The Freight Transport Association Ireland (FTAI), is calling on the government not to increase Diesel fuel duty for commercial vehicles in the October 2018 Budget, to ensure that the freight and logistics sector in Ireland can continue to trade cost-effectively in a post-Brexit environment.
Currently, the rate of excise charged on petrol is 58.7 cent per litre, including a 4.6 cent carbon charge. The corresponding rates for diesel are 47.9 cent, with a 5.3 cent carbon charge. Fuel Equalisation is being touted as the solution to air pollution and on the private motorist reliance on Diesel fuelled cars
“With so much uncertainty still surrounding trading arrangements post-Brexit, and rumour and supposition abounding about potential price rises for a litre of diesel, FTAI believes the government has a responsibility to provide some stability for businesses in such a volatile world,” says Aidan Flynn, General Manager of FTAI, which represents the interests of the freight and logistics sector across the country. “Fuel costs now represent a third of the total cost of the operation of an articulated lorry. Additional increases in fuel costs would need to be passed on to customers, which could mean the death knell for new trading partnerships and a severe restriction on potential trading expansion for shippers, at a time when they need as much support and stimulus for trade as possible.
“Rather than increasing fuel tax across the board on the logistics sector, FTAI is calling on government to incentivise the industry to run its vehicles in the most fuel efficient and environmentally friendly way. The freight industry is under continued pressure from legislators, consumers and society to improve efficiency and reduce carbon emissions. With existing support from Enprova & SEAI, essential users can improve their fuel performance and thus reduce their emissions. The big benefit of improved fuel performance is firstly to the operators’ bottom line as profit; but government can send a strong signal to operators that fuel performance matters to improve air quality as well, with a CO2 tax discount based on improved performance. Gathering such performance data offers the opportunity to underpin future Government Policy with hard data from the industry itself, on elements such as vehicle choices and incentives, tax breaks for CNG/LNG and Electric.
“Placing an unnecessary, additional tax on fuel used by the logistics sector will not curtail the distances vehicles need to travel to conduct their daily work, or combat traffic congestion and other factors which contribute to increased pollution levels. Of course, air quality is of primary concern to all freight operators, but the sector has already made significant steps towards reducing emissions levels. These measures include adopting new European standards and adapting vehicles to meet them. An additional fuel tax on diesel, to equalise duty with petrol vehicles, would be a stealth tax on Irish businesses, and would hit opportunities for job creation and increased business across the sector.”
Freight operators have taken significant steps to introduce new fuel efficiency measures in recent years, as well as adapting vehicles to comply with the so-called Euro VI regulations which produce lower emissions levels. And, as Flynn says, rather than penalising the sector unnecessarily, the government should be looking at ways to reward good performance and encourage improved fuel efficiency:
“The freight industry has taken huge strides in recent years to improve fuel efficiency and reduce carbon emissions,” he says. “Improved fuel performance gives operators a more buoyant bottom line, keeps trading competitive and encourages business across the board. Rather than slapping another tax onto a sector which is already under extreme pressure due to the uncertain nature of trade, the government should be working with the sector to make further fuel management improvements, and ensuring that business has the support it needs to grow and flourish in an ever-changing economic climate.”
The FTAI is the voice of the logistics industry in Ireland, working to help its members develop safer, more efficient and sustainable supply chains and transport operations. An admired and influential membership trade association, FTAI works with government and the logistics sector to enhance the Irish freight and logistics industry’s influence and image by promoting high standards of safety and compliance. For more information, please visit: http://www.ftai.ie/