Environmental Taxation and other Issues

Carbon Tax
 

• The Commission recommends the introduction of a tax on fossil fuels. The tax would be levied in the same matter as Excise Duty and the rate of tax would be linked to the market price for carbon credits traded under the EU Emissions Trading System. The report suggests an indicative tax rate of € 20 per tonne of CO2. The tax would apply to all fossil fuels including petrol, diesel, natural gas, heating oil, coal and peat.

• The report proposes that there would be no preferential rate of carbon tax for different sectors of the economy. It would also appear that existing exemptions from Excise Duty would not apply for carbon purposes. In addition, Vales Added Tax is applied to all duties included in the price of goods and services, so that the true cost of carbon tax will be increased by additional Value Added Tax.

• The report suggests that the carbon tax would translate into retail price increase of between 4.8% and 13.9% depending on the type of fossil fuel, with petrol at the lower end of the scale and coal attracting the highest % increase in price.

• The report suggests that carbon tax included in the price of the fuel should be visible to consumers at the retail stage, although the tax will be collected in the same way as Excise Duty. The Commission recommends that the introduction of the carbon tax should be phased and that a new tax on methane and nitrous oxide emissions should be considered once it becomes possible to monitor the level of such emissions.

Vehicle Taxes
 

• The Commission recommends that Vehicle Registration Tax (VRT) should be replaced over a 10 year period be increased fuel taxes and road pricing/congestion charges.

• The report also proposes a vehicle scrappage scheme targeted at encouraging a switch to the use of new electric and low emission vehicles.

Water Charges
 

• The commission proposes the introduction of water charges to ensure that the cost of providing water services is fully recovered by local authorities. The report proposes that the water charges be phased in over time beginning with a flat rate charge, gradually changing to volumetric billing once metres are put in place. The report also states that a waiver scheme is put in place for low income households and that water meters are installed in all new housing units.

Waste Disposal

• The report also includes recommendations in relation to the pricing of waste collection charges in line with polluter pays principal.

 

 

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