January 30 2026 2 min read

Carbon tax Ireland: How it can affect your business

Every business varies in the energy sources it uses, but it will have a cost impact through your business’s use of energy or transportation, which in turn can affect your profitability.

Introduced in December 2009, carbon tax in Ireland is a charge applied to fossil, carbon-emitting fuels such as kerosene, marked gas oil, liquid petroleum gas, fuel oil, natural gas, and solid fuels.

It is intended to reduce carbon dioxide emissions and forms vital part of Ireland's strategy to support a cleaner environment through renewable energy.

While every business uses energy differently, most will experience cost impacts linked to heating, electricity generation, fleet transport or logistics, which in turn can affect profitability.

Carbon tax rates in Ireland

Since October 8, 2025, the carbon tax in Ireland on petrol and diesel has been €71 per tonne of carbon dioxide emitted. For other fuels, the current carbon tax rate remains €63.50 per tonne and will increase to €71 per tonne from May 1, 2026.

Tips to save and offset the Carbon Tax

If you use gas central heating in your business, an easy way to save money is to shop around and compare business electricity and gas prices for the best-value supplier. In some instances, you can get substantial discounts of up to 40% to switch to a new supplier, so that alone is worth making the switch for.

Good insulation reduces heat loss in cold weather, and you can save by examining how long it is necessary to heat water during the working day. There are also several other ways to save on electricity costs for your business.

Move away from using fossil fuels as much as possible. They will continue to be taxed and so they are very much the energy source of the past. Instead, switch to renewable energy where possible.

Avoid Carbon Tax Increases and get Carbon Neutral credentials for your business. Carbon neutrality is achieved by calculating a carbon footprint and reducing it to zero through a combination of in-house efficiency measures and supporting external emission reduction projects.

Apply for 15 years’ Government funding for switching to renewable fuels with the SSRH Scheme.

SEAI Grants: The SSRH Scheme

The SSRH Scheme is a government initiative that provides financial support to convert to renewable heat for a 15-year period. The scheme will be administered by the Sustainable Energy Authority of Ireland (SEAI) and covers technologies in the non-domestic sector including heat pumps, solid biomass, including combined heat and power. For biomass it provides a continuous income stream for 15 years in a bid to ensure renewable heat is commercially attractive when compared to fossil fuels.

It is made up of two support mechanisms – an ongoing operational support for biomass boiler and anaerobic digestion heating systems and an installation grant for electric heat pumps.

FAQs: Carbon tax Ireland

What is the carbon tax?

Carbon tax is a government charge on fossil fuels designed to reduce carbon dioxide emissions by discouraging carbon-intensive energy use.

How much is the carbon tax in Ireland?

Since 8 October 2025, the carbon tax on petrol and diesel is €71 per tonne of CO2, while other fuels are taxed at €63.50 per tonne, rising to €71 per tonne from May 1, 2026.

What will a carbon tax do?

It incentivises lower emissions by encouraging businesses and households to reduce fossil fuel use and adopt cleaner energy sources.