When Does the Carbon Tax Come Out? Ireland 2026 Rates

Ireland’s government pressed pause on a planned carbon tax increase scheduled for May 1, 2026, delaying the levy hike to the April 2026 Budget. The decision sent ripples through supplier planning and household budgets alike. Here’s what that means in practice: the current rates, why the deferral happened, and what to watch for in the autumn.

Current petrol/diesel rate: €71 per tonne CO2 (from 8 Oct 2025) · Planned May 2026 increase: Deferred to Budget Oct 2026 · Other fuels rate: €63.50 per tonne CO2 · Target by 2030: €100 per tonne CO2 · Introduction year: 2010

The table below consolidates the key figures driving Ireland’s carbon tax debate heading into the autumn.

What is the carbon tax in Ireland 2026?

Ireland’s carbon tax is a levy charged per tonne of CO2 emitted when fuel is burned. It applies to petrol, diesel, kerosene (home heating oil), marked gas oil (green diesel), natural gas, and solid fuels like coal and peat. The government sets the rate each year and adjusts it upward as part of its climate action plan.

Current rates for petrol and diesel

As of 8 October 2025, the carbon tax rate for petrol and diesel sits at €71.00 per tonne of CO2 emissions, according to Revenue Ireland’s official Budget documentation. For the average driver, this translates to a motor tax (MOT) rate of €706.14 per 1,000 litres for petrol, and €615.76 per 1,000 litres for auto-diesel. Those figures are locked in — no further change applies to them until the next Budget decision.

Planned increases and deferrals

The government announced the current €71.00 rate in Budget 2026 (October 2025), but had previously earmarked a further increase for 1 May 2026. That hike has now been deferred. On 14 April 2026, the government announced a new package of fuel supports alongside the deferral, pushing the next rate decision to the October 2026 Budget. Moving the date costs the exchequer approximately €22 million in expected revenue, according to Breaking News Ireland.

How much is carbon tax going up in May?

Technically, the carbon tax increase that was scheduled for 1 April 2026 is no longer going ahead on that date. The government deferred it alongside a broader package of fuel supports announced on 14 April 2026.

Deferral details from Budget

The Irish government deferred the planned carbon tax increase from May 1, 2026 until the Budget date, according to an official press release from the Department of the Taoiseach. The deferral was framed as a response to ongoing energy cost pressures. Tánaiste Simon Harris went further, stating the government would not “rule out any taxation measure” when pressed on whether another postponement might follow, Gript reported.

Impact on suppliers and fuels

The deferral affects a wide range of fuels. Any delivery of home heating oil on or after 1 May 2026 was supposed to carry the new higher carbon tax rate — that requirement is now suspended pending the October 2026 decision. Natural gas carbon tax was set to increase to €12.84 per megawatt hour from May 1, 2026, according to Revenue Ireland’s Budget 2026 Summary, though implementation is under review. Solid fuel taxes on coal (€187.00 per tonne) and peat briquettes (€130.18 per tonne) were also due to rise on that date, though their implementation is under review.

What is the current rate of carbon tax?

The rate most people ask about — petrol and diesel — is €71.00 per tonne CO2. That is the figure that applies from 8 October 2025 and remains in effect until the next Budget decision, expected in October 2026.

Rates by fuel type

The breakdown below shows how carbon tax applies across different fuel categories, with links to official Revenue Ireland documentation.

The implication: most of the May 2026 increases were set out in official documentation, but the April deferral means petrol, diesel, and home heating oil increases are now paused. Natural gas and solid fuel increases remain under review.

Changes since October 2025

October 2025 was a significant date for Irish fuel pricing. The carbon tax rate on petrol and diesel rose from the previous level to €71.00 per tonne, as announced in Budget 2026. The government simultaneously deferred the next scheduled increase for home heating fuels from October 2025 to May 2026 — and has now deferred that May 2026 date again. The overall trajectory, outlined in government climate policy, aims to reach €100 per tonne by 2030.

When was carbon tax introduced in Ireland?

Ireland introduced carbon tax in 2010, making it one of the earlier adopters in the EU. The initial focus was on transport fuels, with other sectors added over time.

History and annual increases

The levy started small, but each year the government has increased the rate as part of Budget announcements. Over 15 years, the per-tonne cost has risen from a handful of euros to €71.00 — a more than tenfold increase. The pace of rises has been accelerating, with the government committing to regular annual increments as part of its national climate action framework.

Path to €100/tonne by 2030

The current target is €100 per tonne CO2 by 2030. Given the €71.00 rate in place as of October 2025, reaching that target would require roughly €5–6 in annual increases over the remaining years. The May 2026 deferral is a setback to that path — each postponement widens the gap the government must make up later or accept a slower climb to the target.

How does carbon tax affect the environment?

The core idea is straightforward: make carbon-intensive fuels more expensive, and people and businesses will burn less of them. The tax applies per tonne of CO2 emitted, so the more carbon a fuel produces when burned, the higher the levy per unit of energy.

CO2 emissions reduction goals

Ireland’s carbon tax is designed to help meet national emissions reduction targets under the Climate Action Act. Every euro added to the per-tonne rate nudges the price of petrol, diesel, heating oil, and solid fuels upward — giving households and businesses a financial incentive to switch to lower-carbon alternatives or simply use less energy.

Fuel-specific impacts

Petrol and diesel bear the highest per-tonne rate (€71.00) because road transport is a major source of Irish emissions. Home heating fuels like kerosene are taxed slightly lower (€63.50), though that gap narrows if the May 2026 increase had gone ahead. Solid fuels face steeper rates, partly reflecting their high carbon intensity and the health harms from particulate pollution.

Timeline of Ireland’s carbon tax 2026

Four milestones define the 2026 story so far — a Budget announcement, an implementation date, an unexpected reversal, and an open question mark hanging over the autumn.

The pattern: each deferral pushes the €100/tonne target further out of reach unless future Budgets compensate with steeper increases.

Clarity on what’s confirmed and what remains unclear

With this topic, the line between established fact and open question matters — especially if you’re a household budgeting for heating costs or a business planning fuel procurement.

What this means: households should treat the current €71.00 rate as stable through summer 2026 at minimum, but budget for possible changes after the October Budget.

What people are saying

The carbon tax increase will be under further consideration in Budget.

— Citizens Information

Our next scheduled increase was set for May 1st, 2026 — but the government has pushed that back.

— Lambe Oil

Carbon tax on petrol and diesel has been at €71 per tonne since October 2025. The May increase has now been deferred.

— Energia

Bottom line

Ireland’s carbon tax rate on petrol and diesel is €71.00 per tonne CO2 — locked in since 8 October 2025 and staying there until the October 2026 Budget makes its move. The May 2026 increase that had been in the diary has been deferred, alongside temporary fuel excise cuts that run through July. For households, the immediate takeaway is practical: if you’re due for a home heating oil delivery before August, the window of lower excise adds to the savings from the deferral. For those watching climate policy, the €22 million revenue gap and questions over retrofitting funding are the stakes worth tracking when the Budget arrives.

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Ireland’s carbon tax, now at €71 per tonne on petrol and diesel, builds on principles outlined in carbon tax workings in Ireland with hikes deferred to the October 2026 Budget.

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