The yield from carbon tax for 2011 was €329.2 million (VAT inclusive). The estimated yield for 2012 is €410 million (VAT inclusive). The VAT figures are estimates based on the expected carbon tax receipts in each category. The VAT receipts are estimated as VAT returns do not require the yield from a particular sector or sub-sector of trade to be identified and the actual VAT yield for each category cannot therefore be determined. The uses of mineral oil that are entitled to a full or a partial relief from Mineral Oil Tax (MOT) are specified in the Finance Act 1999, as amended.
Full relief from MOT, including its carbon charge component, is granted for a range of uses including electricity production and use in chemical reduction or in electrolytic or metallurgical processes. It applies also to oil used for sea navigation and to heavy oil used for air navigation, but does not extend to oil used for private pleasure navigation or private pleasure flying.
A relief from the carbon charge component of MOT applies to biofuel, including biofuel which forms part of a mix or blend with other oil. Carbon charge relief applies also in the case of mineral oil used in an installation covered by a greenhouse gas emissions permit, or for environmentally friendly heat and power cogeneration (other than micro-cogeneration) that meets the requirements for high-efficiency cogeneration set down in Directive 2004/8/EC.
Partial relief from MOT applies to aviation gasoline used for air navigation, other than private pleasure flying, and to heavy fuel oil and gas oil used in the production of horticultural products and mushrooms.
In addition, section 20 of the Finance Act 2012 has made provision for a deduction in respect of the carbon charge component of the MOT on marked diesel used by farmers in the course of their farming trade. Under this measure, farmers are allowed a deduction in computing their farming profits or losses for the amount of additional carbon charge that they incur on purchases of marked diesel, following the increase in the rate of tax on certain fuels from 1 May 2012. This new deduction is in addition to the existing deduction for MOT included in the cost of marked diesel used in the course of the farming trade.
Chapter 2 of Part 3 of the Finance Act 2010, which introduced Natural Gas Carbon Tax, provides for a number of reliefs from that tax. A full relief from the tax applies to gas supplied for use in the generation of electricity, or in chemical reduction or in electrolytic or metallurgical processes. Partial relief applies in the cases of gas supplied for use in installations covered by greenhouse gas emissions permits, or for environmentally friendly heat and power cogeneration.
On the question of earmarking revenue for specific schemes, as a matter of principle the Department of Finance is opposed to the hypothecation of revenue and sees no merit in having revenues predestined for specific areas. It is therefore the general practice not to ring-fence revenues for specific purposes but rather take an overall view on priorities in the context of expenditure decisions which, of course, are dependent on Exchequer revenues.
