Rural homes and businesses are being “unfairly penalised” following the exclusion of liquefied petroleum gas from reduced carbon tax rates in the recent budget, a Fianna Fáil Senator has claimed.
Speaking during a debate in the Seanad this week, Senator Robbie Gallagher said that the policy would place an “additional financial burden” on people living beyond the natural gas network.
“Over 50,000 households and tens of thousands of businesses rely on LPG for heating, hot water and cooking, many of them in rural areas beyond the national gas grid in counties such as Cavan and Monaghan,” he said.
“In fact, several hundred poultry producers located in counties Monaghan and Cavan rely on LPG for reliable and consistent heat for growth and laying conditions on their farms.”
Gallagher noted that the omission of liquid gas cylinders from the reduced carbon rate could worsen fuel poverty for those who have limited heating alternatives.
“The situation creates a clear affordability and fairness issue for thousands of households and businesses that live and operate beyond the natural gas network and depend on LPG for heating, hot water and cooking,” he said.
“As I say, many of these are located in rural Ireland.”
The senator pointed out that those using liquefied petroleum gas face significantly higher taxes by the end of the decade despite it being a cleaner fuel than oil.
“Despite producing fewer carbon emissions than heating oil, LPG users will now face double the carbon tax rate of kerosene by 2030,” Gallagher said.
“LPG produces around 11% less CO2 than heating oil yet LPG users face a higher carbon tax rate under budget 2027 measures, penalising those who have already switched to a lower carbon alternative.”
He added that while natural gas customers will see their rates capped, off-grid users will be subjected to continuous price hikes over the coming years.
“I am informed that while natural gas customers will now remain subject to a carbon tax rate of €48.50 per tonne of CO2 for the lifetime of the Government, LPG gas customers will continue to face a trajectory towards €100 per tonne of CO2 by 2030,” he said.
“Given the significance of this proposal for rural communities and businesses across Ireland, including the poultry sector, I call on the Government to amend this oversight in the Finance Bill by including LPG and carbon tax measures and supporting emissions reduction while ensuring that the transition remains affordable and fair to all energy users.”
Responding on behalf of the Government, Climate Minister of State Alan Dillon rejected the claim that those living beyond the natural gas network had been ignored by the latest budget.
The Fine Gael Minister of State argued that the state has already implemented a wide range of supports to ease the pressure of increased energy prices on consumers.
“To answer the Senator’s question, rural gas users who have switched from oil were not omitted from the carbon tax change in budget 2027 and, as previously mentioned, LPG used other than as a propellant also attracts a 9% VAT rate,” he said.
“This is a lower VAT rate that applies to kerosene-home heating oil, which attracts a rate of 13.5%.”
The carbon tax is a charge applied to carbon-emitting fuels such as coal, peat, oil, and natural gas, which is intended to encourage a shift towards renewable energy sources.
It has become a frequent subject of debate in the Oireachtas as rural representatives highlight the lack of alternative infrastructure available outside of major urban centres.
Liquefied petroleum gas is often utilised by off-grid properties that cannot connect directly to the national supply.