Maureen O'Sullivan (Dublin Central, Independent)
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Question 142: To ask the Minister for Finance if he is satisfied that the arrangements for designating marked diesel, green diesel, agricultural diesel, farm diesel are fully in line with Ireland's environmental obligations and commitments at EU level, in view of the incentive they create that is being exploited on an ongoing basis to wash the marked diesel clear with disastrous environmental consequences; if any alternative strategy is under consideration to provide for subsidised diesel for use in agriculture; and if he will make a statement on the matter. [10711/12]

Michael Noonan (Limerick City, Fine Gael)
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The taxation and designation of marked gas oil for specific uses is in line with the EU Energy Taxation Directive and Ireland's environmental obligations. In addition, I am informed by the Revenue Commissioners, who are responsible for the collection of mineral oil tax and for tackling the illicit trade in mineral oil products, that they are acutely aware of the various illegal activities that lead to loss to the Exchequer of mineral oil tax and can have a harmful impact on the environment. The most serious risk in this regard is the large scale laundering of markers from mineral oil (diesel), and the onward supply and sale of the laundered product as auto diesel. Marked mineral oil is subject to a reduced rate of mineral oil tax on condition that it is not used in road vehicles. The suggestion has been made that the present system of marking diesel for non-auto use should be replaced by one in which all diesel would be subject to the same rate of mineral oil tax, with repayment arrangements for certain users. A system of this kind would, however, give rise to additional administrative work for both the users concerned and for the Revenue Commissioners, would impose cash flow costs on users and could be open to fraud and abuse. The focus, therefore, is on strengthening the existing regime for taxing diesel at differential rates, including the implementation of enhanced licensing systems, acquiring a more effective marker, and continued robust enforcement action.

The Finance Bill 2012 proposes to enhance the supervision and control of the mineral oils supply chain by requiring that, in future, any person dealing in marked mineral oils will have to be licensed by the Revenue Commissioners to do so. It is envisaged that this important change will be complemented by amendments to the Mineral Oil Tax Regulations that will lay down new requirements for the recording and reporting of transactions by mineral oil traders.