Irish Farmers' Association (IFA) president Francie Gorman has said he has written to the Tánaiste and Minister for Finance Simon Harris calling for a suspension of the Carbon Tax on green diesel.

Gorman said he has set out the "very serious impact" that the Middle East conflict is having on farmers, and that he has sought "meaningful measures" to address the crisis.

Green diesel has increased by over 50% since the conflict in the Middle East began around three weeks ago.

“Apart from the extra direct cost for farmers, farm contractors who do a lot of work on farms are experiencing significant cost increases,” Gorman said.

The government is expected, early this coming week, to announce a number of measures to reduce the cost of fuels. However, the Tánaiste indicated in a Dáil debate on Wednesday (March 18) that the Carbon Tax would not be affected.

“Ahead of the government announcement...we have written to the Minister for Finance requesting that he suspends the Carbon Tax on marked gas oil [green diesel and kerosene]," Gorman said.

"Government tax on green diesel is circa 22c/L, of which 17c is Carbon Tax," he added.

According to the IFA president, the only way the government can make a significant difference to taxation on green diesel is to address Carbon Tax.

“We are repeating our proposal for a suspension of carbon tax to lessen the impact of the war and to show support to farmers and farm contractors,” Gorman said.

“Some politicians seem to see the Carbon Tax as some sort of sacred cow. However, the reality is that we have record tax receipts in the exchequer and these should be used to fund the spending currently being funded by the Carbon Tax,” he added.

Fertiliser

The conflict in the Middle East has also impacted fertiliser costs.

Gorman said fertiliser prices are "surging" for those who have not bought supplies.

"The conflict will add hugely to their costs. At EU level, the option exists to suspend the Carbon Border Adjustment Mechanism [CBAM] and this would help to mitigate price increases," he said.

The CBAM is effectively a tax on imports of carbon-intensive products into the EU. This includes fertiliser.

The IFA president noted that the EU fertiliser market has been disrupted as a sizeable amount of global fertiliser travels through the Strait of Hormuz, a key shipping channel in the Persian Gulf.

He called on Minister for Agriculture, Food and the Marine Martin Heydon to push the European Commission for the immediate suspension of CBAM tariffs on fertiliser.

“The reality is that there will be significant increases in food prices to address these cost hikes unless the government does something meaningful to mitigate the situation,” Gorman warned.