Lowering prices for consumers on environmentally harmful fossil fuels through subsidies cost the exchequer €2.4bn in 2018, or 71% more than at the turn of the millennium.
Central Statistics Office (CSO) analysts calculated direct fossil fuel subsidies, such as the household fuel allowance, and indirect subsidies to estimate the total cost of fossil fuel subsidies from 2000 to 2018.
Total fossil fuel subsidies were €2.4bn in 2018 which was 8% higher than 2017 and 71% higher than 2000 when the series began in 2000, the CSO said.
Using the excise duty rate on petrol as a benchmark, the CSO said potential revenue written off on diesel for vehicles was €390m in 2018. Vat refunds on diesel for business use was €285m in 2018, it added.
Jet kerosene, which is used for commercial flights, is exempt from excise and carbon taxes, the CSO said, which resulted in an average effective carbon rate of less than €1 per tonne of carbon dioxide emitted.
Petrol, mainly consumed by everyday motorists, had the highest average effective carbon rate in 2018 at €258 per tonne of carbon dioxide emitted.
The average effective carbon rate on diesel was €184 per tonne of carbon dioxide due to the lower excise duty rate than petrol, the CSO calculated.
The average effective carbon rate of a fuel is defined as the net energy tax receipts, divided by total tonnes of carbon dioxide emitted through combustion.
The energy taxes included in the analysis are: excise duty; carbon tax; electricity tax; the National Oil Reserves Agency levy; the public service obligation levy; and emission permit purchases under the EU emissions trading scheme.
Statistician in the environment and climate division of the CSO, Clare O’Hara, said: "The average effective carbon rate for marked gas oil, sometimes referred to as ‘green diesel’, used in agriculture, forestry and fishing was €39 per tonne of carbon dioxide.
"Some fossil fuel subsidies provide important social supports. The household electricity allowance was €103m and the household fuel allowance was €96m in 2018."
Increasing the effective carbon price of diesel would probably have a greater impact on rural households than urban households because of longer commutes, the body said.
Petrol had the highest average effective carbon rate each year from 2000 to 2018. Its consumption is subject to the highest rate of excise duty, and is also subject to carbon tax and the
National Oil Reserves Agency levy.
Fuel for international maritime transport and aviation is exempt from excise duty, carbon tax and the National Oil Reserves Agency levy. In 2018, energy taxes were paid on less than 1% of sea and aviation fuel, but were paid on 100% of petrol.
