Solid Fuel Carbon Tax (SFCT)

Reliefs

Biomass products

Since 1 November 2016 a partial relief from SFCT applies to biomass products which are defined as “any solid fuel product with a biomass content of 30 per cent or more”.

The amount of relief that may apply to a biomass product depends on the proportion of that product that is biomass, see the table below.

Regulations issued by the Minister for Communications, Climate Action and Environment, S.I. No. 326 of 2012 as amended, set out the requirements for the identification and marking of biomass products.

The partial relief applies to first supplies of solid fuel where the fuel concerned has met the statutory requirements for biomass products in the biomass regulations. These regulations impose specific obligations on biomass product manufacturers and other persons making supplies of biomass products.

The effective SFCT charge per tonne that will be payable on biomass products after application of the relief are as follows:

Solid Fuel Carbon Tax charge per tonne

Product

Biomass Content

Relief (percentage by which tax chargeable may be reduced where a relief is applicable)

'Effective net charge per tonne', that is, Tax rate per tonne reduced by the relief percentage applicable

Coal

None

No reduction; full rate applies

€52.67

< 30%

No relief – not a biomass product

€52.67

≥30 < 50%

30% of tax chargeable

€36.869

≥ 50%

50% of tax chargeable

€26.335

Peat Briquettes

None

No reduction; full rate applies

€36.67

< 30%

No relief – not a biomass product

€36.67

≥30 < 50%

30% of tax chargeable

€25.669

≥ 50%

50% of tax chargeable

€18.335

The SFCT return and declaration form SFCT1 Return Declaration facilitates suppliers to:

  • declare the quantities of biomass products first supplied by them and to use
  • calculate the effective net SFCT charge and pay their total SFCT due for the period.

Reliefs to be applied at source

The following reliefs may be applied at source by the supplier making a first supply, provided certain Revenue requirements are met:

  • A full relief from the tax is applicable to solid fuel supplied for use solely in the generation of electricity excluding combined heat and power cogeneration (CHP).
  • A full relief is applicable also to peat delivered for use in an installation that is covered by a greenhouse gas emissions (GHG) permit issued by the Environmental Protection Agency.
  • A partial relief applies for coal delivered for use in an installation covered by a GHG permit. The coal concerned is taxed at the minimum permitted by the European Union (EU) Energy Tax Directive - €4.18 per tonne.

In all cases, the relief may be applied at source by the supplier making the first supply, provided that the consumer gives the supplier, in advance of such supply, a properly completed declaration on the use of the solid fuel and the supplier and consumer retain a copy of the completed declaration for production to Revenue as required.

If the supplier does not receive the declaration in sufficient time before a supply is made, the relief may not be applied at source. Instead, the supplier must account for the tax and the consumer must claim the relief subsequently from Revenue. The consumer must maintain adequate records to support such claims.

Where, as a result of false or misleading information having been given by a consumer to a supplier, a deficiency in the amount of tax paid arises, it is the consumer, and not the supplier, that is liable for the deficiency.

Reliefs by repayment

Full relief from the tax by means of repayment to the consumer is provided for in respect of solid fuel which is shown to have been delivered to that consumer for use by them:

  • in chemical reduction
  • in electrolytic or metallurgical processes
  • under diplomatic arrangements in the State.

Peat

Full relief from the tax by means of repayment to the consumer is provided also for peat delivered to them for use in environmentally friendly heat and power cogeneration (other than micro-cogeneration).

Coal

In the case of claims for 2016 and earlier partial relief from the tax is available to consumers for coal delivered to them for environmentally friendly heat and power cogeneration, the effect of which will be a net rate charged of €4.18 per tonne. The relief for heat and power cogeneration is subject to the condition that the CHP unit to which the solid fuel is being supplied is certified by the Commission for Regulation of Utilities (CRU) as meeting the high-efficiency criteria laid down in EU regulations.

A provision was included in the Finance Act 2016, with effect from 1 January 2017,  to change the relief from SFCT for coal used in environmentally friendly HE CHP from a partial relief to a full relief. Full details of the relief from SFCT for coal used for High-Efficiency, Combined Heat and Power cogeneration that applies after 1 January 2017 are given in the High efficiency combined heat and power cogeneration section.  

All repayment claims must be submitted to Revenue by the claimant, together with the appropriate supporting documentation, within six months of the end of the period to which the claim relates.

It should be noted that, in the case of solid fuel subject to relief by repayment, the person who makes the first supply of the solid fuel in question is liable to pay SFCT on that supply.

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