Jim O'Callaghan (Dublin Bay South, Fianna Fail)
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221. To ask the Minister for Finance the estimated cost of the introduction of an additional green rebate scheme where the licensed haulier can apply for a rebate of all the excise paid on the non-fossil fuel component of the diesel they have consumed, returned through a new green rebate scheme. [41506/24]

Jack Chambers (Dublin West, Fianna Fail)
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Auto-diesel is liable to excise duty in the form of Mineral Oil Tax (MOT). MOT comprises a carbon and a non-carbon component with respective rates currently €169.96 and €425.72 per 1,000 litres, giving a total MOT rate of €595.68 per 1,000 litres. The Deputy has asked about an excise rebate for the non-fossil component of diesel which I am taking to mean the biofuel portion of fossil diesel/biofuel blends. Biofuels are currently fully relieved from the carbon component of MOT. The relief is not restricted to particular sectors or end-users, and it applies on a proportional basis to fossil diesel/biofuel blends, resulting in an effective MOT rate of €425.72 per 1,000 litres on the biofuel portion of auto-diesel.

In addition to the biofuel relief, the Diesel Rebate Scheme (DRS) is a further relief which provides a partial MOT rebate to licensed road haulage and passenger transport operators for auto-diesel used in qualifying vehicles: road haulage vehicles with a maximum permissible load of not less than 7.5 tonnes and M2 and M3 category passenger vehicles. Under the DRS, a partial rebate of MOT is available when the retail price of auto-diesel exceeds €1.23 per litre, inclusive of VAT. The rebate rate is capped at €75.00 per 1,000 litres and has remained at this level since October 2021. Taking into account the DRS and the biofuel relief, the effective MOT rate on the biofuel portion of auto-diesel blends is currently €350.72 per 1,000 for DRS qualifying operators.

I am advised by Revenue that the potential annual costs of introducing a further rebate scheme to fully relieve MOT for the biofuel portion of auto-diesel, used by DRS qualifying operators, are shown in the following table. These estimates take into account the MOT already relieved under the biofuel relief and the DRS, and are based on the latest volume data for the DRS. Details are provided firstly for all DRS claimants, i.e. qualifying road haulage and passenger transport operators, and secondly for claimants within the scheme identified as road haulage operators. These estimates do not assume any behavioural change, and it should be noted that the introduction of any additional scheme is highly likely to increase the number of claimants.

It should also be noted that the introduction of any sector specific additional biofuel relief would constitute a State aid. In addition, the existing DRS operates in accordance with Articles 7.2 and 7.3 of the Energy Tax Directive (ETD) which allows for a differentiated rate of tax to be applied to auto-diesel used for commercial purposes. As the DRS applies on a selective basis to certain commercial transport operators it is a State Aid and must comply with Commission Regulation (EU) 651/2014, commonly referred to as the General Block Exemption Regulation. Any amendment to the existing DRS scheme, or the introduction of an additional scheme for licensed hauliers would have to comply with State aid rules and ETD requirements including observing a minimum rate of €330 per 1,000 litres for auto-diesel used for commercial purposes.