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01st May 2024

Here’s how today’s carbon tax increase will affect over 600,000 gas customers in Ireland

Sophie Collins

carbon tax

The carbon tax change is in place from today (Wednesday, May 1st)

As of today, May 1st, households across Ireland are bracing themselves for a hike in the carbon tax, impacting various aspects of daily life. 

The carbon tax, initially introduced in 2010, is a levy imposed on carbon-emitting fuels like coal, peat, oil, and natural gas. 

Its primary aim is to curb carbon dioxide emissions, aligning with Ireland’s broader environmental agenda aimed at fostering a greener and cleaner future.

Last October, the government announced a €7.50 increase in the carbon tax, raising it to €56 per tonne of CO2. 

However, the implementation of this hike was deferred until May, particularly affecting home heating fuels such as coal, peat, natural gas, and heating oil.

For consumers, this translates to a nominal increase of just over 1 cent (including VAT) for every kilowatt hour (kWh) of gas consumed. 

With the average Irish household utilizing approximately 11,000 kWh of gas annually, this adjustment will tack on an additional €17 to the average yearly natural gas bill.

This will bring the total carbon tax payment for the average gas customer to around €122 annually. 

However, households with larger dwellings or poorer Building Energy Ratings (BER) are likely to bear a more substantial burden.

The carbon tax hike will also inflate the cost of filling a 900-litre home heating oil tank by approximately €19, bringing the total carbon tax expense for this fuel to around €140 per tank.

Carbon tax

The trajectory of the carbon tax indicates a near doubling by 2030, aiming to further incentivise cleaner energy practices. 

At the moment, the tax already contributes around 15 cents to every litre of petrol and diesel, affecting transportation costs.

Darragh Cassidy, Head of Communications at, weighed in on the impact of the tax hike, and said it will have a potential strain on households, especially those with lower incomes. 

“With energy prices still at extremely high levels, it’s fair to say this tax increase won’t be welcomed by many. There is also concern that it disproportionately affects those on lower incomes.

“Nevertheless it’s here to stay and an increase to €100 has been legislated for already.”

He emphasised the importance of exploring avenues to mitigate these effects, such as switching energy suppliers to avail discounts or investing in home retrofitting for enhanced energy efficiency. 

“In terms of offsetting the tax, the easiest thing for gas customers to do is to switch supplier. Customers who switch can get discounts of up to 20% or more from their new supplier for an entire year, which would more than negate the increase. 

Despite the initial investment required for retrofitting, Cassidy said there is availability of grants from the Sustainable Energy Authority of Ireland (SEAI) and low-cost green loans from financial institutions, facilitating sustainable home upgrades.

“Retrofitting isn’t cheap of course. However the SEAI has a range of grant options available while many lenders now provide low-cost green loans for those who are making energy-efficient upgrades to their home.” 

As the carbon tax incrementally rises, consumers are urged to explore strategies for minimising its financial impact while contributing to Ireland’s broader sustainability goals.