# Time to abolish Green Diesel and operate a rebate scheme for farmers



## Joe_90

Heard about this on the last word this evening.

[broken link removed]

Basically green/agri diesel is 50c a litre cheaper than road diesel so smugglers take the dye out and sell it cheaper than road diesel.  It cost the taxpayer between €100 - 150m pa.

Its time to get rid of green diesel and get the farmers to apply for a rebate at the end of the year.


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## Jim2007

And the cost of setting up the new department would be???


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## Brendan Burgess

Just simply abolish Green Diesel completely. Farming is doing very well at the moment, so it's a good time to do it.

It is facilitating criminals and they are dumping their sludge anwhere they like. 

Brendan


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## mathepac

Jim2007 said:


> And the cost of setting up the new department would be???


There is no need as Revenue already has a system in place for rebating registered disabled drivers with the excise / VAT (can't remember which or even both) on the diesel they use. The system works well by all accounts and the key document is a receipt showing the amount of diesel purchased in a period issued at the pumps.

It is a very very good idea, IMHO.


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## Purple

Brendan Burgess said:


> Just simply abolish Green Diesel completely.


Agreed. Why on earth do farmers get this subsidy and not other businesses?


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## Hoagy

Not only farmers use it though: 

*Marked Gas Oil*

Also known as Gas Oil, Green Diesel or 35 second oil. This fuel is green in colour (dyed), is subject to a V.A.T. rate of 13.5% and is used in the following areas:
*Tractor Diesel* - Gas Oil used in agricultural applications
*Heating Oil* - Gas Oil used in the heating of large premises such as schools and factories.
*Diesel Medium* - Gas Oil used in commercial applications such as machines or plant equipment.
*Marine Diesel* - Gas Oil used in marine applications.


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## ajapale

Purple said:


> Why on earth do farmers get this subsidy and not other businesses?



Because by enlarge farmers' tractors operate in fields off the public highway?


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## horusd

ajapale said:


> Because by enlarge farmers' tractors operate in fields off the public highway?



I think that is the reason. Years ago working in insurance, I remember the premium for a year used to be 50 bucks a Massey Ferguson, and for the same reason. The green diesel should be got rid of. Apparently this has been done around the world and the farmers claim a rebate. I've no problem with the farmers getting it either.


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## Kerry Gooner

How do you ensure that farmers only use diesel for appropriate purposes and do not pass on cheaper fuel to their family and friends.


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## briste

Surely less than the estimated €130Mn a year we are losing in revenue to criminals?

Not to mention the damage to the environment (sludge) and various diesel cars.


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## T McGibney

Kerry Gooner said:


> How do you ensure that farmers only use diesel for appropriate purposes and do not pass on cheaper fuel to their family and friends.



Any such scamming would need to be on a truly epic scale before it would cost the exchequer what is being lost at the moment via the diesel washing scam.  

It shouldn't be beyond Revenue, with Teagasc and Dept of Ag assistance, to devise a methodology to calculate a diesel usage ceiling for each affected farmer and agri contractor. Applications for excise refunds based on usage above the applicable ceiling could either be routinely barred, or made conditional on passing an audit.


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## csirl

Hoagy said:


> Not only farmers use it though:
> 
> *Marked Gas Oil*
> 
> Also known as Gas Oil, Green Diesel or 35 second oil. This fuel is green in colour (dyed), is subject to a V.A.T. rate of 13.5% and is used in the following areas:
> *Tractor Diesel* - Gas Oil used in agricultural applications
> *Heating Oil* - Gas Oil used in the heating of large premises such as schools and factories.
> *Diesel Medium* - Gas Oil used in commercial applications such as machines or plant equipment.
> *Marine Diesel* - Gas Oil used in marine applications.


 
Home heating oil central heating systems use also green diesel. 



> How do you ensure that farmers only use diesel for appropriate purposes and do not pass on cheaper fuel to their family and friends.


 
There's also nothing stopping any person ordering some home heating oil and passing it on.


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## michaelm

This would need to be done North and South otherwise it wouldn't be effective.


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## mathepac

T McGibney said:


> ... It shouldn't be beyond Revenue, with Teagasc and Dept of Ag assistance, to devise a methodology to calculate a diesel usage ceiling for each affected farmer and agri contractor. Applications for excise refunds based on usage above the applicable ceiling could either be routinely barred, or made conditional on passing an audit.


This is how the existing scheme for disabled drivers / passengers works. Mileage is part of the claim and is used to "sanity check" claims. Any claims on the high side of the bell-curve get marked for audit of all the receipts and the recorded mileage.


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## in the mire

If you abolish green diesel, then every farmer in the country will be targets for theft of diesel, Most farmers have a minimum of 300 gal tank up to 1000 gals. Plus what is in the tractor tanks which could be 70gals, Most green diesel now is been stolen by people who can remove the dye out of it and sell it on or just put it into their own vans and take a chance, so there is a certain deterrent with green diesel in farm yards. If there was white diesel then every tom dick and mary would be steeling it. I know people are going to say.... why cant the farmer secure the tanks better?? I know of a theft where roof sheeting was removed to get into the shed where the tank was locked in!!! If there is 2000 euro of liquid in a tank then CERTAIN people will stop at nothing to get at it.


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## jpd

Why not make farmers pay the full cost of the fuel. This will undoubtedly raise food prices for Irish grown food, but the money saved on the green diesel could be given out to all food buyers instead.


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## FioBi

The theft of fuel from farmers would skyrocket if criminals knew that ordinary diesal was available to them in large quantities on farms.

That said I still think that green diesal should probably be abolished. Because they are getting a rebate farmers should be able to afford better security.


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## celebtastic

Fully agreed it should be abolished - with no rebate. Food prices and subsidies are too high as it is.

Farmers will always have the poor mouth on them


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## shigllgetcha

completely useless if it red isnt abolished up north at the same time but i agree with the idea


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## jhegarty

jpd said:


> Why not make farmers pay the full cost of the fuel. This will undoubtedly raise food prices for Irish grown food, but the money saved on the green diesel could be given out to all food buyers instead.



And Irish exports to the UK where they compete against farmers who do have cheap diesel ?


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## Woodie

celebtastic said:


> Fully agreed it should be abolished - with no rebate. Food prices and subsidies are too high as it is.
> 
> Farmers will always have the poor mouth on them



Sorry, you are not making sense here.  You are stating that food prices and subsidies are both too high as it is and recommend abolishing both including the mechanism that is designed to keep prices lower.  
I am quite sure that many farmers would be happy for market forces to come into play where a fair price was paid for their product.  The system in place was designed to ensure supply at a rate that people could afford.  Anyone who knows anything about  farming knows that many farmers are paid less than production prices for food and it is only the subsidy that sustains the system - quite a valid reason to "have the poor mouth" when they want to run a profitable business.  
So by all means abolish the subsidies but be prepared to pay a fair price which will meaning paying a lot more - without having the "poor mouth on" of course.


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## Purple

Woodie said:


> Sorry, you are not making sense here.  You are stating that food prices and subsidies are both too high as it is and recommend abolishing both including the mechanism that is designed to keep prices lower.
> I am quite sure that many farmers would be happy for market forces to come into play where a fair price was paid for their product.  The system in place was designed to ensure supply at a rate that people could afford.  Anyone who knows anything about  farming knows that many farmers are paid less than production prices for food and it is only the subsidy that sustains the system - quite a valid reason to "have the poor mouth" when they want to run a profitable business.
> So by all means abolish the subsidies but be prepared to pay a fair price which will meaning paying a lot more - without having the "poor mouth on" of course.



We would have to remove the trade barriers that help keep the poorest people in the world trapped in poverty as part of the process but there's no way farmers would accept an open and level playing field, even though, in the long run, they might be better off.


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## Woodie

Purple said:


> We would have to remove the trade barriers that help keep the poorest people in the world trapped in poverty as part of the process but there's no way farmers would accept an open and level playing field, even though, in the long run, they might be better off.



Fair point.  Whilst there has been a lot done to improve trade, more can be done.  But looking at how sugar was managed it does not breath confidence.  It only illustrates the nonsense of making sweeping loaded statements about singular issues such as green diesel when there are a lot of complex issues at play here.


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## SarahMc

Excuse my ignorance on this, but how does this work, and is the black market internal or mostly cross border?


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## bullbars

Purple said:


> We would have to remove the trade barriers that help keep the poorest people in the world trapped in poverty as part of the process but there's no way farmers would accept an open and level playing field, even though, in the long run, they might be better off.



Yes but to level the playing field Irish farmers must also be permitted to use the same practices as those in other countries which would be to the detriment of the ecosystems and the food we consume. 
The regulations that are adhered to are a huge cost to production.
Brazilian beef being a case in point; it's a hugely unregulated market, Irish beef's traceable "farm-to-fork" system is a huge selling point on the international market.
The Nitrates directive and disposal of carcass' would have to be leveled with competing markets.
Emissions regulations and the use of Adblue would have to be removed also.

I think the claim back system would expand the diesel black market. As present to wash green diesel there is a significant investment required to set up the plant. If a claim back system was introduced, all that is required is storage, which is extremely easy to set up and conceal. Every farm countrywide would have the capacity to set this up and would be a farce to police. Another quango is not what is needed.


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## Woodsman

Just to clarify a few misconceptions re green diesel. It was introduced to help farmers at a time when they desperately needed it. They could probably get by as Brendan suggested without it nowadays but do you want tractors in O'Connel st again? Seriously though, tractors use app the same amount of diesel as lorries ie. 6/10mpg. Lorries use normal diesel and the cost of this also impacts on food prices. 
Re security, it costs app €1500 to purchase a second hand lorry container and store fuel tanks in that. They can then be made vandal and thief proof. Many farmers and haulage contractors do this. 

Farm subsidies are actually a subsidy to the consumer as food is sold nowadays at cost of production. Most commercial farmers make almost no profit but exist on the single farm payment. The diesel subsidy is significant in keeping food prices affordable but I agree it should be in the form of a rebate. Re the price of food. This has never been cheaper and food now  constitutes app 10% of average working class household income. A century  ago this figure was 70%. 
And finally, have you never been stopped by the customs officers at a road block. They check your engine and if you are driving a diesel car or lorry or jeep on green diesel they normally confiscate it. The fines are also penal. If you are lucky you get a first offenders fine of €1000. They also dip tanks etc at cattle marts and other similar venues.


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## Gerard123

(On a point of fact, there is not a subsidy on green diesel. The truth is that this type of diesel is not subject to the same very high levels of taxes and VAT that other fuel types are, which makes green diesel less expensive. There is actually no subsidy in the proper sense.)

Where do the people who convert the green to white diesel get their supplies from? Is there not a simplier solution - focus on the sellers of the green diesel and where that goes? Would be much easier to 'police' the suppliers than hundreds of thousands of farmers and other buyers of lower rebate diesel. Make the suppliers more responsible, keep proper books and records, reconcile volumes in and out - they have to keep VAT records which does something very similar on other supplies. Audit the suppliers. If suppliers see unusual trends, eg massive volumes of green diesel going to a small outlet, a possible warning sign?? Any solution would need to be an all Ireland one, otherwise wouldn't work. 

I agree in theory with the argument to eliminate subsidies but only if the price paid to farmers fairly reflects the costs, however in practice I doubt that will happen. Subsidies paid to MOST farmers are simply to ensure that consumers get cheaper food so in effect are a subsidy to the consumer. They were introduced at a time of real concern that food supplies would not be adaquate to feed the worlds population and to ensure food supply, quality, reliability and security of supply. They also allow food producers to compete with lower cost food from other regions which are not subject to the same standards of food production. If farmers were paid a proper price for their produce, allowing a reasonable profit margin, and a proper market existed, then there would not be a need for any subsidies. Alas, it doesn't work like that.


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## T McGibney

Gerard123 said:


> Where do the people who convert the green to white diesel get their supplies from? Is there not a simplier solution - focus on the sellers of the green diesel and where that goes? Would be much easier to 'police' the suppliers than hundreds of thousands of farmers and other buyers of lower rebate diesel. Make the suppliers more responsible, keep proper books and records, reconcile volumes in and out - they have to keep VAT records which does something very similar on other supplies. Audit the suppliers. If suppliers see unusual trends, eg massive volumes of green diesel going to a small outlet, a possible warning sign?? Any solution would need to be an all Ireland one, otherwise wouldn't work.



The new Revenue ROM system aims to do exactly this.

http://mcgibney.ie/2013/01/23/taxmans-big-brother-plan-to-tackle-fuel-criminals/


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## bullbars

Gerard123 said:


> Subsidies paid to MOST farmers are simply to ensure that consumers get cheaper food so in effect are a subsidy to the consumer. They were introduced at a time of real concern that food supplies would not be adaquate to feed the worlds population and to ensure food supply, quality, reliability and security of supply. They also allow food producers to compete with lower cost food from other regions which are not subject to the same standards of food production. If farmers were paid a proper price for their produce, allowing a reasonable profit margin, and a proper market existed, then there would not be a need for any subsidies. Alas, it doesn't work like that.


Agree, well put. Recent weather has really put farmers on the back foot and it has still not abated yet we have witnessed no spikes in food price which would have ordinarily occurred due to increased housing and feed costs.


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