Robert Troy (Longford-Westmeath, Fianna Fail)
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182. To ask the Minister for Finance the revenue protection measures in place to ensure that all compressed natural gas complies with the relevant statutory requirements - blending and excise and carbon tax rates - in the same way as customs officials test for marked fuel oil; and the way in which he plans to ensure that gas intended for the heating market is not used for road transport purposes. [7002/19]

Paschal Donohoe (Dublin Central, Fine Gael)
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Taxation of natural gas is based on the purpose for which the fuel is used. Natural gas that is supplied to consumers for non-propellant fuel use, such as for heating, is subject to Natural Gas Carbon Tax (NGCT). The current rate of NGCT is €4.10 per megawatt hour. Suppliers of natural gas for non-propellant use are liable to account for and pay NGCT and must register with Revenue in advance of making supplies to consumers.

Natural gas supplied for use as a propellant, referred to as “vehicle gas” or Compressed Natural Gas (CNG), is subject to Mineral Oil Tax on Vehicle Gas (MOTVG). MOTVG is provided for by Section 38 of the Finance Act 2016. These legislative provisions were introduced to provide a framework for taxation of vehicle gas in advance of the development of nationwide infrastructure for compressed natural gas filling stations.

The current rate of MOTVG is €9.36 per megawatt hour. This includes both a carbon charge of €3.70 and a non-carbon charge of €5.66. Liability to MOTVG arises when vehicle gas is supplied to a vehicle fuelling facility. The supplier who supplies the vehicle fuelling facility is liable to account for and pay MOTVG and must register with Revenue.

Under MOTVG legislation vehicle gas suppliers are obliged to only supply vehicle gas to vehicle fuelling facilities that have specialised meters fitted by the Transmission System Operator (Gas Networks Ireland). These meters must exclusively serve as the measuring and recording mechanisms for vehicle gas supplied to vehicle fuelling stations. In addition to these control mechanisms, MOTVG legislation also prevents vehicle fuelling stations from receiving vehicle gas from a supplier unless the station has been fitted with specialised meters and all vehicle fuel received at the station is measured and recorded by the meter fitted for that exclusive purpose. In this way there are strict controls in place for both the supply and receipt of vehicle gas.

The controls that are in place in relation to mineral oils, such as marking of reduced rate oils, are not applicable to natural gas. I am informed by the Revenue Commissioners that Mineral Oil Tax Regulations governing the blending of fuel oils are not applicable to blending of natural gas with, for example, biogas. Marking and blending statutory provisions similar to those that apply for mineral oils are unwarranted for natural gas that is supplied through the natural gas network by a limited number of suppliers.

The Revenue Commissioners are satisfied that legislative provisions for NGCT and for MOTVG are robust. They will continue to monitor the situation as the Compressed Natural Gas market expands and will focus audit and compliance interventions on risk areas should they emerge. It is also open to the Deputy to make direct contact with Revenue if he wishes to seek further information or advise of any specific concern he may wish to raise in this area.