What is carbon tax?

The carbon tax is a government tax introduced in the 2010 Budget, applicable to all CO2 emission sources. The carbon tax is applied to all natural gas customers since 1 May 2010. 

From 1 May 2024, the tax for natural gas was derived from the rate of €56 per tonne of carbon dioxide (CO2) emitted and is applied to gas bills at a rate of €0.01013/kWh. This is subject to VAT. 

For the average residential gas customer based on usage of 11,000 kWh per annum (as per CRU guidelines), the carbon tax equates to €111.43 annually (excl. VAT), or €18.57 (excl. VAT) per bi-monthly bill. You’ll be able to see the carbon tax in the bill breakdown. 

Further details about the carbon tax can be found at revenue.ie which includes information on the carbon tax methodology, figures and calculations. 

The following exemptions apply to carbon tax: 

Fully exempt 

Any natural gas which is consumed for the purpose of: 

• Electricity generation (this does not include CHP generation) 
• Chemical reduction 
• Electrolytic or metallurgical processes 

Partially exempt 

Partial tax relief, where carbon tax will be charged at a rate of €0.00054/kWh, will apply where gas is used:

• In an installation that is covered by a greenhouse gas emissions permit issued by the Environmental Protection Agency (EPA); and 
• For environmentally friendly heat and power co-generation, other than micro co-generation. This relief applies where it is determined that the co-generation meets the requirements for high-efficiency co-generation by a competent authority as designated by the Minister for Finance.