When Does the Carbon Tax Come Out in Ireland? 2026 Rates

If you heat your home with oil or fill up your car regularly, Ireland’s carbon tax directly affects what you pay at the pump and on your energy bill. The 2026 Budget locked in a roadmap that raises the rate by €7.50 per tonne of CO₂ annually until it reaches €100 by 2030. Here’s exactly when those increases apply, what they cost per fuel type, and why the Government recently hit pause on one of them.

Current petrol/diesel rate: €71 per tonne CO₂ since 8 October 2025 · Other fuels rate: €63.50 per tonne · Next scheduled increase: 1 May 2026 · Target by 2030: €100 per tonne

The table below summarises the current and planned carbon tax rates across fuel types and their effective dates.

“The Government has to go ahead with this, primarily because if it doesn’t, we will lose the derogation on the new ETS2… you would be paying a tax to Brussels.”

— Prof Thorne, Climate Change Advisory Council member, RTE

“An increase in the carbon tax will be under further consideration in the Budget.”

— Tánaiste (Deputy Prime Minister), Roscommon Herald

When to expect carbon tax?

The Government’s legislated schedule means Ireland’s carbon tax does not increase all at once. Instead, different fuel types have their own application dates, which creates a split rollout that many households need to track separately.

Next increase date

The next scheduled carbon tax increase is 1 May 2026, targeting home heating fuels including natural gas, home heating oil (kerosene), coal, and peat. These fuels currently sit at €63.50 per tonne CO₂ and were slated to rise to €71 per tonne. However, the Government announced in April 2026 that this increase is under “further consideration” pending the October Budget, according to BreakingNews.ie and the Roscommon Herald. The Tánaiste stated the increase would be reviewed when the Budget is finalised, with the deferral estimated to cost €22 million in lost revenue.

Annual Budget schedule

Petrol and diesel increases have been locked to Budget Day each year through 2029. The current €71 per tonne rate for auto fuels applies from 8 October 2025, representing a rise of €7.50 from the previous €63.50, per the Revenue.ie Budget Summary. From Budget 2026 onwards, the same €7.50 annual increment is planned for each fuel category until the €100 per tonne 2030 target is reached.

What is the carbon tax in Ireland 2026?

Ireland’s carbon tax is a flat fee applied per tonne of CO₂ emitted when burning certain fuels. It applies differently to transport fuels (petrol and diesel) versus home heating fuels (natural gas, kerosene, coal, peat), and the rates diverged after the October 2025 Budget introduced auto fuel increases immediately while delaying home heating fuel changes.

Planned rate for 2026

The planned 2026 rate for home heating fuels is €71 per tonne CO₂, a €7.50 increase from the current €63.50. The official Budget 2026 documentation from Revenue.ie confirms that Natural Gas Carbon Tax (NGCT) rises to €12.84 per MWh from 1 May 2026, while Solid Fuel Carbon Tax (SFCT) rates adjust to €187 per tonne for coal, €130.18 per tonne for peat briquettes, and €64.52 per tonne for milled peat on the same date.

Fuel-specific adjustments

The Government deferred the home heating increase to avoid hitting households during peak winter heating season, a policy choice highlighted by Lambe Oil. The May timing was originally selected to catch the end of the heating season, but political pressure led to the postponement. Meanwhile, petrol and diesel received their increase immediately on Budget Day, with the Government also reducing general petrol and diesel excise duties to partially offset the carbon tax impact.

What is the current rate of carbon tax?

The current carbon tax rate depends on which fuel you use. Ireland operates two parallel rate structures that diverged after the October 2025 Budget.

Petrol and diesel

Petrol and diesel have carried the €71 per tonne carbon tax rate since 8 October 2025. At the pump, this translates to approximately 16.43 cent per litre for petrol and 19.00 cent per litre for diesel, according to Selectra Ireland. For a typical 60-litre petrol tank, that adds roughly €1.28; for diesel, the same volume costs about €1.48 extra. The actual MOT (Mineral Oil Tax) equivalents recorded in Revenue.ie are €706.14 per 1,000 litres for petrol and aviation gasoline, and €615.76 per 1,000 litres for auto-diesel and heavy oil.

Other fuels like home heating oil

Home heating fuels—natural gas, kerosene (home heating oil), coal, and peat—remain at €63.50 per tonne CO₂ pending the outcome of the October 2026 Budget review. When the increase eventually applies, Selectra Ireland estimates it will add approximately €157 per 900-litre kerosene delivery. For natural gas, an average 11,000 kWh household can expect an additional €154 annually including VAT, per Selectra’s modelling. The smaller per-litre impact for kerosene is 1.9 cent per litre before VAT (2.1 cent including 9% VAT), as reported by Lambe Oil.

How much is carbon tax going up in May?

The May 2026 increase, if it proceeds, represents a €7.50 per tonne rise from €63.50 to €71 per tonne CO₂ for home heating fuels. The Government has not confirmed the exact amount will be the full €7.50, but Budget 2026 documentation and the legislative trajectory both point to that figure.

Increase amounts

Based on the planned €7.50 increase: kerosene would rise by approximately 1.9 cent per litre (2.1 cent incl. VAT), natural gas by €12.84 per MWh, and solid fuels by their respective per-tonne equivalents. Switcher.ie estimates the carbon tax rise adds €17 annually to household gas bills specifically from the May 2026 timing. The OECD’s Effective Carbon Rates 2025 report notes that 53.8% of Ireland’s greenhouse gas emissions were subject to a positive Net Effective Carbon Rate in 2023, underscoring the policy’s broad reach.

Impact on farm diesel

Agricultural diesel (marked gas oil) carries a separate relief mechanism. The current carbon tax on marked diesel is €90.81 per 1,000 litres, a rate set to change from 1 May 2026 depending on Budget decisions. Farm diesel relief has historically been maintained to avoid disproportionate impacts on food production costs, though the Government deferred the broader May increase to protect rural households most dependent on heating oil.

How much is carbon tax on fuel?

Carbon tax on fuel is expressed per tonne of CO₂ emitted, but fuel retailers and consumers experience it as a per-litre or per-kilowatt-hour charge that gets built into the final price.

Per tonne calculations

The current €71 per tonne on petrol and diesel translates to specific per-unit costs because fuel’s CO₂ density is fixed by chemistry. Petrol emits approximately 2.31 kg CO₂ per litre when burned; diesel emits approximately 2.68 kg CO₂ per litre. Multiplying these emission factors by €71 gives the per-litre carbon tax amounts cited above.

Examples for petrol, diesel, heating oil

For an average car doing 15,000 km per year at 7 litres per 100 km, the annual carbon tax on petrol comes to roughly €74. For a typical home heating oil customer using 900 litres per year, the current annual carbon tax at €63.50/tonne is approximately €58; if the May increase proceeds to €71/tonne, that rises to approximately €65—an extra €7 per year. The contrast with natural gas is sharper: a household using 11,000 kWh annually currently pays around €70 in carbon tax; the May increase pushes this to approximately €78, per Selectra’s household cost modelling.

The pattern: heating oil and natural gas users face smaller absolute increases than motorists on a per-household basis because the carbon tax rate is identical but fuel consumption volumes differ. The equity argument is that lower-income rural households relying on oil for both heating and transport bear a combined burden that urban gas-connected households do not.

What this means: households still waiting for the May 2026 decision should budget for a €7.50 per tonne rise in home heating fuels, but the exact timing and amount remain contingent on the October 2026 Budget outcome.

Ireland Carbon Tax 2026 Rates