Paul Kehoe (Wexford, Fine Gael)
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Question 324: To ask the Minister for Communications, Energy and Natural Resources if his Department has discussed the new system of carbon taxation with the Department of Finance; his views on the impact of the application of this carbon taxation to fuels such as bio-diesel which are reducing carbon output here; if he has raised the issue of carbon taxation with the Department of Finance and has proposed amending the system of carbon taxation to ensure that carbon reducing and environmentally friendly fuels are not subject to a carbon levy; and if he will make a statement on the matter. [5985/10]

Eamon Ryan (Dublin South, Green Party)
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It was 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 by the relevant Departments for administrative ease. However, I gather that the Minister for Finance has received a number of representations concerning this approach and that the long-term approach in relation to the treatment of biofuels is being further considered as part of the Finance Bill process.

Both my officials and I have had a series of discussions on this subject with the Department and Minister for Finance since late November.