Rural dwellers and small businesses have been unfairly penalised by the omission of liquid gas cylinders from the reduced carbon tax rate announced for heating fuels in the budget, a lobby group has warned.
Liquefied petroleum gas (LPG), commonly known as liquid gas, was excluded from the reduced carbon tax rate announced in the budget by SImon Harris. 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 natural gas grid.
It is feared that these rural hotels, restaurants, farms, tourism operators and food businesses could now face higher operating costs than competitors who are connected to the natural gas network.
Liquid Gas Ireland (LGI), whose members include Calor and Flogas, told the Sunday Independent that the exclusion of their products from the carbon tax reduction will place an additional financial burden on off-gas-grid households and businesses at a time when many are already facing significant energy cost pressures.
The industry body has warned that the decision could exacerbate fuel poverty among consumers who have limited practical alternatives available, and are unable to make the substantial upfront investment required to switch heating systems.
“Omitting LPG from the reduced carbon tax rate announced in Budget 2027 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,” said Sytze Nijman, CEO of Calor Ireland.
“Many of these customers have already transitioned to a lower carbon and cleaner fuel and have limited practical alternatives available to them.
“We are calling on the Government to amend this oversight by including LPG in carbon tax measures, supporting emissions reduction while ensuring that the transition remains affordable and equitable for all energy users.”
Kevin Donnelly, managing director of Flogas Ireland, said that for many homes and businesses, the use of liquid gas is not a choice but an essential energy source.
“The current approach risks increasing costs for consumers who cannot readily switch to another heating fuel, while providing relief to users of more carbon-intensive alternatives,” he said.
Donnelly claimed it is particularly unfair to households and businesses that have already taken steps to reduce their carbon emissions by switching from heating oil to lower-carbon LPG, only to now face a higher carbon tax burden as a result.
“We urgently call for an amendment to the Finance Bill to ensure a fair outcome for customers across Ireland,” he said.
