Paul Kehoe (Wexford, Fine Gael)
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Question 126: To ask the Minister for Finance if he will amend the recently introduced system of carbon taxation to ensure that this tax is not applied to fuels that significantly reduce carbon emissions; and if he will make a statement on the matter. [5983/10]

Paul Kehoe (Wexford, Fine Gael)
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Question 127: To ask the Minister for Finance if he will incentivise consumer choice regarding carbon saving fuels such as bio-fuels by ensuring that all bio-fuels are exempt from the recently introduced carbon tax in the Finance Bill 2010; and if he will make a statement on the matter. [5984/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I propose to take Questions Nos. 126 and 127 together.

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.

A Financial Resolution was adopted on Budget night in respect of petrol and auto-diesel and provided that those conventional transport fuels with a biofuel component of less than 10% would be taxed in full as petrol or auto-diesel as appropriate. However, the carbon tax charge would not apply to the biofuel element where biofuel constitutes more than 10% of the blended petrol or auto-diesel product. Such an approach was deemed necessary for administrative ease, however, I have received a number of representations concerning this approach and consequently the long-term approach in relation to the treatment of biofuels is being further considered as part of the Finance Bill process.