2026-02-17

The issue I raise is hydrotreated vegetable oil, HVO, which is an alternative to diesel. It is an extraordinary product that comes from the treatment of plant matter with hydrogen. I am not going to pretend for a moment that I understand how it works, but I know that the product that results from it is interchangeable with diesel in cars, for example, and results in a 90% reduction in carbon emissions when it is used. We have this fuel and 20% of the global output, which is over 30 million tonnes, originates within the European Union. It is sustainable from the point of view of carbon emissions, the sourcing of the fuel and energy security within the European Union. It is a fuel that is key to making our targets under the obligation to reduce our carbon emissions by 50% by 2030. It is committed to in the programme for Government, which specifically commits to increasing the use of HVO and carbon-reducing fuels. It also commits to better tracking to ensure HVO comes from sustainable sources, reviewing tax policy to encourage HVO use and engaging with the EU to allow incentives for low-emission fuels. All of that is great, but at the moment HVO is subject essentially to the same tax regime as its much more carbon-heavy cousin, the traditional diesel that is put into cars. HVO does not result in a drop in performance or damage to the engine. It is endorsed by major car manufacturers. It is used by large companies, including the Dublin Airport Authority and Sisk contractors. It is already in use. It is available on forecourts in centres such as Maxol in Inver. This is the real question: why are we charging the same rate of tax on HVO as we are on diesel when there are myriad benefits to using HVO instead of diesel and when we are reducing our carbon emissions by 90%? We are not losing anything and are using a sustainable fuel that can be sourced right here in the European Union. The fuel is subject to 23% VAT, which I do not really have a problem with. It is also subject to the biofuels levy, which, at 0.1 of a cent per litre, is not a big deal. However, it is also subject to the mineral oil tax. HVO biofuel substituted for auto diesel is subject to the same non-carbon component of excise. That makes no sense at all. We have committed in the programme for Government to going down the road of finding alternative fuels that are going to reduce our emissions. Let us be honest, transport is one of the major sources of emissions in this country. I should say that HVO is taxed less through VAT when it is used as home heating oil, but as a vehicle fuel it is taxed at the same rate as diesel. Why are we not saying that this is a way we can address one of the major sources of carbon emissions in Ireland, that is, transport? This fuel can be used in buses and cars. Whatever uses diesel can also use HVO. Everybody in this House knows how important it is that we meet those 2030 targets. It is important not just because of the financial aspect of the potential fines, which will increase as the availability of carbon emissions trading reduces, but also because the value of making those targets to secure this country and this world against the effects of climate change is enormous. If we are serious about that, why are we saying to people who are using diesel cars or diesel fuel that it does not matter if they use HVO or diesel, when we know that, in fact, it does matter? Why are we telling them they will pay the same amount of tax and the same levies, and that it will cost them the same to use diesel, which is a massive pollutant, as HVO, which has 90% less carbon emissions? Can we not get our act together enough to implement the promises we made in the programme for Government to make it easier for people to chose the sustainable fuel that HVO is?

I thank the Deputy for raising this matter, which I am taking on behalf of the Minister for Transport, Deputy O’Brien. I will give the Deputy the response I have, but I will bring the particular point he raised back to the Minister. I suggest that the Deputy follow up himself and write to the Minister on the point in question. Renewable fuel is a vital transitionary measure in transport decarbonisation, falling under the improve dimension of the avoid-shift-improve framework adopted under the Climate Action Plan 2024. As the shift to electrification and further increases in public transport and active travel are fully realised, sustainable renewable transport fuels provide immediate climate change mitigation utilising the existing vehicle fleet. The supply of renewable transport fuels such as HVO in the transport sector in Ireland is driven by the climate action plan biofuel blending targets for 10% ethanol in petrol and 20% biodiesel equivalent in diesel by 2030, as well as European targets for the total renewable energy share in transport consumption of 24% by 2030. These targets are implemented through the renewable transport fuel obligation, RTFO, which places a statutory obligation on suppliers of road transport fuels to ensure that a proportion of the fuels they place on the market in Ireland is produced from renewable sources. The National Oil Reserves Agency, NORA, is responsible for administration of the RTFO. The Renewable Transport Fuel Policy 2025-2027 sets out a pathway to incentivise supply of renewable fuel in transport through annual increases in the RTFO rate to 2030, as well as ensuring that EU sustainability and greenhouse gas emissions reduction criteria are adhered to. The policy is supported by analysis and modelling by NORA and is revised every two years through extensive engagement with the agency and the industry, including fuel suppliers and biofuel producers. The RTFO is the most impactful way to achieve the policy goal of transport decarbonisation in the near term. In 2024, corresponding to an obligation rate of 21% by energy, the RTFO delivered a physical blend of approximately 10% biofuel in diesel supplied to road transport, of which approximately 7% was FAME biodiesel and 3% was HVO. It is expected that further increases in the RTFO rate projected to 2030 under the policy will see a physical blend in the region of 13% HVO in diesel supplied in the State. The 2026 RTFO rate is 32% by energy. This level of biofuel blending within diesel is well within the diesel specification EN590 for EU vehicle compatibility and air quality requirements. It is expected that achieving the CAP biofuel blending goal in 2030 will deliver emissions abatement of 1.08 MtCO2eq. In 2024, biofuel blending delivered an overall saving of approximately 7.1% in lifecycle greenhouse gas emissions from the road transport sector. Of course, it is essential that biofuels imported into Ireland meet the strict sustainability criteria set out in the EU renewable energy directive for the purpose of environmental protection and emissions reduction. NORA is responsible for ensuring compliance by fuel suppliers with these sustainability criteria, which is assured through an EU sustainability certification framework involving certification of economic operations globally by certification bodies against standards established under EU-approved voluntary schemes. NORA provides ongoing assurance on the sustainability of the current supply of biofuel to Ireland under the RTFO. Noting the projected future cross-sectoral demand for HVO, under the current renewable transport fuel policy, the Department of Transport has commissioned a study on the hierarchy of use of HVO across transport and other sectors. The study will inform the continued rationale for State intervention through blending targets and incentives to promote the most efficient use of HVO across transport modes and non-transport sectors relative to the alternative renewable energy options in each sector. The study is expected to be completed in quarter 2 of this year. I humbly suggest to the Deputy that this particular vehicle is currently being looked at by the Department. It is obviously an area that could include consideration of his proposal.

Topical Issue Debates are a really important way that we can raise issues and get direct answers. I entirely respect that the Minister of State is taking a number of matters that do not come under his Department’s remit. However, it is a source of some frustration that the line Minister from the Department is not here because that would be much more useful. I could just have tabled a written question on the matter. It would have been more helpful if a Minister from the Department to which this issue relates had been here. I appreciate what the Minister of State said. I recognise the veracity of everything in his response and the progress being made. As stated, however, HVO is a perfectly adequate substitute for traditional diesel. It emits 90% less carbon without compromising the energy it provides as fuel for diesel engines. The transport sector is one of the larger emitters of carbon in our economy. In the climate action plan, we have committed to reducing our carbon emissions by 50% by 2030. This is a key way in which we could do that. I do not know whether the decision not to reduce the tax on HVO is based on the loss the Exchequer might suffer as a result. That is fine, but whatever loss the Exchequer suffers would pale in comparison with the fines we will face after 2030 if we do not meet our target of reducing emissions by 50%. Let us get serious about implementing real tax changes, and just not for the sake of it. We must say to consumers that doing this would be to their benefit, not just in terms of the environmental impact or reducing the emissions from their cars but also because they will feel the impact in their pockets. We must also informed that, as well as saving 90% on emissions, it would be cheaper to put HVO into their cars. Let us make this a real choice for consumers who drive diesel cars. Let us make it easy for them to chose a more sustainable and less carbon-emitting fuel.

I again thank Deputy Ward for raising this matter, which, as stated, I am taking on behalf of the Minister for Transport. The transport sector has a significant role to play in Ireland's transition to a low-carbon society and economy as part of the wider European goal of achieving climate neutrality by 2050. Reducing our historical reliance on imported fossil fuels in transport and switching to alternative fuel technologies will be essential in the context of decarbonising the sector. As outlined, the Department of Transport's Renewable Transport Fuel Policy 2025-2027 is one of the most effective and immediate policy levers available to the Government in this regard. That policy ensures an incremental transition to lower carbon-emitting fuels in transport, largely by using existing vehicle technology. HVO is one of several renewable transport fuels contributing to transport decarbonisation in Ireland. Indigenous biofuels and biogas also play a key role in Ireland's decarbonisation. Implementation of the renewable transport fuel policy considers the need to support and develop Irish production of biofuels and biogas. Developing Ireland's domestic biofuel supply potential will have benefits for diversity in securing security of supply. It will also have economic and environmental benefits. It should be noted, particularly in relation to the use of renewable fuels in private cars, that biofuels are also blended with petrol. Increasing the blend of bioethanol in petrol is one of several transport sector measure towards achieving the 50% reduction in carbon emissions by 2030, as set out in the climate action plan. A move to E10 petrol in 2023 is seeing the desired result, with a 9% volume blending of ethanol in petrol in 2024, up from 4.9% volume blending in 2022, as recorded by NORA. Ireland's policy on renewable fuels continues to provide future supply of sustainable advanced biofuels and renewable fuels of non-biological origin. I will take Deputy Ward's specific point back to the Minister. The Deputy's argument was very effective, but I would have thought a direct communication with the Minister and his office on the matter would assist very much in terms of it being considered in a comprehensive way by the Department of Transport.