Any move by the Government to erode the excise duty differential between green diesel and auto diesel could cost the industry up to €170m, farm contractors have warned.

The differential between the two diesels is currently around 50c/l. However, the lower excise duty rate for green diesel was recently labelled a “fossil fuel subsidy” by both the Government’s Tax Strategy Group and the CSO, sparking fears that it could be in the budget crosshairs.

Cost

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The Farm and Forestry Contractors in Ireland (FCI) pointed out that its members use almost 340m litres of diesel each year and that the removal of the differential could potentially cost the sector €170m.

The FCI called on the Department of Finance and the Tax Strategy Group to carry out a financial and technical assessment of the actual costs to Irish farming’s competitiveness of removing the differential.

FCI national chair John Hughes said that any erosion of the lower excise duty rate for green diesel would have serious implications for both contractors and farmers.