Irish road haulage accepts that transport must play its part in reducing carbon emissions. What the industry cannot accept is being progressively penalised for using diesel when, for many HGV operations, there is still no practical or commercially viable alternative, writes John Loughran.

That is the challenge the Government must address as the European Union prepares for the introduction of its new Emissions Trading System, ETS2.

ETS2, which is now scheduled to become fully operational in 2028, will introduce carbon pricing for fuels used in road transport, buildings and certain other sectors.

Hauliers will not purchase ETS2 allowances themselves. The obligation will sit further up the supply chain with fuel suppliers, which will have to monitor emissions and surrender carbon allowances corresponding to the fuels they place on the market.

But ultimately somebody has to pay.

The obvious concern is that some or all of the additional carbon cost will find its way into the price of diesel paid by transport operators.

Even a few cents matters

For the private motorist, another few cents on a litre of diesel is unwelcome. For a haulage company purchasing hundreds of thousands – or even millions – of litres every year, it can be enormous.

An additional 10 cent per litre represents €10,000 for every 100,000 litres consumed.

For a fleet using one million litres annually, that’s another €100,000 on the fuel bill.

At 15 cent per litre, it becomes €150,000.

These are not insignificant amounts that can simply be absorbed by transport companies operating on tight margins.

They eventually have to be passed through the supply chain – into freight rates and ultimately into the price of the goods transported.

Ireland is in a different position

There is an important qualification.

Ireland already has a domestic carbon tax on road fuels and has sought to avail of provisions that can allow member states with equivalent national carbon taxation to temporarily exempt fuel suppliers from surrendering ETS2 allowances.

Therefore, it would be wrong to suggest that ETS2 will simply add a predetermined amount per litre on top of Ireland’s existing carbon taxes from 2028.

However, the bigger issue remains.

European and Irish policy is deliberately making carbon-intensive fuels progressively more expensive in order to encourage businesses and consumers to move towards lower-emission alternatives.

That policy can only be considered fair if those alternatives actually exist.

For large sections of the Irish haulage industry, that remains questionable.

Where is the alternative?

Battery-electric trucks are developing rapidly and will undoubtedly become suitable for an increasing number of operations.

The Government has also strengthened its Zero Emission Heavy Duty Vehicle supports, with grants of up to €500,000 per year available to businesses investing in qualifying electric trucks and buses. Separate infrastructure supports of up to €300,000 can help businesses develop charging facilities.

These are welcome developments.

But purchasing an electric HGV is only one part of the equation.

Operators must consider vehicle cost, range, payload, charging time, depot electricity capacity, grid connections, public charging availability and the residual value of expensive new technology.

A truck that spends its working life on predictable regional routes and returns to the same depot every night is one thing.

A 44-tonne combination engaged in long-distance Irish and international haulage is quite another.

Ireland is working towards the development of high-powered charging hubs on major transport corridors and charging solutions for commercial fleets and heavy-duty vehicles. But that infrastructure needs to be available on the ground – not simply contained in strategies – before operators can reasonably be expected to abandon diesel.

Government has already recognised the problem

The Government’s response to the sharp increase in fuel costs during 2026 demonstrated something important: policymakers recognise that road transport cannot simply absorb unlimited increases in energy costs.

The Road Transporters Support Scheme provided direct financial assistance to qualifying haulage and passenger transport operators in response to higher fuel prices.

The same principle should apply to carbon-related increases.

If Government policy contributes to making diesel substantially more expensive while an operator has no commercially viable alternative fuel or powertrain available for the work being undertaken, then some form of protection is justified.

That brings the Diesel Rebate Scheme firmly into the discussion.

Rather than allowing carbon-related increases to simply accumulate on the industry’s fuel bill, Government should examine how the rebate can evolve to protect licensed professional operators during the transition.

That doesn’t mean subsidising diesel indefinitely.

It means recognising the difference between encouraging a transition and imposing a penalty where transition is not yet realistically possible.

Ireland cannot afford to undermine its haulage industry

There is also a wider economic argument.

Ireland is an island economy on the western edge of Europe. Almost everything consumers purchase has spent at least part of its journey on a truck.

Irish exporters depend on efficient road freight to reach ports and European markets, while retailers, manufacturers, farmers, construction companies and thousands of SMEs depend on road transport every day.

Increasing the cost of haulage inevitably increases costs elsewhere in the economy.

The Government therefore needs a clear strategy ahead of ETS2.

That should include protecting the competitiveness of licensed hauliers from excessive carbon-related fuel increases, maintaining an effective Diesel Rebate Scheme, accelerating investment in HGV charging infrastructure and continuing meaningful financial support for operators prepared to invest in zero-emission vehicles.

Most importantly, policy must recognise operational reality.

The road haulage industry should be encouraged and supported to decarbonise – and operators should embrace commercially viable opportunities to reduce emissions when they become available.

But hauliers should not be punished for continuing to use diesel when diesel remains the only realistic option for the work they are being asked to do.

The transition to zero-emission road freight has to be achievable as well as ambitious. Government policy must provide the infrastructure and viable alternatives first – and only then expect operators to make the switch.