Agri-diesel and other agri-fuels used by farmers should be exempt from increases in the carbon tax, the IFA is set to propose.

In documents seen by the Irish Farmers Journal, the IFA has estimated that proposals in the programme for government to increase carbon tax from €26/t to €100/t will cost farmers €27.3m in 2021 alone.

The IFA will propose the exemption as part of its annual budget submission, expected to be launched on Wednesday 28 July. It will argue that increased costs will be particularly acute inside the farm gate, where there is no viable alternative to agri-diesel for farmers or agricultural contractors.

No alternative

As the carbon tax is meant to incentivise behavioural change and encourage a transition towards greener fuels and technologies, the IFA believes it is unfair to burden farmers with higher unavoidable costs.

In the submission that will be presented to the Government ahead of October’s budget, the IFA says: “The carbon tax undermines the competitiveness of the agricultural sector and the planned future increase will have a huge impact at farm level over the next 10 years.”

Rebates

The document does make reference to the current rebate system and acknowledges it will mitigate some of the cost. However, the IFA states the system’s use is limited as it is “cumbersome and it is not open to all farmers”.

It is understood the organisation has sought figures on the number of farmers availing of the rebate and the resulting savings.

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