Mattie McGrath (Tipperary, Independent)
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276. To ask the Minister for Finance if he is aware of fuel merchants in Northern Ireland selling fossil fuels in the Republic of Ireland at a price which fuel merchants in the Republic are unable to compete against, which is putting many fuel merchants out of business because the tariffs and taxes imposed in the Republic are much higher than those in Northern Ireland; and if he will make a statement on the matter. [44582/24]

Jack Chambers (Dublin West, Fianna Fail)
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Ireland’s tax law provides for the application of excise duty, in the form of Solid Fuel Carbon Tax (SFCT) to the first supply of coal and peat in the State. Current SFCT rates are available on the Revenue website at: www.revenue.ie/en/companies-and-charities/excise-and-licences/energy-taxes/solid-fuel-carbon-tax/rate-of-tax.aspx. Solid fuel supplies also attract VAT at a rate of 13.5%.

Aside from SFCT and VAT, several other determinants affect solid fuel prices, including global market dynamics, labour costs, exchange rates, as well as pricing practices which may include additional charges to cover transport and distribution. These multifactorial impacts are apparent in recent price trends for coal. Global supply shortages at certain times pushed prices upwards and while SFCT rates increased annually, average prices did not always directly follow the same trajectory. SEAI data indicates that average retail prices in the State for low-smoke coal increased steadily from early 2021, reaching a peak of over €37 for a 40 kg bag in January 2023, and then declined to an average price in October this year of €33.05. The table below provides a breakdown of this average retail price.

Price component Amount (% of retail price)

Northern Ireland’s (NI) lower VAT rate and the absence of a carbon tax contribute to solid fuels prices being generally cheaper there than in the State. In addition, there are different restrictions in NI on the sale of some solid fuels, which can be significantly cheaper than those fuels which meet the State’s environmental standards. This further contributes to price differentials which can incentivise the sourcing of solid fuel from NI.

It is important to note that SFCT is not an import duty and only applies when a first supply has been made in the State. This means that individuals may travel to NI, purchase solid fuels and bring such fuels into the State for their own use, and no SFCT liability arises. However, NI suppliers making supplies directly to consumers in the State are liable to SFCT and must register with Revenue. I am advised by Revenue that of the 143 suppliers currently registered for SFCT, approximately 5 per cent are based in NI.

I am further advised by Revenue that it is conscious of cross-border price differentials and the risk of SFCT evasion, and over the last two years has carried out significantly increased numbers of SFCT compliance interventions, ranging from profile interviews, pay and file reminders etc., through to audits and investigations. To date in 2024, approximately 140 SFCT compliance interventions have been completed resulting in yield of over one million euro. In addition, Revenue has enforced SFCT debt, of over half a million euro, by sheriff/solicitor referral and by notice of attachment.

I am aware that concerns have previously been raised that cheap, smoky coal from NI, that does not comply with the State’s environmental standards, is being placed on the market here. While Revenue cannot impose any obstacles to the free movement of solid fuels from NI, the Air Pollution Act 1987 (Solid Fuels) Regulations 2022 give Local Authorities significant powers under this environmental law to enforce legal provisions aimed at preventing the marketing, distribution, sale and use of products which do not meet the standards that apply within the State. Notwithstanding that the regulation of solid fuel environmental standards is a matter for Local Authorities, I am advised by Revenue that it is keenly aware of the benefit that inter-agency co-operation can bring to the effective implementation of the range of State laws applicable to the solid fuel sector. In this regard, Revenue staff have participated in joint operations with Local Authorities on solid fuel matters and remains committed to supporting further positive collaboration with Local Authorities and other State agencies.