Carbon Taxes EU
Germany: Environmental Tax
Reform: Carbon
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German ETR: Five modest steps - first-time inclusion of
electricity - road fuel tax increase biggest item
Gasoline and diesel tax (already 50 cents per liter before the new laws):
Annual increase of 3 Eurocents per Liter (for consumers, 3,5 cents incl.
VAT, or 16 Eurocents per Gallon).
Electricity tax (first time in history): Annual increase of 2,6 Eurocents per
kWh (3,2 Eurocents incl. VAT).
For electricity, gas and diesel: five price hikes from 1999 to 2003.
For light heating oil and natural gas, small tax increase only for 1999.
Industrial users pay only 60% of the normal rates for electricity, heating oil
and natural gas. Similar exemptions for agriculture and rail traffic.
Additional exemption for energy-intensive industries ( was recently put in
question by European Commission but finally accepted for next ten
years).
Revenue from ecotaxes will add up to about 17 billion Euro in 2003
www.eco-tax.info Green Budget Reform: Lessons from Germany and Western Europe
To prevent German industry from competitive
disadvantages and for ecological and social reasons there
are some exemptions. Here are the most important:
- Reduced rate of 20% (since 2003: 60%) for the manufacturing sector
and forestry and agriculture, on condition that the basic amount of
€511 per energy source (based on electricity and heating fuels) is
exeeded.
• Tax cap for manufacturing industry: as long as burden from
increased tax rates is 1.2 times greater than the tax relief from the
reduction in pension contributions, companies will be refunded 95%
of the differential amount.
• Public Transport enjoys a 50% reduced tax rate.
• Combined heat and power plants with a utilisation rate of 70% or
more are fully exempt from the existing mineral oil tax.
• Highly efficient gas-steam power plants will have full exemption from
the mineral oil tax as long as the fulfill certain conditions.
• Electricity from renewable sources intended for the producer's own
use is exempt from the electricity tax.
German eco-tax creates jobs in
renewable energy sector
Förderverein Ökologische Steuerreform
(FÖS)
Environmental Effects of Ecotax Reform
in Germany
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Petrol consumption in first half of 2001 decreased by 12% compared to
1999, by 8% compared to 2000. Diesel consumption decreased by
2% in first half of 2001 compared to 1999.
Car-pool agencies reported a 25% growth in first half of 2000.
Environmentally sound gas-powered cars, three-litre consuming cars
(90 miles per gallon), and renewable energies are booming.
Development of one-litre car (=280 miles per gallon) is near.
Number of rail passengers increased by 2% in 2000.
Germany world leader in wind energy, also in export of technology.
German Economics Research Institute (DIW) predicts 2-3% reduction
in CO2 by 2005 as result of ecotax reform.
GERMANY'S ECOLOGICAL TAX REFORM (B)
Source: German Federal Ministry of the Environment,
/www.bmu.de/english/fset1024.php
www.eco-tax.info Green Budet Reform : Lessos from Germany and Westonern Europe
UK: Climate Change Levy
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Started April 1, 2002
Only for industry and public sector
Taxes electricity, gas, and coal
Expected to reduce the carbon dioxide emission
from the UK by 10% in 2010 for those sectors
included in the reform.
• First post-assessment showed that British
industry cut carbon dioxide releases into the
atmosphere by 13.5 million tons in 2002, almost
three times above target
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Environmental Fiscal Reform:Perspectives for Progress in the European Union
AUTHOR: Christian Ege Jørgensen for the European Environmental Bureau
The Netherlands
• Cost of domestic electric and gas up 50%70% due to new taxes.
• Consumers use 15% less electric and 5%10% less fuel.
• High demand for renewable sources of
energy as they are expempt from tax.
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Environmental Fiscal Reform:Perspectives for Progress in the European Union
AUTHOR: Christian Ege Jørgensen for the European Environmental Bureau
Denmark's Carbon Dioxide Tax.
• Introduced in 1992
• The charges are twice as high for households
as for businesses: $14.30 per ton of CO2 vs.
$7.15.
• Denmark offers refunds to energy intensive
businesses.
*For industries where the tax
amounts to more than 3 percent of the value
added, a total tax refund is possible.
– permits such refunds only if "reasonable" energy
efficiency investments are undertaken.
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David Morris 1994
Emissions credits for Industry
• Emissions that exceed the emitter’s quota incurs
a penalty of 40 Euro per ton CO2, rising to 100
Euro from 2007.
• Allocation of emission credits will be free of
charge
• Size will be according to historical emissions
• Could lose its ability to reduce emissions if EU
Member States buy large amounts of emission
rights from Russia and Ukraine
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Environmental Fiscal Reform:Perspectives for Progress in the European Union
AUTHOR: Christian Ege Jørgensen for the European Environmental Bureau