Farmers and contractors will escape a tax hike on green diesel next month. The pending 2c/l carbon tax increase will be offset with an equal 2c/l reduction in excise duty, the Irish Farmers Journal can reveal.

The carbon tax currently stands at 9.08c/l for green diesel, formally known as Marked Gas Oil. This will rise by 2c/l to 11.08c from 1 May. However, the excise duty, currently levied at 4.74c/l, will reduce by the same amount, meaning the overall price of green diesel will be unaffercted by any change in taxes.

Farmers can claim back the 9.04c/l carbon tax through a rebate scheme. Agricultural contractors are denied this facility, and have been lobbying for some recognition for the effect diesel price hikes will have on the viability of their businesses.

Welcome

Minister of State at the Department of Agriculture Martin Heydon welcomed the move.

"We are entering a very important period on farms with the silage season fast approaching. Farmers and contractors are currently enduring a period of significantly increased input costs," he said.

"Government recognises this and has moved to fully offset the cost of additional carbon charges on green diesel from 1 May.”