Environmental tax statistics

Data extracted in March 2017. Most recent data: Further Eurostat information, Main tables and Database. Planned article update: April 2018.
Table 1: Total environmental tax revenue by type of tax, EU-28, 2015
Source: Eurostat (env_ac_tax)
Figure 1: Total environmental tax revenue by type of tax, EU-28, 2002–15
(billion EUR)
Source: Eurostat (env_ac_tax)
Figure 2: Total environmental tax revenue, EU-28, 2002–15
(%)
Source: Eurostat (env_ac_tax)
Figure 3: Total environmental tax revenue, 2015
(%)
Source: Eurostat (env_ac_tax)
Figure 4: Environmental taxes by tax category, 2015
(% of total environmental taxes)
Source: Eurostat (env_ac_tax)
Figure 5: Energy taxes by economic activity, 2014
(% of energy tax revenue)
Source: Eurostat (env_ac_taxind2)
Figure 6: Transport taxes by economic activity, 2014
(% of transport tax revenue)
Source: Eurostat (env_ac_taxind2)
Figure 7: Implicit tax rate on energy
(deflated), EU-28, 2002–15
(EUR per tonne of oil equivalent)
Source: Eurostat (tsdcc360)

This article provides an overview of 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 to promote further environmental protection.

Main statistical findings

Environmental taxes in the EU

The total government revenue from environmental taxes in the EU-28 in 2015 amounted to EUR 359.3 billion; this figure represents 2.4 % of the EU-28 gross domestic product (GDP) and 6.3 % of the total government revenues from compulsory levies (see Table 1).

From 2002 to 2015, the total environmental tax revenue in the EU increased by 2.4 % per year (at current prices) on average whereas GDP at market prices rose at an annual average of 2.7%. In 2015, the level of environmental tax revenues was some EUR 95 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 tax revenue in 2008 and 2009. In 2010, environmental tax revenues returned to an upward path.

Figure 2 presents the evolution of the level of EU-28 environmental tax revenues relative to GDP and to the total revenue from all taxes and social contributions (excluding imputed social contributions). From 2002 to 2008, environmental tax revenues rose at a slower pace than overall economic growth, and for this reason the ratio of EU-28 environmental tax revenue to GDP decreased from 2.5 % to 2.3 %. In 2009, the ratio increased again due to a fall of GDP which was more pronounced than the one observed for environmental tax revenue (-5.8 % compared with -2.7 %). After 2009, the environmental tax revenues relative to GDP remained quite stable, at around 2.4 % to 2.5 %. Environmental tax revenues as a share of total revenue 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 analysed with caution. For instance, low revenues from environmental taxes could signal relatively low environmental tax rates, 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 2015 environmental tax revenues both in relation to GDP and to total revenues from all taxes and social contributions by country. Relative to GDP, in 2015 environmental tax revenues in the EU reached the highest value in Croatia (4.1 %), followed by Denmark with a ratio of 4.0 %, Slovenia (3.9 %) and Greece (3.7 %). The lowest ratios of environmental tax revenues to GDP (below 2 %) were recorded in six EU Member States (Slovakia, Lithuania, Luxembourg, Spain, Ireland and Germany).

Figure 3 presents also the 2015 environmental taxes-to-GDP ratios for Serbia (4.2 %), Norway (2.4 %) and Iceland (1.7 %). Data on the 2015 ratios for other candidate and EFTA countries are not yet available

The proportion of environmental taxes in total revenues from taxes and social contributions also varied significantly across the European countries. Croatia had the largest share in the EU (at 10.9 %) slightly ahead of three other EU Member States with a share of at least 10 %: Slovenia (10.6 %), Greece (10.3 %) and Bulgaria (10.0 %). Four other EU Member States recorded a share of at least 9 %: Latvia (9.3 %), Malta (9.1 %), Cyprus and the Netherlands (both 9.0 %).

At the opposite end of the scale, Belgium (4.7 %) and France (4.8 %) had the lowest shares of environmental taxes, followed by Luxembourg (4.9 %), Germany (5.0 %) and Sweden (5.1 %).

In 2015, the proportion of environmental taxes in government revenue from compulsory levies recorded by Serbia (11.0 %) was marginally higher than in any EU Member State. Environmental tax revenue collected in 2015 in Norway accounted for 6.1 % of the total taxes and social contributions whilst for Iceland the equivalent share was relatively low (at 4.8 %).

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 76.7 % [1] of the EU-28 total in 2015 (see Figure 4). Energy taxes were particularly prominent in the Czech Republic, Lithuania, Luxembourg and Romania, 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 (51.3 %), and accounted only for 55-56 % of the total in Norway (55.4 %), Denmark (55.5 %) and the Netherlands (55.9 %).

Transport taxes represented the second most important contribution to total environmental tax revenues, with 19.8 % of the EU-28 total in 2015. Their relative significance was considerably higher in Austria (35.5 % of all revenues from environmental taxes), Ireland (38 %) and Denmark (38.7 %) and even more so in Malta (40.3 %) and Norway (40.6 %). The smallest shares of transport taxes in total revenues from environmental taxes were in Estonia (2.2 %) and in Lithuania (2.5 %).

Pollution and resource taxes represented a relatively small share (3.5 %) of total environmental tax revenues in the EU-28 in 2015. 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. However, a much higher share for pollution and resource taxes was observed in Croatia (16.9 %), and in the Netherlands (13.7 %). By contrast, in Greece no taxes of this category have been levied and in Germany, Cyprus and Romania marginal amounts of the pollution and resource taxes were recorded.

Environmental taxes by economic activity

Across the EU Member States, businesses paid a little more than half (54 %) of all energy tax revenue collected by governments in 2014. The contribution of households, albeit lower, was also significant (at 44 % in 2014). The remainder (2 %) relates to the amounts 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 63 %) collected from non-residents largely due to non-resident purchases of petrol and diesel. In Malta this share is also substantial (at 41 %).

In 2014, the share of energy taxes paid by households in Cyprus and Slovenia (at 68 % for both), Denmark and the Netherlands (at 55 % both) was considerably higher than the EU-28 (weighted) average of 44 % (see Figure 5). On the other hand, the share of taxes borne by households was relative low in Luxembourg (7 %), Malta (15 %) and the Czech Republic (20 %). The share of energy tax revenues levied on industry, construction and services other than transportation and storage amounted to 38 % for the EU-28 as a whole (see Figure 5), ranging from 13 % in Luxembourg to 48-49 % in the United Kingdom, Czech Republic and Finland. The third most important contribution to energy tax revenue (13 % for EU-28) originated from transportation and storage activities. In some Member States this activity contributed to more than a quarter of total energy tax revenue: Croatia (42 %), Estonia (33 %), Slovakia (31 %), Bulgaria (28 %) and Poland (26 %). The contribution of agriculture, forestry and fishing to the total energy taxes accounted for less than 3 % for the EU-28, ranging from 0 % in Slovenia to 6 % in Bulgaria, Greece, Latvia and Hungary.

On average among the EU Member States, the share of transport taxes paid by households was much higher than the share paid by businesses: 68 % compared with 30 % (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 Lithuania, Slovakia and Czech Republic.

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 2015, the implicit tax rate on energy increased by 18 % in real terms (in other words, after deflating the energy tax revenue), changing from EUR 198.3 per toe to EUR 233.7 per toe. Between 2002 and 2008, the implicit tax rate on energy followed a slight downwards trend. 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 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.

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 makes 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)
Environmental taxes by economic activity (NACE Rev. 1.1) (env_ac_taxind)

Dedicated section

Methodology / Metadata

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

Other information

External links


Notes

  1. The value was rounded upwards to ensure that the shares of all categories of environmental taxes sum up to100%.