Carbon Tax Rebates For CHP Sites

The Irish Government announced an increase in the rate of carbon tax levied on all natural gas customers in the December 2011 budget. From May 1st 2012, the rate charged per tonne of CO2 increased from €15 per tonne to €20 per tonne. This means that the carbon rate charged for natural gas customers increased from €0.00277 to €0.00370 per kWh (ex VAT). Exemptions from carbon tax continue for some large commercial users (e.g. Power stations).

CHPs using Natural Gas as Fuel

Following the European Directive 2004/8/EC, the government chose to use partial carbon tax relief as the methodology to of supporting environmentally friendly heat and power cogeneration, provided that minimum efficiency levels are met. The reduced carbon tax will be charged at a rate of €0.00054 per kWh (ex VAT) on the portion of gas used by the cogeneration plant not by the entire site. This will give an approximate 10 percent saving on the CHP energy portion of a gas bill. The tax is not back dated so it is imperative to complete and submit the application as soon as possible.


The Dept. of Finance has designated the Commission for Energy Regulation (CER) as the competent body with the authority to decide which installations meet the directive requirements. A U.K. based consultant has been appointed by CER to assess and validate HE CHP installations in Ireland. Most installations that we have completed so far meet these requirements, and if they for cases where they don’t we have advised on the (normally low-cost) route to becoming compliant.

However please be prepared as process is long and normally takes at least 6 months for the certificate to be issued.