Michael Creed (Cork North West, Fine Gael) | Oireachtas source

I have a few observations to make on the general issue of mineral oil tax. There is much confusion about the component elements of it. It is probably appropriate in the context of the forthcoming finance Bill that consideration be given to what is liable for mineral oil tax, the carbon tax element of it, and what should be reclassified. It is not often that the Minister is accused of lacking in ambition in the context of the climate area but in the context of mineral oil tax, the classification of some fuels as being liable for mineral oil tax, particularly in the area of home heating, is something that could usefully be revisited in the context of the targets that have been set for reducing emissions in the home heating area. Hydro-treated vegetable oil, HVO, in my view is misclassified at present. It should be removed from mineral oil tax liability where that HVO is used for home heating purposes. The point is well made by a previous speaker that in the context of mineral oil tax, most people understand it to be a tax on fossil fuels.

HVO is not a fossil fuel. By substituting HVO, particularly in the area of home heating, a very significant immediate gain can be made in the context of reduced emissions in the sector. The reduction is up to 90%. I appreciate this issue cannot be dealt with through these resolutions. It would be appropriate, in the context of the Finance Act, to reclassify HVO used for home heating oil from a “substitute fuel”, as it is currently called, to a "biofuel". It would incentivise and enable the 600,000 or 700,000 homes throughout the country, not all of which are in rural Ireland, that currently use home heating oil to significantly reduce their emissions at an affordable cost. The reclassification of this fuel as a biofuel would make that an affordable option for them. It would also enable the Minister to be more ambitious in the context of the blending proposal in the consultation for the renewable heat obligation. The current proposal is for 2% blending and up to 10% by 2030. In the context of the appropriate tax treatment of biofuels - HVO for heating should be so classified - the industry states that it could deliver double the ambition of the Department's in the home heating sector. This issue is not on the table for tonight's discussion but it would be appropriate to deal with in the finance Bill.

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