Solid Fuel Carbon Tax (SFCT)
Reliefs
Relief for biomass products
Biomass is defined as a renewable energy source from living or recently living plant and animal materials which can be used as fuel.
Since 1 November 2016 a partial relief from Solid Fuel Carbon Tax (SFCT) applies to biomass products. Biomass products are defined as “any solid fuel product with a biomass content of 30 per cent or more”. The rate of relief that applies to a biomass product depends on the biomass proportion of the product.
See Rate of Tax page for current rates of relief applicable to solid fuel products containing biomass.
The statutory requirements for the identification and marking of biomass products are set out in regulations (S.I. No. 529 of 2022). The partial relief applies to first supplies of solid fuel that meet the statutory requirements for biomass products.
The relief may be applied at source by the supplier provided the biomass products supplied comply with the regulations. All records including certification of biomass content must be kept by the supplier for inspection by Revenue as required.
When the relief is applied at source the supplier must declare the amount and category of biomass product supplied on Form SFCT1 Return and Declaration. The supplier accounts for and pays SFCT on the biomass product concerned at the reduced rate specified based on the biomass content.
Reliefs for electricity generation
A full relief from SFCT applies to solid fuel supplied for use solely in the generation of electricity (excluding combined heat and power cogeneration (CHP)).
The relief may be applied at source by the supplier if certain conditions are met. Full details are available in the reliefs section of the SFCT Compliance Procedures Manual.
Reliefs for greenhouse gas emissions permit holders
A full relief applies to peat delivered for use in an installation covered by a greenhouse gas emissions permit. This permit must be issued by the Environmental Protection Agency.
A partial relief applies for coal delivered for use in an installation covered by a greenhouse gas emissions permit. The coal concerned is taxed at the minimum permitted by the European Union (EU) Energy Tax Directive - €4.18 per tonne.
The relief may be applied at source by the supplier if certain conditions are met. Full details are available in the reliefs section of the SFCT Compliance Procedures Manual.
Relief for High Efficiency Combined Heat and Power Cogeneration (HE CHP)
Since 1 January 2017 a full relief applies from SFCT for solid fuel (including peat) used in environmentally friendly HE CHP. A partial relief existed up to the end of 2016. The relief from SFCT applies to the portion of fuel used in a CHP plant that generates high efficiency electricity.
Additional information on this relief is available in high efficiency combined heat and power cogeneration section of the website.
Other SFCT reliefs
A full relief applies to solid fuel delivered for use:
- in chemical reduction
- in electrolytic or metallurgical processes
- under diplomatic arrangements in the State.
The above reliefs are applied by way of repayment to the consumer. The consumer must make a claim within six months of the end of an accounting period.
For all first supplies of solid fuels which qualify for the above reliefs, the supplier is liable to pay SFCT.
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