Joe McHugh (Donegal North East, Fine Gael)
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Question 234: To ask the Minister for Finance the reason a 9% carbon tax is being imposed on agricultural diesel, while a 4% carbon tax is being imposed on road diesel; and if he will make a statement on the matter. [4726/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I announced in the budget that a carbon tax at a rate of €15 per tonne is being introduced on fossil fuels. The tax was applied to petrol and auto-diesel with effect from midnight, 9 December 2009; and will apply from 1 May 2010 to kerosene, marked gas oil (also known as 'green diesel' or 'agricultural diesel'), liquid petroleum gas (LPG), fuel oil and natural gas. The application of the tax to coal and commercial peat is subject to a Commencement Order.

The carbon tax will result in an increase of approximately 4 cents per litre (excluding VAT) on agricultural diesel, broadly the same as that for regular diesel. However, the carbon tax has a higher percentage price impact on marked gas oil including agricultural diesel because the excise rate on it is considerably lower than that applying to regular diesel.