Written answers
Tuesday, 12 December 2023
Department of Finance
Customs and Excise
Joe Flaherty (Longford-Westmeath, Fianna Fail)
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248. To ask the Minister for Finance if he will examine the removal of excise from HVO or hydrogenated vegetable oil fuel, given it has 90% reduced emissions and would be transformative if used in fleet operations especially. [54874/23]
Michael McGrath (Cork South Central, Fianna Fail)
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Ireland’s taxation of fuel 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 with which all Member States must comply. ETD provisions on mineral oils are transposed into national law in Finance Act 1999 (as amended). Finance Act 1999 provides for the application of excise duty, in the form of Mineral Oil Tax (MOT) to liquid fuels that are used as motor or heating fuels.
MOT is comprised of a carbon component and a non-carbon component. The carbon component is referred to in legislation as the carbon charge, but it is more commonly referred to as the carbon tax. The non-carbon component of MOT is often referred to as “excise”, “fuel excise”, “fuel tax” or “fuel duty”. It is important to note that both components of MOT are excise. In complying with ETD minimum rates, total MOT rates are taken into account.
MOT law defines a biofuel as being a fuel made from biomass, with biomass defined as the biodegradable fraction of products, waste, and residues from agriculture (including vegetable and animal substances), forestry and related industries, as well as the biodegradable fraction of industrial and municipal waste. Section 100(5) of Finance Act 1999, which has been in place since 2012, provides that biofuels, such as Hydrotreated/Hydrogenated Vegetable Oil (HVO), are fully relieved from the carbon component of MOT.
The table below summarises current MOT rates applicable to biofuels used in place of auto-diesel, petrol and for non-propellant purposes such as heating. For comparison, it also details the MOT rates on auto-diesel, petrol, and Marked Gas Oil.
MOT rates per 1,000 litres effective from 11 October 2023
Fuel type/use | Non-carbon component | Carbon component | Total MOT |
---|---|---|---|
Petrol | €476.80 | €129.59 | €606.39 |
Biofuel used instead of petrol | €476.80 | Fully relieved | €476.80 |
Auto-diesel | €376.94 | €149.89 | €526.83 |
Biofuel used instead of auto-diesel | €376.94 | Fully relieved | €376.94 |
Marked Gas Oil used for non-propellant (e.g. heating) purposes | €17.62 | €131.47 | €149.09 |
Biofuel used for non-propellant (e.g. heating) purposes | €17.62 | Fully relieved | €17.62 |
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