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Carbon Tax Ireland: how it can affect your business
Carbon Tax Ireland: how it can affect your business

Carbon Tax was introduced in Ireland on May 1st 2021 and it is a charge applied to fossil, carbon-emitting fuels like kerosene, marked gas oil, liquid petroleum gas, fuel oil, natural gas, and solid fuels.

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

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.

What are the costs of Carbon Tax?

Cost-wise, the tax works out at around 0.69 cent (including VAT) for every kWh of natural gas and about €84 in total on a 900-litre tank of heating oil. The tax, first introduced in 2010, already adds around 8.5 cent to every litre of petrol and diesel.

In the United States, studies show that the transportation sector accounts for around 36% of all CO2 emissions, while businesses’ activity accounts for only 5%.* That means if you run vans or a car fleet, it is well worthwhile looking at hybrid or electric models when you renew your lease.*Source: Ernst & Young

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

Further reading:

There are many websites with hints and tips on Carbon Tax efficiencies that you can put in place. The most detailed and definitive information on the Revenue’s website Carbon Tax page.