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Govt seeking energy tax derogation to tackle fuel crisis

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It is understood that a letter sent to Commission President Ursula von der Leyen by Taoiseach Micheál Martin and Tánaiste Simon Harris also seeks a derogation on sustainable alternative fuels requirements (Stock image)

The Irish Government is looking for a range of flexibilities under EU law in order to help tackle the fuel crisis, RTÉ News understands.

These include a derogation from the Energy Tax Directive, which requires minimum excise levels for market gas oil, or green diesel, so that excise duty can be lowered to the minimum allowable.

The Government is also seeking to avail of a green diesel rebate scheme, similar to the current diesel rebate.

It is understood that a letter sent to Commission President Ursula von der Leyen by Taoiseach Micheál Martin and Tánaiste Simon Harris also seeks a derogation on sustainable alternative fuels requirements.

The formal commission response may not come before next week, when the EU's executive brings forward a swathe of new proposals on the energy crisis prompted by the Iran war, which will be presented to an informal meeting of EU leaders in Cyprus.

"What's important is that any supports and interventions are appropriately calibrated, that they are done in a timely fashion, that they are temporary and, where possible, that they are targeted," Ireland’s EU Commissioner Micheal McGrath told RTÉ News.

Mr McGrath said the EU would respond in due course.

"We acknowledge the need to provide support to people who are feeling the real pain today of the very high cost of energy, in particular fuel, and the impact that that is having on particular sectors," he added.

While the EU was seeking to move away from dependence on imported fossil fuels, Mr McGrath said: "We recognise that for key sectors, including in agriculture, haulage and transport, we're not at a position right now where there are clear alternatives to the kind of fuels that they are using in the volumes that they need."

Earlier, following an emergency meeting of the European Commission in response to ongoing hostilities in the Gulf, President von der Leyen urged member states to coordinate their responses to the crisis so that national capitals are not competing against each other in the market for fuels.

"We will also coordinate oil stock releases to achieve the largest possible effect of these releases. And we will ensure that member states' emergency measures will not impact the Single Market," she said.

President von der Leyen said the lessons learned from the energy crisis that followed Russia’s invasion of Ukraine were that measures should be targeted to the most vulnerable and should be temporary.

The commission will consult this week with member states on temporary flexibilities in state aid rules for "the most exposed sectors".