Brendan Smith (Cavan-Monaghan, Fianna Fail)
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175. To ask the Minister for Finance if he is aware of the serious concern of fuel merchants in the Border counties following the imposition of carbon tax on household fuel products; that the viability of many of these businesses is under threat; and that revenue is being lost to the State; his proposals to reduce the level of carbon tax; and if he will make a statement on the matter. [17894/15]

Michael Noonan (Limerick City, Fine Gael)
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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. It should also be noted that 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.

Carbon Tax was introduced in Budget 2010 but its application 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. Such a mechanism is in place since June 2011.

The carbon tax on solid fuels was introduced in two phases i.e. €10 per tonne of CO₂from 1^stMay 2013 and a further €10 per tonne of CO₂from 1^stMay 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.  In 2014 the overall carbon tax yield was €385.36m of which the carbon tax on solid fuels accounted for €17.2m.

While tax increases are unpopular, it makes sense to increase taxes in areas where some benefits can arise, in this instance a carbon tax promotes energy efficiency, reduces emissions and reduces our dependence on imported fossil fuels.

As a matter of principle the reliefs from the carbon tax are limited to ensure as wide an application as possible.  Placing a carbon tax on solid fuels also offers an opportunity to develop cleaner more efficient and environmentally friendly alternative fuels.

Accordingly I have no plans to reduce the level of carbon tax on solid fuels.