Fuel, Energy and Carbon Tax Relief: Motion [Private Members]
Dail Éireann — 2026-09-23
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Niall Collins (FF), Limerick County

I move amendment No. 1:
To delete all words after "Dáil Éireann" and substitute the following:
"notes that the Government:
— remains deeply concerned about the ongoing conflict in the Middle East and Gulf;
— recognises and understands the pressures that have arisen due to rising fuel costs as a result of the conflict in the Middle East for all families and businesses, in particular for sectors most reliant on fossil fuels;
— highlights that successive Budgets have provided targeted support to help households with cost-of-living pressures and re-affirms that energy affordability is a priority for this Government; and
— remains committed to decarbonising our society, increasing investment in renewable energy sources and recycling carbon tax revenues to protect those most vulnerable to fuel poverty through targeted welfare interventions;
recognises that:
— this Government has delivered one of the largest support packages in the European Union (EU) per head capita which has included:
— excise duty reductions on diesel, petrol and 'green diesel';
— an enhanced Diesel Rebate Scheme for the entirety of 2026;
— the deferral of the 1st May Carbon Tax increase;
— the extension of the fuel allowance for one month;
— funds made available for payments to road transport operators under the Road Transporters Support Scheme;
— funds made available for payments to farmers, farm contractors and fishers under the Fuel Income Support Scheme; and
— a reduction in the National Oil Reserves Agency (NORA) Levy;
— it is not possible to offset all of the increases in energy prices, which are driven by market factors, using the tax system;
further recognises that, in the long run the best way to protect Ireland from the impact of international fossil fuel prices is to reduce our dependence on fossil fuel imports, which we will achieve through the progressive decarbonisation of the Irish economy and society and through the steps that will be taken to meet the Government's commitment to reach net zero greenhouse gas emissions by 2050;
further notes that:
— current support measures instigated by this Government are estimated to cost over €1.3 billion from March 2026 to the end of February 2027 and have provided significant relief for households and businesses across the country;
— the Government has responded and will continue to respond in a way that protects those most vulnerable to fuel poverty; and
highlights that, the Government remains cognisant of the pressures faced by households and businesses as a result of increased fuel prices owing to the conflict in the Middle East and will seek to address this as part of Budget 2027.".
As Deputies will be aware, we are living in an extraordinary uncertain period internationally. The consequences of this are being felt in every home and business right across the country. As a small, highly open economy and a net energy importer, Ireland is naturally exposed to movements in international energy prices. However, throughout the crisis we have monitored developments closely. We continue to examine the international situation and have always taken decisions which result in practical supports for households and businesses across the country.
The motion before the House does not fully take into consideration the array of supports which have been implemented by Government as a result of the conflict in the Middle East. This Government has delivered one of the largest support packages in the EU per capita , totalling over €1.3 billion and targeted at households, farmers, agricultural contractors, hauliers, tradespeople and businesses. Since the beginning of the crisis, this Government has acted to reduce excise duty on diesel, petrol and marked gas oil and to ease pressure at the pumps. We moved to defer the 1 May carbon tax increase on home heating fuels and we are we are now examining different options available in relation to the cost of home heating oil ahead of the budget. We enhanced the diesel rebate scheme for hauliers and passenger transport operators. We introduced bespoke schemes to support road transport operators, farmers, farm contractors and fishers. We also reduced the NORA levy. It is for this these reasons that the Government will not accept the Independent Technical Group’s motion.
I am happy to have the opportunity to discuss some of the key points made by the Deputies on fuel, energy and carbon tax relief. I am aware that people who live in rural communities like mine do not have the same public transport options as those living in urban communities, but to suggest that there is little or no public transport available across rural communities is simply not true. Government commitments under the national development plan and in the Connecting Ireland rural mobility plan will strengthen rural economies and communities. It means investments in new and existing public transport infrastructure and increasing connectivity, particularly for those who live outside of major towns and cities. The Deputies argue viable alternatives to private vehicles remain limited or non-existent. However, reliance on petrol- and diesel-powered vehicles is decreasing. One in four new vehicles purchased in Ireland in 2026 was an electric vehicle, EV. Industry data for 2026 shows uptake of EVs in rural counties is proportionally higher than in urban counties. The recent interest in the Government’s EV scrappage scheme is encouraging and highlights increasing consumer engagement with the transition to electric vehicles.
I assure the House that the Government understands the exceptional pressure rising fuel costs have placed on our farmers and farm contractors. We have worked intensively with representative stakeholder groups with a view to providing adequate and targeted supports. The announcement of the further extension of the fuel excise rate reduction until the end of October will have provided some reassurance and certainty to farm families and to businesses. It should be noted that existing legislation provides relief for expenditure relating to carbon tax on farm diesel incurred by any person carrying on the trade of farming. In effect, this keeps carbon tax on marked diesel fixed at a rate of just 4 cent per litre for the farming sector. That is the rate that applied in 2012.
As Deputies will be aware, the Minister for agriculture acted to implement a comprehensive €100 million fuel income support scheme to assist farmers, agricultural contractors and fishers facing unprecedented increases in fuel costs. The scheme provides €20 million per month in supports. Farmers and agricultural contractors benefit from a support rate equivalent to approximately 20 cent per litre of marked gas oil used based on the verified fuel consumption in 2025. This targeted and practical support package ensured those most exposed to these increases received meaningful assistance at a most crucial time of the year. On fertilisers, the European Commission announced at the end of July an exceptional aid package to compensate farmers impacted by increased fertiliser and energy costs due to the Middle East crisis. The EU package is worth €540 million in total with Ireland’s allocation being €15.4 million. It is crucial to note that the EU regulation which provides for this funding also makes provision for member states to provide for up to 200% in additional national funding. In Ireland’s case, this would be up to €30.8 million which would allow for up to €46.2 million to be disbursed to Irish farmers under this scheme. The regulation provides for support to be targeted at farmers most impacted by increased costs and disbursed to farmers no later than 28 February 2027. The Minister, Deputy Heydon, and I are actively working on behalf of Government are to finalise a scheme which will deliver this funding to the farmers most impacted by higher fertiliser costs and as quickly as possible. The consideration of additional national funding to top up the EU exceptional aid funding is being actively considered as part of the 2027 budget discussions.
It is important to note that the motion also fails to reflect the reality that the spikes in the price of home heating oil are not as a result of taxes or Government policy but, rather, the wholesale price of oil. The motion also fails to recognise the drivers of energy inflation are global in nature and that it is not possible for the State to control volatile energy prices. Our need for society and the economy to decouple from fossil fuel dependence has been even more apparent in recent times given the levels of volatility in the international fuel prices. The best way to achieve energy security and insulate our economy and society from fuel price shocks is to reduce our dependence on fossil fuels. The carbon tax is an important long-term policy tool in helping to achieve energy security.
The fuel excise applied to kerosene home heating oil is purely carbon tax. The non-carbon component of the mineral oil tax is not applied. Setting the carbon tax rate at zero would have consequential impacts for the most vulnerable to energy poverty. Carbon tax revenues are recycled and used to protect those most vulnerable to energy poverty. Successive budgets have provided additional funds for the just transition measures. This ensures that carbon tax is a progressive tax. Funding from carbon tax provides additional funds for targeted social protection payments, residential energy efficiency measures, as well as funding to encourage green farming practices. As of budget 2026, the Government had allocated over €4.2 billion in carbon tax revenue to fund the just transition and decarbonisation measures since 2020.
In examining changes to the carbon tax system, it is incumbent on us all to take into account our obligations under the EU emissions trading system legislation and the conditions of the derogation which this Government has negotiated with the European Commission. The principal condition of this is that our national carbon tax remains above the average auction clearing price of the emissions trading system for buildings, road transport and additional sectors, ETS, 2, thereby avoiding double taxation.
Heating fuels such as kerosene and natural gas are within the scope of the ETS2. Losing this derogation would result in carbon revenues being controlled at EU level, thereby undermining our national programme of home energy upgrades and retrofitting, the investment in our electricity grid and development of indigenous renewable energy on the scale required. This will take investment and time. The Government is committed to continuing to make these important investments in Ireland's future.
This motion comes less than two weeks ahead of budget 2027, in a period when we are examining the different options available in relation to the cost of home heating oil, rural impacts and agricultural supports, as raised in the motion. Looking at these issues in the round to ensure an impactful response for households and businesses across the country is the responsible way to act. While no government can fully shield all households from all the impacts of the crisis, this Government has acted time and again to mitigate those impacts. We will be taking further significant action in budget 2027, which is less than two weeks away.

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Record URI: https://data.oireachtas.ie/akn/ie/debateRecord/dail/2026-09-23/debate/main
Retrieved: 2026-09-28T05:50:49+00:00
Sitting date: 2026-09-23