Michael Lowry (Tipperary, Independent)
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193. To ask the Minister for Finance if carbon tax is levied on domestic and commercial electricity bills; if so, the rate levied; how a person can determine the financial amount levied by the utility supplier on each electrical bill; and if he will make a statement on the matter. [9292/23]

Michael McGrath (Cork South Central, Fianna Fail)
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Ireland’s taxation of fuel and electricity is governed by European Union law as set out in Directive 2003/96/EC, commonly known as the Energy Tax Directive (ETD). The ETD prescribes minimum tax rates for fuel and electricity with which all Member States must comply. Ireland’s national legislation provides for the application of carbon taxes to liquid fuels, natural gas and solid fuels used for motor or heating purposes, in the form of the Mineral Oil Tax (MOT) carbon component, Natural Gas Carbon Tax (NGCT) and Solid Fuel Carbon Tax (SFCT). These carbon taxes operate as excises and their rates are proportional to the carbon dioxide emissions of each fuel type to which they apply.

Carbon taxes do not apply directly to electricity, nor do they apply indirectly as fuels used solely for the generation of electricity are fully exempted from MOT, NGCT and SFCT. In compliance with the ETD, supplies of electricity are subject to Electricity Tax. Electricity Tax operates as an excise and is currently applied at a rate of €1.00 per megawatt hour which is one of the lowest tax rates on electricity across the EU. Electricity Tax law provides for a full exemption to apply to electricity supplied for household use. Further details on Electricity Tax are published on Revenue’s website at www.revenue.ie/en/companies-and-charities/excise-and-licences/energy-taxes/electricity-tax/index.aspx

The supply of electricity is also subject to VAT and earlier this week the Government decided that the temporary application to electricity of the 9% reduced rate of VAT will now continue until end October 2023.

Apart from taxation, the Deputy will be aware that electricity generation is subject to carbon pricing via the EU Emissions Trading Scheme (ETS). The EU ETS is operated in Ireland by the Environmental Protection Agency (EPA) and further information is available from the EPA’s website at www.epa.ie/our-services/licensing/climate-change/eu-emissions-trading-system-/

Finally, the PSO (Public Service Obligation) levy is charged to all electricity customers in Ireland and supports the generation of electricity from sustainable, renewable and indigenous sources. The rate of the PSO levy was amended last year so that from 1st October 2022 to 30th of September 2023 it is a negative rate amounting to an annual credit for electricity consumers of €89.10.