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Contractors say they’ve ‘no option’ but to pass on Carbon Tax increase directly to farmers

Agricultural contractors will will have no option but to pass on a ’28pc Carbon Tax cost increase’ directly to farmer customers, the Association of Farm & Forestry Contractors in Ireland (FCI) has said.

This, it said, will equate to almost a 14pc increase for all Farm & Forestry Contractor current annual charges turnover levels of more than €700 million paid for by Irish farmers.

The increase of €7.50 per tonne in Carbon Tax which brought the Carbon Tax penalty for Contractors to €33.50 per tonne, will mean that Farm & Forestry Contractors suffer an unfair Carbon Tax burden of €13,455 per annum, based on a typical use level of 150,000 litres of annual diesel consumption, as the Carbon Tax now equates to 8.97 cent per litre of the total cost of agricultural diesel.

“Despite the fact that the modern machinery used by Farm & Forestry contractors also consumes costly AdBlue fuel additives to reduce emissions, our members are unable to have the benefit of the double taxation Carbon Tax relief which is provided to their farming customers,” said FCI National Chair, John Hughes.

“They are also unable to avail of any rebate scheme, which has been put in place for road haulage operators,” he added, “despite these additional operating costs to lower emissions through the use of AdBlue system.”

Mr Hughes highlighted that while the Budget 2021 has allocated €20 million of the proceeds of the increase in Carbon Tax to the Department of Agriculture, Food and the Marine for new environment schemes, this is being paid out of a total Carbon Tax contribution from Farm & Forestry Contractors of €36 million from their fuel bills

“FCI believes that on this basis any new schemes to encourage farmers to adopt lower emission forms of agriculture must now incentivise contractors rather than farmers to purchase new lower emission machinery, because it is contractors who are the ones funding such programmes.

“We cannot have a situation into the future where the Carbon Tax contributions from the fuel bills of Farm & Forestry Contractor are being used to grant aid farmers to buy machinery so as to put contractors out of business.

“There has been enough damage done to the Contracting sector so far with the current unfair approach to grant funding of Low Emission Slurry Scheme (LESS) that excludes contractors, that this cannot be repeated,” he added.

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