Boats hit by EU fuel ruling

The EU’s top court has ruled that Ireland has infringed EU legislation by allowing cheaper, marked fuel to be sold to the owners of yachts and other leisure craft when it should be restricted to commercial fishermen.

Following proceedings first initiated by the European Commission in 2013, the European Court of Justice issued a judgment that the system used by the Government to impose and collect excise on fuel used by leisure marine craft was incompatible with EU directives on energy taxation and the marking of fuels.

Under EU law, member states can apply lower excise on fuel used by fishing vessels using marked diesel, similar to that allowed for use by farmers.

However, the cheaper fuel is not meant to be available to sailors and boat users who use their vessels for recreational purposes.

The commission said it was apparent only a small minority of owners of pleasure craft actually submitted returns to pay the full rate of tax duty on diesel for their vessels.

It claimed the scale of the infringement was “far from negligible”.

Only 28 boat owners submitted declarations on their use of fuel in 2012, despite the fact there are an estimated 27,000 pleasure craft in Ireland.

The commission also claimed that allowing the sale of marked diesel for uses that were subject to the full rate of excise duty was “fundamentally incompatible” with EU legislation.

Officials said it was impossible to tell if the full or discounted rate of excise had been paid on marked fuel found in the tank of vessels.

The Irish authorities argued that it had concentrated on the illegal use of marked fuel in motor vehicles as its use in leisure craft only amounted to 1.3% of total oil consumption in Ireland.

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