per Litre
This release also contains data on net average energy taxes per litre on selected fuels. In 2022, net energy taxes on petrol were 52 cent per litre, of which 41 cent was excise duty (excluding carbon tax), 9 cent was carbon tax, and 2 cent was the NORA levy. Net energy tax per litre on road diesel was 44 cent per litre (See Figure 1.2 and Table 1.2A).”