One of the hot topics in the haulage industry at the moment is the planned introduction of a 'carbon energy tax' at the beginning of 2005. It could prove to be a tax too far for the Irish road haulage industry.

The planned introduction of a 'carbon energy tax' has split the Cabinet down the middle, if media reports are anything to go by. For differing reasons politicians are either for or against the proposed controversial tax.

In one corner Environment Minister Martin Cullen wants to introduce the tax in a bid to cut greenhouse gases. The taxes are designed to help Ireland meet its international commitments under the Kyoto Agreement to reduce greenhouse gases.

However, Finance Minister Charlie McCreevy and Tanaiste Mary Harney are worried the tax would damage the competitiveness of Irish industry and cause a public backlash.

At a Cabinet meeting on Wednesday (July 23), Ministers agreed to start a formal consultation process on the introduction of the controversial tax. The Cabinet agreed in principle to introduce the tax in the December 2004 Budget.

The price of diesel could rise by between 3 cent and 10 cent per litre if the tax is introduced in 2005, according to a consultation document released by the Government at the end of July.

The Government proposes to levy the tax at E25 per tonne for every tonne of carbon produced. This would yield the Government E635 million annually.

The consultation paper points out that the tax could be introduced at a lower rate of E7.50 per tonne, rising to E25 over the next few years. A base rate of E7.50 per tonne would add 2.9 cent per litre to the cost of diesel, rising to 9.3 cent per litre, when the tax is levied at E25 per tonne.

The principle behind the controversial tax is simple. By increasing taxation on combustible fuels such as diesel, petrol, home heating oil, coal, turf, gas etc, the Government hopes demand for these fuels would be reduced, with a consequent reduction in the emission of greenhouse gases.

While everybody wants to save the planet from global warming, issues closer to hand are occupying the minds of hauliers in Ireland right now. The last thing they need is another raft of taxation to undermine their already perilous plight.

Taxation is by no means the only tool at the disposal of the Government in tackling the greenhouse gas problem. However, it is the only revenue generating model in its locker, which makes it an obvious choice.

Recently the Society of the Irish Motor Industry (SIMI) called on the Government to introduce another scrappage scheme for cars of 10-years or over, which it claimed would give a major stimulus to the industry and would make a significant contribution towards reducing greenhouse gases.

SIMI chairman Michael Herbert said there would be definite benefits from introducing another scrappage scheme and described the previous scheme as "win-win-win situation for the environment, consumers, government and the industry."

The previous scheme ran from July 1995 until December 1997. Some 64,000 cars were scrapped during the scheme. The environment, according to Mr Herbert also benefited from the scheme because emission levels from car 10 years and older are 30 times more than from a new car."

There are a lot of merits in this suggestion. It would give the ailing motor industry a kick start and would make a significant contribution towards reducing greenhouse gas emissions.

Perhaps the scheme could be extended to remove all LCVs and HGVs of 10 years and over from the equation. This would stimulate another sector of the motor industry and make a contribution towards cleaning up the environment.

The Government could also consider replacing CIE's antiquated fleet of buses, which belch out noxious fumes at a rate of knots. All vehicles of five years and over could be replaced by buses running on Euro 3 engines, which is practically the norm in the road haulage industry nowadays.

The Irish Road Haulage Association has been vociferous in its condemnation of the proposed tax, claiming it has invested heavily in eco-friendly plant and equipment in the past seven years (since the introduction of the Euro 1 engine) and is continuing to play its part in cleaning up the environment through investment in new technology.

The same cannot be said for CIE, who despite huge subvention from the Government is lagging years behind, the haulage industry in terms of investment in plant and equipment.

The private bus sector cannot be absolved from blame in this respect. There are far too many buses, that were registered in the early 1980s, meandering around Ireland's road network. Ironically many of these buses are contracted to CIE to ferry school children to and from the classroom.

The road haulage industry has led the way in modernising its fleet over the last decade. Certainly some members of the haulage community still have a journey to travel in this respect. Nevertheless significant strides have been made at a huge cost to the industry.

It is now time for the Government to turn its attention to other road transport users, and ask the question: Have they made the effort to get their house in order? We all know the answer to that particular question.