Regulatory policy

The minister will “fight tooth and nail” to maintain a green tax policy on diesel

Agriculture, Food and Marine Minister Charlie McConalogue said he would “fight tooth and nail” to maintain the current green diesel tax policy.

Talk to Agriland during the government-led trade mission to Asia, the minister said it was “absolutely essential”, especially in light of the rising costs facing farmers.

The issue has been in the spotlight in recent weeks following two separate recommendations to the government.

The Tax and Welfare Commission has recommended Finance Minister Paschal Donohoe remove excise duty concessions on all fuels, including green diesel.

The commission has been commissioned by the government to carry out a year-long review of how the tax and social security system can support economic activity and promote job creation.

Commenting on the recommendation, Minister McConalogue said “things have changed significantly” and the government will need to focus on the costs facing farmers and families.

In its pre-budget presentation, the Tax Strategy Group (TSG) recommended that the government signal a policy change to farmers this year, but added that such a change would have to be postponed to a later date due to the current situation.

“For reasons of fairness, the case for retaining Section 664A for farmers is not strong,” he said.

Introduced by the government in 2012, section 664A aims to protect farmers from any increase in the carbon tax beyond the tax rate that applied in 2012 (€41.30/1,000L).

The minister said he had already discussed the matter several times with officials from the Department of Finance.

“Obviously there are issues across the economy, but I am certainly aware of the costs that fall on farmers, the costs that fall on entrepreneurs and I will certainly have that discussion as well with Minister Donohoe before the budget,” he said.

McConalogue said he was looking at all possible options for reducing costs for farmers – however, he did not elaborate on what that might entail.

Meanwhile, the minister said the government could not guarantee the country would avoid blackouts later this year.

He added that work is ongoing between the government, the Utilities Regulatory Commission (CRU), EirGrid and industry stakeholders on the matter.

“The government’s top priority is to ensure that we maintain the energy supply over the coming winter and spring. Obviously there are challenges all over Europe, challenges that we didn’t have before.

Last month, EirGrid issued two amber alerts, indicating a narrow gap between electricity supply and demand.