Fuel charge puts the heat on homeowners
HOMEOWNERS will see the cost of heating their homes and running their cars rise by over €150 under a new carbon tax set for introduction in the December Budget.
Already postponed twice, the carbon tax is likely to feature in this year's Budget and would hike the price of home-heating oil by almost €54, the annual gas bill by over €40 and car fuel bills by at least €70 every year.
Finance Minister Brian Lenihan has already signalled that he will bow to the Green Party's wishes and introduce the tax in December.
A litre of petrol and diesel would become 4.7c and 5.4c more expensive respectively, while a bale of peat briquettes would rise by 48c and a tonne of coal would increase by over €56 under the "polluter pays" principle.
The environmental tax will apply to all fossil fuels, including petrol, diesel, home-heating oil, gas, coal and peat briquettes.
Under the raft of tax proposals published yesterday, the Commission on Taxation opted for a charge of €20 per tonne on the carbon dioxide emissions from peat, coal, oil, auto fuel, liquified petroleum gas and natural gas.
The new tax, charged when the fuel comes into the market as opposed to when it is sold to consumers, would boost the Government's strained coffers by €480m next year, rising to €500m in 2012.
The commission has recommended that the tax be collected at the earliest practical point of supply and linked into the existing mineral oils tax system so it is not seen as "just another tax".
As different fossil fuels produce different amounts of carbon dioxide, a system called the "tonne of oil equivalent" is used to predict the amount of emissions that are expected to be produced when the fuel is used.
Cattle
Under the carbon tax system of charging €20 per tonne, the fuels generating the greatest amount of carbon are taxed proportionately more than cleaner fuels.
If the tax works as intended, consumers will make the switch to alternative energy products which have lower carbon emissions.
But while the agriculture sector is highlighted as being the Ireland's biggest emitter of greenhouse gases, the commission said it could not put a green tax on cattle.
"If methane and nitrous oxide emissions from agriculture become capable of being monitored, reported and verified with sufficient accuracy, their exclusion from the carbon tax should be reconsidered," the commission's report said.
Last night, Conor Faughnan of AA claimed the proposed new tax had nothing to do with carbon or the environment and everything to do with raising more revenue.
An equally sceptical Seamus Boland of Irish Rural Link (IRL) claimed the carbon tax must be "rural-proofed" because there is often no alternative to the car at a time when there are threats to the public transport service in rural areas.
- ine Kerr
