Help & Questions - Home Gas - Carbon Tax

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What is Carbon Tax?

The carbon tax is a Government tax introduced in the 2010 Budget applicable to all CO2 emission sources. The carbon tax will be levied on natural gas customers from the 1st May 2010.

Why has it been introduced?

The imposition of a carbon tax is seen by Government as an effective way of encouraging behavioural change by incentivising companies to bring low carbon products and services to the market. Natural gas is the cleanest of all the fossil fuels as it has the lowest carbon content of any fossil fuel.

Will the same tax be introduced to electricity?

No, electricity is not subject to this carbon tax because the cost of carbon is already built into the electricity price.

Since the commencement of the Single Electricity Market (SEM) in Nov 2007 all generators are obliged to include the FULL cost of Carbon into their prices.

What is the rate of carbon tax?

The carbon tax is levied at a rate of €15 per tonne of CO2. This translates to natural gas as a rate of €0.00277 per kWh consumed. All suppliers of natural gas in Ireland must levy the carbon tax charge on its customers. Full details can be found on www.revenue.ie.

Is the carbon tax subject to VAT?

Yes, carbon tax is subject to a VAT rate of 13.5%.

Are any natural gas customers exempt from having to pay the tax?
Fully exempt:
  • Any natural gas which can be proven for use:
    • for the generation of electricity; or
    • for chemical reduction or in electrolytic or metallurgical processes.
Partially exempt:
  • Any natural gas which can be shown to have been delivered for use by participants of the Emissions Trading Scheme (ETS). For participants in the ETS a carbon tax rate of 0.054 cent per kWh is applied.
Where can I find more information on the carbon tax?

There will be a statement issued by the Government prior to the 1st May 2010 outlining further details about the carbon tax. www.revenue.ie includes information on the carbon tax methodology, figures and calculations.