‘Unfair’ jet fuel exempt from carbon tax while households suffer, expert says

It was unfair that a Midlands family using jet fuel to heat their home was subject to the tax, but the carbon tax does not apply to jet fuel used to fuel planes, energy specialist Paul Deane said. from University College Cork (UCC).

Dr Deane’s comments came days after households learned this month’s carbon tax increases would mean they would have to pay more for oil, coal and gas to heat their homes.

The increase in the carbon tax on May 1 will add 17 euros to the annual cost of an average bill for the 600,000 households that use natural gas. The average gas consumer will now pay a total of around €122 per year in carbon tax.

The increase in the carbon tax will add around 19 euros to filling a 900 liter domestic fuel tank.

This means filling a 900 liter tank will now cost households around €140 in carbon tax in total, according to calculations by price comparison site Bonkers.ie.

The carbon tax on coal and briquettes also increased this month.

Carbon tax increases on petrol and diesel were imposed just after the October budget.

The tax adds €1.04 to the price of 60 liters of petrol and €1.20 to 60 liters of diesel, according to calculations by the Dáil Parliamentary Budget Office.

But heavy aviation fuel is exempt from carbon tax and excise duties.

The Central Statistics Office (CSO) calculated that the excise duty exemption alone amounted to €273 million in 2021, at a time of severe travel restrictions due to Covid.

In 2019, before the pandemic, the CSO said revenue forgone to the state amounted to €634 million.

Dr Deane said it was “really unfair” for households and motorists to be hit with the carbon tax while airline fuel was exempt.

“This is a testament to the power of the well-organized aviation industry lobby, not only in Europe, but around the world,” he said.

“Over the past decade, the aviation industry has vehemently resisted carbon taxes, under pressure in particular from India, China and the United States. »

Last week it emerged that jet fuel sales in this country hit record levels last year, reversing some progress made in weaning the country off fossil fuels.

Overall greenhouse gas emissions from oil, gas and other fossil fuels were at their lowest level in Ireland for 30 years.

But they have not yet declined fast enough to meet climate goals.

Emissions efforts have been thwarted in part by an increase in the number of Irish taking to the skies.

Dr Deane said kerosene used by aircraft was similar to kerosene used in domestic oil heating systems.

“We use kerosene to heat our homes. If a family in Mullingar installs their oil heating, they pay excise duty and a carbon tax on that amount,” he said.

“A similar fuel is used on a Ryanair flight, but there is no excise duty or carbon tax on this product.”

There is, however, a small tax on light oil used for commercial air navigation.

A spokesperson for the Ministry of Finance confirmed that there is no mineral oil tax on aircraft kerosene. Indeed, it is exempt from tax in accordance with the European Union’s energy tax directive.

She said this was the case for all EU member states.

In July 2021, the European Commission published a proposal to revise the Energy Taxation Directive. Taxation of intra-Community flights is part of this proposal.

“Ireland has actively participated in the negotiations on this proposal, which are ongoing,” the ministry said.