Seán Conlan (Cavan-Monaghan, Fine Gael)
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211. To ask the Minister for Finance if he will review the carbon tax, in view of the competitive disadvantage suffered by suppliers in the southern border counties, in comparison to their northern counterparts; and if he will make a statement on the matter. [6655/15]

Michael Noonan (Limerick City, Fine Gael)
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Carbon tax was introduced in Budget 2010 on a phased basis.  Initially it applied only to transport fuels, then to other liquid fuels such as kerosene and agricultural diesel and lastly it was extended to solid fuels in 2013.

In the most recent cross border price comparison, which was carried out by the Revenue Commissioners in October 2014, petrol and diesel were significantly cheaper in the south whilst home heating oils were a fraction of a cent more expensive in the south.  Petrol was cheaper by 18 cent per litre and diesel was cheaper by 31 cent per litre in the south.  Kerosene was 0.15 cent more expensive per litre and home heating diesel was 0.04 cent more expensive per litre in the south.   Coal and peat are not among the products compared as part of this survey.

The application of carbon tax to solid fuels was delayed to allow for the development of a robust mechanism to counter the large scale sourcing of coal from Northern Ireland where lower sulphur standards apply. The Department of the Environment undertook to provide such a robust mechanism in conjunction with the National Standards Authority of Ireland (NSAI). Such a mechanism is in place since June 2011 and the Air Pollution Act (Marketing, Sale, Distribution and Burning of Specified Fuels) Regulations 2012 specify the environmental standards for coal placed on the market and provide the regulatory framework in relation to the distribution and sale of coal in the State.

In particular, the Regulations require that all bituminous coal sold and used outside smoky coal ban areas for residential use must have a sulphur content of no more than 0.7%, which is lower than that in Northern Ireland and therefore bituminous coal supplied to Northern Ireland standards for sale on that market may not be sold in the State. Compliance with the Regulations is being enforced by local authorities. A verification mechanism, SWiFT 7, has been developed by the National Standards Authority of Ireland (NSAI) for the verification of sulphur content in coal. This provides for a robust mechanism to verify the sulphur content of coal to national standards. Suppliers who produce and supply solid fuels in contravention of the Regulations are subject to investigation and prosecution under the Air Pollution Act by local authorities charged with enforcing the regulations and preventing such supply.

Budget 2013 commenced the application of carbon tax to solid fuels but I chose not to introduce the carbon tax on solid fuels until after the 2012/2013 winter period and opted to introduce the tax in two phases i.e. €10 per tonne of CO2 from 1st May 2013 and a further €10 per tonne of CO2 from 1st May 2014 thus bringing the carbon tax on solid fuels in line with that on all other fossil fuels, i.e. at €20 per tonne of CO2.

The introduction of Carbon Tax was about sending a price signal that there is a cost associated with the consumption of fossil fuels to the detriment of the environment. In this regard solid fuels have the highest carbon content of all fossil fuels. As a result they are considered the dirtiest fuels and given the environmental impact it is important that they are taxed.

The provisional carbon tax receipts for 2014 are €385.2m.

Coupled with the long lead in period to the implementation of carbon tax on solid fuels this Government has also provided, through the Sustainable Energy Authority of Ireland, generous grants via Better Energy Homes and also provides home energy upgrades free of charge to vulnerable households via Better Energy Warmer Homes to reduce dependance on combustion of fossil fuels for home heating.  In 2014 the Better Energy programme provided €53m grant support towards €118m energy upgrade works.

Accordingly I do not intend to review the rate of carbon tax.