How Ireland's Carbon Tax Is Affecting Your Energy Bills — and What Comes Next

Ireland's carbon tax is rising every year through 2030. We explain what it costs you now, how it affects gas and electricity bills, and what the government plans to do with the revenue.

What Is Ireland's Carbon Tax?

Ireland's carbon tax is a charge on fossil fuels based on their CO2 content. It applies to petrol, diesel, home heating oil, natural gas, and solid fuels. The tax is designed to make carbon-intensive energy more expensive relative to clean alternatives, encouraging households and businesses to switch.

How Much Is It?

Ireland's carbon tax was €26 per tonne of CO2 in 2020. It has increased by €7.50 per tonne annually and stands at €56 per tonne in 2024, rising to €63.50 per tonne in 2025. The government has committed to raising it to €100 per tonne by 2030.

Impact on Your Gas Bill

For a typical household using 11,000 kWh of gas per year, the carbon tax adds approximately €120-€140 per year to the gas bill at current rates. By 2030, when the tax reaches €100/tonne, the annual addition will be closer to €220-€240.

Impact on Electricity Bills

The carbon tax on electricity is more indirect. Natural gas generates around 50% of Ireland's electricity, so the carbon tax on gas used by power stations flows through to electricity prices. This is estimated to add approximately €40-€60 per year to the average household electricity bill.

What Happens to the Revenue?

The Irish government has committed to using a portion of carbon tax revenue for energy poverty measures and retrofitting schemes. The SEAI grants for insulation, heat pumps, and solar panels are partly funded by carbon tax receipts. The idea is to use the tax to fund the transition that will ultimately make the tax irrelevant for those who move off fossil fuels.

Protecting Yourself from Carbon Tax Increases

The most effective hedge against carbon tax increases is to reduce your use of taxed fuels:

Insulate your home to reduce gas demand

Install a heat pump — heat pumps run on electricity, not gas, and their carbon content is falling as the grid gets greener

Install solar panels — solar reduces your electricity bill and is completely carbon-tax-free

Switch to an EV — EVs eliminate petrol and diesel carbon tax entirely

Each of these steps insulates you from future carbon tax increases and positions your home for a lower-cost energy future.

Use Billmanage to compare energy tariffs and explore our solar calculator to see how quickly solar pays back in the Irish market.