The incoming carbon tax increase on green diesel will be higher and more costly than most contractors and farmers realise, contractors have warned.

“The Minister for Finance announced that the tax would increase by €6 per tonne from 1 May in his Budget,” the Association of Farm and Forestry Contractors in Ireland (FCI) chair Richard White said.

“However, when this is converted from euros per tonne of carbon to buying price of green diesel, it works out at €15.50 per 1,000l or 1.5c/l, with VAT to be added. These are the figures supplied to us by Revenue.

“For a typical contractor using 150,000l per year, this will raise his fuel bill by €2,325. “Neither contractors nor their farmer customers can easily afford this.”

White further warned the stated Government plan to eventually raise carbon tax to €80/t by 2030 would damage contracting and farming.

“It would further increase green diesel price by €130 per 1,000l or €13c/l. That would add €19,500 to a contractor’s annual fuel bill. Neither contractors nor their farmer clients have profit margins that could support this.”