Tuesday, 18 June 2019

Questions (124)

Jim O'Callaghan


124. Deputy Jim O'Callaghan asked the Minister for Finance the extent to which the State subsidises diesel cars and fuel; his views on the health impact of diesel fumes; and if he will make a statement on the matter. [24987/19]

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Written answers (Question to Finance)

Air quality is an issue of increasing social concern with a number of pollutants being linked to a range of medical conditions including strokes, cancer, lung and cardiovascular diseases. Ireland generally has better overall air quality than most countries in Europe. Nevertheless, in larger towns and cities, where prevailing winds are disrupted and harmful pollutants cannot disperse due to high density developments, the negative implications for local ambient air quality and for public health and well-being are exacerbated.

The transition of our national fleet to alternative fuels is an important step-change to effect a substantial reduction in transport emissions. Fossil-fuelled road transport, including diesel, is a major source of air pollution emissions, particularly nitrogen oxides (NOx) and PM2.5, from both exhaust release and tyre & brake wear. Road transport is the principal source of NOx emissions in Ireland accounting for approximately 41% of the total NOx emissions in 2016.

The All of Government Plan on Climate Action Plan sets out a number of strategies to decarbonise the economy, including a series of ambitious targets relating to the transport sector such as large scale electrification of the national fleet by 2030.

The forthcoming National Clean Air Strategy will provide the policy framework necessary to promote integrated measures across Government to reduce air pollution and promote cleaner air.

I am advised by Revenue that estimates for the revenue foregone arising across a number of tax areas and schemes is provided in the following tables.

Table 1: Revenue foregone arising from reduced mineral oil tax rates

Tax Type

Product Type

Nominal Revenue foregone (exc. VAT)

Excise Duty

Marked Gas Oil

€409 million

Excise Duty

Auto Diesel

€390 million

Data relates to 2018 unless otherwise stated, and calculations are based on the excise rate when compared to that applied to petrol.

Table 2: Revenue foregone arising from Schemes/legislation

Scheme Name

Product Type

Nominal Revenue foregone

Fuel Grant Scheme

Auto Diesel

€7.5 million

Diesel Rebate Scheme (price dependent)

Auto Diesel

€2.4 million (2018) €21 million (2014)

Disabled Drivers and Disabled Passengers Scheme

Diesel cars (VRT/VAT)

€43 million (approximate)

In addition to the above businesses are entitled to reclaim VAT on a wide range of business expenses including diesel fuel expenditure. This may be considered as a subsidy to the extent that the general population cannot avail of this VAT reclaim. However, due to the pro business approach to the administration of VAT and the relatively low level information gathered from businesses, a breakdown of VAT reclaim data is not available, although the VAT reclaim on diesel is likely to be substantial.