Environmental tax statistics

Data extracted in January 2018. Most recent data: Further Eurostat information, Main tables and Database. Planned article update: January 2019.
Table 1: Total environmental tax revenue by type of tax, EU-28, 2016
Source: Eurostat (env_ac_tax)
Figure 1: Total environmental tax revenue by type of tax, EU-28, 2002–16
(billion EUR)
Source: Eurostat (env_ac_tax)
Figure 2: Total environmental tax revenue, EU-28, 2002–16
(%)
Source: Eurostat (env_ac_tax)
Figure 3: Total environmental tax revenue, 2016
(%)
Source: Eurostat (env_ac_tax)
Figure 4: Environmental taxes by tax category, 2016
(% of total environmental taxes)
Source: Eurostat (env_ac_tax)
Figure 5: Energy taxes by economic activity, 2015
(% of energy tax revenue)
Source: Eurostat (env_ac_taxind2)
Figure 6: Transport taxes by economic activity, 2015
(% of transport tax revenue)
Source: Eurostat (env_ac_taxind2)
Figure 7: Implicit tax rate on energy
(deflated), EU-28, 2002–16
(EUR per tonne of oil equivalent)
Source: Eurostat (tsdcc360)

This article provides an overview of results of the most recent data collection on environmental taxes in the European Union (EU). According to Regulation (EU) N° 691/2011 on European environmental economic accounts, an environmental tax is a tax whose tax base is a physical unit (or a proxy of it) of something that has a proven, specific negative impact on the environment and which is defined in the European system of accounts (ESA 2010) as a tax. European statistics distinguish four different categories of environmental taxes relating to energy, transport, pollution and resources; value added tax (VAT) is excluded from the scope of environmental taxes.

Environmental taxes have been increasingly used to influence the behaviour of economic operators, whether producers or consumers. These taxes also generate revenue that can potentially be used by government to increase its expenditure on environmental protection or efficient management of natural resources.

Main statistical findings

Environmental taxes in the EU

In 2016, the total environmental tax revenue in the EU-28 (i.e., revenue from environmental taxes collected by governments in all EU Member States) amounted to EUR 364.4 billion; this figure represents 2.4 % of the EU-28 gross domestic product (GDP) and 6.3 % of the total government revenues from taxes and social contributions in the EU (see Table 1).

From 2002 to 2016, the total environmental tax revenue in the EU increased by 2.3 % per year (at current prices) on average whereas GDP at market prices rose at an annual average of 2.6 %. In 2016, the level of the total environmental tax revenue in the EU was around EUR 100 billion higher than in 2002 (see Figure 1). However, the financial and economic crisis caused a severe contraction in economic activity in the EU, leading to lower government revenue also from environmental taxes in 2008 and 2009. From 2010 onwards, environmental tax revenues have continued to grow.

Figure 2 presents the evolution of the level of EU-28 environmental tax revenues relative to GDP and to the total government revenues from taxes and social contributions [1]. After remaining relatively stable between 2002 and 2004, the environmental tax revenue-to-GDP ratio decreased over the subsequent years (to 2.3 % in 2009), mainly due to a slower pace of the growth of environmental tax revenue compared to the EU’s overall economic growth. Only in 2009 a slight increase was observed in the ratio, caused by a considerable fall of GDP, which was larger than the contraction observed in the same year for environmental tax revenue (-4.6 % compared to -2.35 %). After 2009, the environmental tax revenue grew broadly at the same pace as GDP so that the ratio remained quite stable (at the level of around 2.4 %). Environmental tax revenues as a share of total government revenues from taxes and social contributions decreased from 6.8 % to 6.0 % between 2002 and 2008. After a recovery in 2009, the ratio has remained unchanged over the recent years, at the level of 6.3-6.4 %.

When comparing the level of environmental taxation across European countries, differences should be interpreted with caution. For instance, low government revenue from environmental taxes could signal relatively low environmental tax rates in a given country, or could result from high tax rates that have had the effect of changing behavioural patterns of consumption of the related products or activities. On the other hand, higher levels of environmental tax revenue could be due to low tax rates that incentivise non-residents to purchase taxed products across a border (as is the case for petrol or diesel).

Figure 3 shows the 2016 environmental tax revenues by country both in relation to GDP and to the total government revenues from taxes and social contributions. Relative to GDP, the largest level of environmental tax revenue was recorded in 2016 in Denmark (4.0 %), followed by Slovenia (3.9 %), Greece (3.8 %), Latvia (3.7 %), Croatia and Italy (both 3.5 %).The lowest environmental tax revenue in relation to a country’s GDP (below 2 %) were reported by six EU Member States (Lithuania, Germany, Spain, Ireland, Slovakia and Luxembourg).

Serbia stands out with its 2016 environmental tax revenue-to GDP ratio at 4.5 %, followed by Turkey (3.4 %). Out of the EFTA countries, Norway recorded in 2016 the largest level of the environmental tax revenue relative to GDP (2.4 %). For Switzerland and Iceland, the 2016 environmental tax revenue amounted to 1.7 % and 1.6 % of GDP.

The proportion of environmental taxes in total government revenues from taxes and social contributions also varied significantly across the EU Member States. Latvia had the largest share in the EU (at 11.7 %), slightly ahead of Slovenia (10.6 %) . Four other EU Member States recorded a share of at least 9 %: Greece (9.8 %), Bulgaria (9.6 %), Croatia (9.3 %) and Romania (9.0 %).

At the opposite end of the scale, Luxembourg (4.6 %), Germany (4.8 %), France (4.9 %), Belgium (5.0 %) and Sweden (5.1 %) had the lowest shares of environmental taxes, followed by Spain (5.5 %), Slovakia and Austria (both 5.6 %).

The share of environmental taxes in total government revenues from taxes and social contributions recorded by Serbia (11.7 %) was at the same level as as for Latvia, the country with the largest share in the EU. Environmental tax revenue collected in 2016 in Norway and Switzerland accounted for 6.2 % of the total government revenues from taxes and social contributions whilst for Iceland the equivalent share was relatively low (at 3.2 %).

Environmental taxes by category

Energy taxes (which include taxes on transport fuels) represented by far the highest share of overall environmental tax revenue, accounting for 76.9 % of the EU-28 total in 2016 (see Figure 4). Energy taxes were particularly prominent in the Czech Republic, Luxembourg and Lithuania, where they accounted for more than nine tenths of total environmental tax revenues. By contrast, energy taxes slightly exceeded 50 % of the revenues from environmental taxes in Malta (52.2 %), and accounted only for 55-56 % of the total in Denmark (55.4 %) and in the Netherlands (56.3 %).

The 2016 data on breakdown of the environmental tax revenue by category are available for three EFTA countries as well as for Serbia and Turkey. For EFTA countries, the share of energy tax revenue ranged from 55.2 % in Norway to 63.1 % in Iceland. For Serbia, energy taxes accounted in 2016 for 84.8 % and for Turkey 65.3 % of the total environmental tax revenue.

Transport taxes represented the second most important contribution to total environmental tax revenues, with 19.7 % of the EU-28 total in 2016. Their relative significance was considerably higher in Malta (40.8 %), Denmark (39.5 %), Ireland (37.8 %) and Austria (36.0 %). On the other hand, in some EU Member States the share of transport taxes in total revenues from environmental taxes was well below the EU average, with the lowest shares recorded in Estonia (1.9 %), Lithuania (4.5 %), the Czech Republic (6.4 %), and in Luxembourg (7.3 %).

In the non-EU countries, for which 2016 data are available, the share of transport taxes ranged from 6.6 % in Serbia to 39.8 % in Switzerland and 40.3 % in Norway.

Pollution and resource taxes represented a relatively small share (3.4 %) of total environmental tax revenues in the EU-28 in 2016. This category of environmental taxes groups a variety of taxes levied e.g. on waste, water pollution and abstraction. In many European countries such taxes were introduced more recently than energy or transport taxes. As yet, no taxes of this category have been levied in Greece and in Germany, whilst in Cyprus, Romania, Croatia, the Czech Republic, and Portugal only marginal amounts of the pollution and resource taxes were recorded. In two EU Member States, Hungary (14.0 %), and the Netherlands (13.6 %), however, pollution and resource taxes are a relatively important source of environmental tax revenue.

With 9.5 % of the total environmental taxes, Iceland recorded in 2016 the highest share of pollution and resource taxes among non-EU countries for which the 2016 data are available.

Environmental taxes by economic activity

In the EU, businesses paid a little more than half (52 %) of all energy tax revenue collected by governments in 2015. The contribution of households, albeit lower, was also significant (at 46 % in 2015). The remainder (2 %) relates to the amounts on average paid by non-residents or that could not be allocated to a specific group of payers. Among the EU Member States, Luxembourg stands out with the largest share of the energy tax revenue (at 60 %) collected from non-residents, largely due to non-resident purchases of petrol and diesel. In Malta this share is also substantial (at 45 %).

In 2015, the share of energy taxes payable by households in Cyprus (65 %) and Slovenia (62 % ), France and Denmark (both at 57 %) and the Netherlands (55 %) was considerably higher than the EU-28 (weighted) average of 46 % (see Figure 5). On the other hand, households' contribution to energy tax revenue was relatively low in Luxembourg (8 %) and Malta (14 %). The share of energy tax revenues levied on industry, construction and services other than transportation and storage amounted to 37 % for the EU-28 as a whole (see Figure 5), ranging from 12 % in Croatia to 51 % in the United Kingdom and Romania. The third most important contribution to the EU-28 energy tax revenue (12 %) originated from transportation and storage activities. In some Member States, this activity contributed to more than a quarter of total energy tax revenue: Croatia (46 %), Estonia (38 %), Slovakia (29 %), Bulgaria (27 %), and Romania (26 %). The contribution of agriculture, forestry and fishing to the total energy taxes accounted for less than 3 % for the EU-28, ranging from below 1 % in Luxembourg, Slovenia, Belgium, Cyprus and Malta to above 6 % in Croatia, Lithuania, Hungary and Greece and even to more than 7 % in Latvia.

The energy taxes payable by businesses were also relatively high in 2015 in Turkey, 75.9 % of all energy tax revenues. In Switzerland, non-residents contributed to 13.2 % of the total energy tax revenues.

On average among the EU Member States, the share of transport taxes paid by households was much higher (66 %) than the share paid by businesses (31 %) (see Figure 6). This is because in most EU Member States households pay a larger share of the motor vehicle tax revenues (an important component of transport tax revenue) than businesses. However, in some Member States a structure of transport tax revenue by payer considerably differs, with households contributing marginally to transport tax revenues in Slovakia and the Czech Republic.

At 66 %, businesses contributed a much higher share to the total transport tax revenue than households in Serbia in 2015. Switzerland stands out in 2015 with the largest share of transport taxes paid by non-residents, 12.2 %.

Implicit tax rate on energy

The implicit tax rate on energy is defined as the ratio of energy tax revenues to final energy consumption calculated for a calendar year. Energy tax revenues are measured in constant price euros (deflated with the implicit GDP deflator, prices of year 2010) and final energy consumption is measured in tonnes of oil equivalent (toe); as such the implicit tax rate on energy is expressed in terms of euros per tonne of oil equivalent (EUR per toe). The implicit tax rate on energy is not influenced by the size of the tax base and provides a measure of the effective level of energy taxation. From 2002 to 2016, the implicit tax rate on energy grew by 18 % in real terms (in other words, after deflating the energy tax revenue), changing from EUR 198.3 per toe to EUR 234.8 per toe. Between 2002 and 2008, the implicit tax rate on energy decreased. Since 2008, strong annual increases have been observed except in 2010 and in 2015. This movement reflects the fact that energy use is more and more costly in terms of the amount of tax that is levied for each unit consumed.

Data sources and availability

Using Table 9 from the ESA transmission programme, Eurostat gathers data on environmental taxes for four categories (energy, transport, pollution and resources); the data are then validated and published.

Eurostat also collects data on environmental taxes at a more detailed level, by economic activity. This annual collection of data has been carried out since 2013 under Regulation (EU) N° 691/2011 on European environmental economic accounts. The Eurostat publication titled ‘Environmental taxes — a statistical guide’ constitutes the methodological basis for this data collection.

Data relating to environmental taxes can be used to analyse the revenue stream from such taxes and to provide a relative measure of the importance of these taxes through the calculation of ratios relative to GDP or to the total revenue from all taxes and social contributions. In the first case (ratio relative to GDP), the comparison helps to provide an understanding of the tax burden. In the second case, the comparison helps to assess whether or not there is a shift towards environmental taxes, in other words, shifting the tax burden from other tax bases (for example, labour income) towards environmental taxes. It has to be noted that the total revenue of taxes and social contributions used to compute the ratio does not include imputed social contributions. For further information concerning various tax aggregates, see 'Main national accounts tax aggregates'.

Environmental tax revenue can also be allocated according to the different economic activities paying the taxes. Eurostat collects data on environmental taxes using a categorisation by economic activity (based on the NACE Rev. 2 classification supplemented by information for households, non-residents and a residual category for taxes that could not be allocated).

Increasing revenues from environmental taxes should be interpreted with caution. The increases may be caused by the introduction of new taxes or an increase in tax rates, or alternatively may be linked to an increase in the tax base caused, for instance, by a higher consumption of energy products.

Satellite accounts are a set of accounts that can be used to supplement national accounts; they exist or are in the process of being developed in a range of areas (for example, health accounts, tourism accounts or environmental accounts). An important feature of satellite accounts is that the basic concepts and classifications of the national accounts framework are retained. Regulation (EU) No 691/2011 on environmental economic accounts was adopted on 6 July 2011 and amended in April 2014; this made the collection and delivery of data on environmental taxes obligatory from 2013 onwards. The Regulation provides a framework for the development of various types of environmental accounts (also referred to as modules). Environmental taxes by economic activity is one of the six modules included in the Regulation (Annex II).

Context

Economic instruments for pollution control and natural resource management are an increasingly important part of environmental policy in the EU Member States. The range of instruments that are available includes, among others, environmental taxes, fees and charges, tradable permits, deposit-refund systems and subsidies.

Environmental taxes have been increasingly used to influence the behaviour of economic operators, whether producers or consumers. The EU has increasingly favoured these instruments because they provide a flexible and cost-effective means for reinforcing the polluter-pays principle and for reaching environmental policy objectives. The use of economic tools for the benefit of the environment is promoted in the EU Environment Action Programme to 2020 — 7th environment action programme (EAP), the EU sustainable development goals and the Europe 2020 strategy.

See also

Further Eurostat information

Publications

Main tables

Environmental tax revenues

Database

Environmental tax revenues (env_ac_tax)
Environmental taxes by economic activity (NACE Rev. 2) (env_ac_taxind2)

Dedicated section

Methodology / Metadata

Source data for tables, figures and maps (MS Excel)

Other information

External links


Notes

  1. excluding imputed social contributions