Joe Carey (Clare, Fine Gael)
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Question 70: To ask the Minister for Finance the reason behind the introduction of the 8.7% carbon tax on agricultural diesel as against the 4.4% levy on road diesel; and if he will make a statement on the matter. [16156/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I announced in Budget 2010 that a carbon tax at a rate of €15 per tonne was 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 Budget announcements on the carbon tax have now been enacted into legislation through the Finance Act 2010.

The new carbon charge is based on the emissions that arise from the fuel used. Consequently the carbon tax charge in respect of marked gas oil and auto-diesel (which are almost identical fuels) is around the same i.e. 4.1 cents and 3.9 cents per litre respectively (excluding VAT). The carbon tax charge is marginally higher for marked gas oil because it is a slightly denser fuel with slightly higher emissions than auto-diesel.

While the percentage increase in the price of marked gas oil arising from the introduction of the carbon tax is higher than in the case of auto-diesel, this is a function primarily of the fact that marked gas oil has a lower base price due to the considerably lower level of excise duty on that product compared to auto-diesel.