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Economic development and cohesion
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“Helping Europe’s policy-makers understand the impact of environmental tax reforms on industrial competitiveness”

The problem

With global warming now such a recognisable problem, many EU Member States have introduced environmental tax reforms as a way of reducing harmful emissions and energy usage. The idea is that industries faced with high green tax bills strive for more efficiency in their operations so as to minimise their negative impact on the environment. But how do these taxes affect industrial competitiveness? The answer to this question would aid policy-makers when setting green tax regulations.

COMETR  Gauging the impact of ‘green’ tax reforms on competitiveness


COMETR promises to provide a comprehensive sectoral analysis of Europe’s environmental tax reforms. It will use modelling techniques and case studies to examine green tax reforms that have taken place in the EU and Candidate Countries. The project will:

  • select five to eight industrial sub-sectors for comparison and study the impact of green tax reforms in Denmark, Finland, Germany, the Netherlands, Sweden, the UK, and one accession country
  • study world market conditions for the chosen sectors
  • compare short and long-term costs of environmental tax reform
  • examine other relevant environmental and business issues

Contribution to policy development:

  • COMETR’s findings could be valuable to policy-makers seeking to clarify the impact of green tax reforms
  • The results will help decision-makers find ways of reducing the impact such reforms have on industrial competitiveness
  • The comparative nature of the research will reveal how industries react to different tax approaches in different countries – useful information for those who draft future green tax policies

Project deliverables

  • Database for the case studies relating to the chosen countries and sectors – March 2005
  • Paper outlining environmental tax reforms and considerations in Member States – June 2005
  • Report analysing the effects of environmental tax reforms on sector-specific energy usage and carbon emissions – April 2006
  • Draft report including theory and description of models used and the results of simulations – May 2006
  • Final report – December 2006


  • Website, developed at start of project and constantly updated
  • Project details/articles to relevant European business and industry organisations – as required
  • Present project findings at specific conferences, such as the annual international conference on environmental taxation – as required
  • Draft of final report to economic and environmental ministries for review – December 2006


The final report of the COMETR project makes interesting reading particularly in the context of the Commission's recently published initiatives on measures to reduce greenhouse gas emissions and increasing renewable energy. The report draws a number of conclusions, for instance:

  • Carbon-energy taxes: energy-intensive industry faces a modest bill
  • Large energy-intensive companies in Europe benefit from far-reaching exemptions from the carbon-energy taxation introduced in member states

As a result of the COMETR project, it is now possible both to put figures on the real tax levels as well as to evaluate their significance for competitiveness in industrial sectors. Large energy-intensive companies in Europe benefit from far-reaching exemptions from the carbon-energy taxation introduced in member states. Competitiveness concerns as a rule underlie provision of special rebates to the biggest emitters. The size of the rebate and thereby the actual climate bill to companies are however difficult to unravel.

For more information see: 

Technical information

Project acronym: COMETR
Project’s official full title: Competitiveness effects of environmental tax reforms
Research priority: 3.1. Underpinning European integration, sustainable development, competitiveness and trade policies (including improved means to assess economic development and cohesion)
Specific webpage:
Proposal/contract no: 501993
Start date: 01/12/2004
Kick off meeting: 03/12/2004
Completion date: 30/11/2006
European Commission scientific officer: Ian Perry (

Name: National Environmental Research Institute
Abbreviated name: NERI
Address: Box 358,
Frederiksborgvej 399,
4000 Roskilde
Country: Denmark
Tel: +45 4630 1200
Fax: +45 4630 1114


Name: Cambridge Econometrics
Abbreviated name: CAMECON
Country: United Kingdom

Name: Policy Studies Institute
Abbreviated name: PSI
Country: United Kingdom

Name: Economic and Social Research Institute
Abbreviated name: ESRI
Country: Ireland

Name: Institute for Economic and Environmental Policy
Abbreviated name: IEEP
Country: Czech Republic

Name: The Vienna Institute for International Economic Studies
Abbreviated name: WIIW
Country: Austria