Paschal Donohoe (Dublin Central, Fine Gael)
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I move amendment No. 62:

In page 83, between lines 29 and 30, to insert the following: "Amendment of Chapter 1 of Part 2 of Finance Act 1999 (Mineral Oil Tax)

51. (1) Chapter 1 of Part 2 of the Finance Act 1999 is amended—

(a) in section 94(1), by the insertion of the following definitions:

" ‘appropriate procedure’ means—

(a) in relation to biofuel for use as a propellant, and vehicle biogas, the procedure established by the National Oil Reserves Agency under Regulation 4(1) of the European Union (Biofuel Sustainability Criteria) Regulations 2012 (S.I. No. 33 of 2012), and

(b) in relation to biofuel for use other than as a propellant, the procedure established under Regulation 7(1) of the European Union (Renewable Energy) Regulations (2) 2022 (S.I. No. 350 of 2022) by the competent authority referred to in the said Regulation 7(1) or, where no such procedure has been established, the procedure referred to in paragraph (a);

‘sustainability and greenhouse gas emissions saving criteria’ means the sustainability and greenhouse gas emissions saving criteria laid down in Article 29 of Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018;",

and

(b) in section 100—

(i) in subsection (1), by the substitution of the following paragraph for paragraph (f):

"(f) to be intended solely for use, or to have been solely used, to produce electricity, where that electricity is—

(i) subject to electricity tax under section 58(1) of the Finance Act 2008 or is supplied for consumption outside the State, and

(ii) produced in an installation that is covered by a greenhouse gas emissions permit.",

(ii) by the insertion of the following subsection after subsection (1):

"(1A) Subject to such conditions as the Commissioners may prescribe or otherwise impose, a relief from mineral oil tax exclusive of the carbon charge, shall be granted on any mineral oil that is shown to the satisfaction of the Commissioners to be intended solely for use, or to have been solely used, to produce electricity, where that electricity is subject to electricity tax under section 58(1) of the Finance Act 2008 or is supplied for consumption outside the State.",

(iii) by the substitution of the following subsection for subsection (5):

"(5) Subject to such conditions as the Commissioners may prescribe or otherwise impose, a relief from the carbon charge shall apply—

(a) to any mineral oil that is—

(i) shown to the satisfaction of the Commissioners to be biofuel, and

(ii) demonstrated, in accordance with the appropriate procedure, to be in compliance with the sustainability and greenhouse gas emissions saving criteria,

or

(b) where biofuel which meets the requirements of paragraph (a) has been mixed or blended with any other mineral oil, to the biofuel content of any such mixture or blend.",

(iv) by the substitution of the following subsection for subsection (5A):

"(5A) Subject to such conditions as the Commissioners may prescribe or otherwise impose, a relief from the carbon charge shall apply—

(a) to any vehicle gas that is—

(i) shown to the satisfaction of the Commissioners to be vehicle biogas, and

(ii) demonstrated, in accordance with the appropriate procedure, to be in compliance with the sustainability and greenhouse gas emissions saving criteria,

or

(b) where vehicle biogas which meets the requirements of paragraph (a) has been mixed or blended with any other vehicle gas, to the vehicle biogas content of any such mixture or blend.",

(v) by the insertion of the following subsection after subsection (5A) (amended by subparagraph (iv)):

"(5B) (a) Where—

(i) relief from mineral oil tax has been availed of in respect of biofuel or vehicle biogas in accordance with subsection (5) or (5A), as the case may be, and

(ii) it is determined, in accordance with the appropriate procedure, that the said biofuel or vehicle biogas is not in compliance with the sustainability and greenhouse gas emissions saving criteria,

then, a liability to mineral oil tax, equal to the amount of relief availed of in respect of that biofuel or vehicle biogas, shall arise.

(b) Notwithstanding paragraphs (a) and (b) of section 95(2), where a liability to mineral oil tax arises under paragraph (a) of this subsection, the liability shall apply from the date on which the person who availed of the relief is notified, in accordance with the appropriate procedure, of the determination referred to in the said paragraph (a) of this subsection.",

and

(vi) in subsection (6)(a), by the insertion of ", other than in the case of mineral oil to which subsection (1)(f) applies," after "greenhouse gas emissions permit,".

(2) Subsection (1) shall come into operation on such day or days as the Minister for Finance may, by order, appoint and different days may be so appointed for different purposes or different provisions.". Section 100 of Finance Act 1999 is being amended to restrict the scope of certain carbon tax reliefs so that Ireland complies with requirements for derogation from the EU’s extended Emissions Trading System, or ETS2. Our national carbon taxes apply to fuels used in ETS2 sectors so participation in trading in ETS2 allowances would effectively give rise to double taxation. To avoid this, we have applied for derogation and must demonstrate that carbon taxes are applied to ETS2 sectors.

To ensure that carbon tax reliefs do not extend to ETS2 sectors, the existing full relief from mineral oil tax for fuels used for electricity production under section 100(1)(f) is being restricted to apply only where the electricity production is carried out in an installation covered by a greenhouse gas emissions permit. As ETS2 entities do not qualify for the relevant greenhouse gas emissions permit, fuel they use for electricity production will be excluded from the scope of full mineral oil tax relief. However, fuel used for electricity production in an installation not covered by a greenhouse gas emissions permit will continue to qualify for relief from the non-carbon component of mineral oil tax. A new subsection (1A) is introduced to provide for this.

As the amendment to the full relief from mineral oil tax for fuels used for electricity production introduces a greenhouse gas emission permit condition, it is necessary to amend the relief provided for in section 100(6)(a) as the provisions already include a greenhouse gas emissions permit condition. Section 100(6)(a) is amended so that the relief applies to fuel used other than for electricity production. This amendment does not alter the scope of the existing relief under section 100(6)(a) and is made to ensure that section 100(6)(a) continues to operate independently of section 100(1)(f).

Further amendments to section 100 of the Finance Act 1999 are made to restrict existing carbon tax reliefs for biofuels and vehicle biogas. Currently the reliefs under sections 100(5) and 100(5A) apply to all biofuels and biogas which are produced from biomass. To comply with ETS2 derogation requirements, renewable energy criteria are being added to the relief provisions. The amendments will result in qualification for relief being conditional on the biofuel or vehicle biogas fulfilling the sustainability and greenhouse gas emissions saving criteria set out in Article 29 of the renewable energy directive, Directive 2018/2001. Suppliers will be required to demonstrate compliance with these criteria in accordance with the State’s renewable energy regulatory regimes.

The amendments also include the insertion of a new subsection (5B) which will provide for clawback of any relief granted on biofuel or vehicle biogas that is subsequently determined by the National Oil Reserves Agency, or the relevant competent authority, not to have fulfilled the required sustainability and greenhouse gas emissions saving criteria.

This section is subject to commencement.