Solid Fuel Carbon Tax (SFCT)

Overview

Solid Fuel Carbon Tax (SFCT) applies to coal, peat briquettes, milled peat and other peat supplied in the State on or after 1 May 2013. There is no rate differentiation within solid fuel categories. This means that low smoke and smoky solid fuels are subject to the same SFCT rate. Wood and wood products that have no solid fuel component are not liable to SFCT.

The rate of tax that applies to solid fuel is proportionate to the amount of CO₂ emitted when the fuel is combusted.

Liability to SFCT arises at the time the fuel is first supplied in the State. The supplier is liable to account for and pay SFCT.

Where an individual personally purchases, and brings solid fuel into the State, they do not have a tax liability provided:

• the fuel is for their own private use
• and
• they accompany the fuel into the State.

If that individual, instead of using it for their own use, supplies another person in the State with that fuel they will:

• have made a first supply of solid fuel in the State as a supplier
• and
• be liable to pay SFCT on that supply and must register with Revenue accordingly.

Revenue administers, collects and enforces Solid Fuel Carbon Tax on first supplies of solid fuel in the State.

Environmental standards for solid fuels are regulated separately under legislation enforced by the Department of Climate, Energy and the Environment (DCEE), in conjunction with local authorities. These standards are set out in the Air Pollution Act 1987 (Solid Fuels) Regulations 2022 (S.I. No. 529 of 2022). The solid fuel regulations updated earlier legislation and came into effect October 31, 2022.

The updated regulations significantly strengthen the environmental regulatory framework for solid fuels. They place new obligations on importers, producers, baggers, distributors, wholesalers, and retailers. The regulations restrict the retail, online, and commercial sale of smoky fuels, including smoky coal, turf, and wet wood.

Local Authorities will continue to be responsible for the enforcement and breaches of the Air Pollution Act 1987 (Solid Fuels) Regulations 2022.

Further information is available on the DCEE Clean Air webpage.

Next: Taxable and tax-free solid fuel supplies