Written answers
Thursday, 12 June 2025
Department of Finance
Tax Data
Pa Daly (Kerry, Sinn Fein)
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293. To ask the Minister for Finance the cost to reverse the carbon tax increase for petrol and diesel, in each of the years 2020 to 2025, as well as the planned increase in 2026, in tabular form. [31585/25]
Pa Daly (Kerry, Sinn Fein)
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294. To ask the Minister for Finance to provide a breakdown of the revenue earned from the carbon tax diesel, in each of the years 2020 to 2025, in tabular form. [31586/25]
Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 293 and 294 together.
In relation to the Deputy's first question on what the cost would be to reverse the carbon tax increase for petrol and diesel in each of the years from 2020 to 2025, as well as the planned increase in 2026: I am advised by Revenue that the estimated full year revenues forgone in 2026 from not proceeding with the planned increase in the Carbon Tax for petrol and diesel under Budget 2026 and of reversing the Carbon Tax budget increases for petrol and diesel introduced in each of the previous five years are set out in the following table. These estimates are based on the latest Revenue volumes data and do not account for any behavioural change in 2026.
Action | Proposal | Carbon Tax €m | VAT €m | Total €m |
---|---|---|---|---|
Suspend 2025 | Remain at €63.50 per tonne of CO2 emitted | 79 | 8 | 87 |
+ Reverse 2024 | Revert to €56 per tonne of CO2 emitted | 159 | 17 | 176 |
+ Reverse 2023 | Revert to €48.50 per tonne of CO2 emitted | 238 | 25 | 263 |
+ Reverse 2022 | Revert to €41.00 per tonne of CO2 emitted | 318 | 34 | 352 |
+ Reverse 2021 | Revert to €33.50 per tonne of CO2 emitted | 397 | 42 | 439 |
+ Reverse 2020 | Revert to €26 per tonne of CO2 emitted | 476 | 50 | 526 |
The provisional year-to-date May 2025 carbon tax receipts for diesel are €216m.
I am further advised by Revenue that traders are not required to identify the VAT yield generated from the supply of specific goods and services on their VAT returns. Therefore, it is not possible to provide the VAT yield from diesel using taxpayer information alone. However, using Revenue and third-party data sources, a tentative estimate of the VAT generated on the carbon tax applied on diesel over each of the past six years is provided in the table below.
Year | Estimated VAT €m |
---|---|
2020 | 16 |
2021 | 22 |
2022 | 29 |
2023 | 34 |
2024 | 37 |
2025* | 16 |
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