Environmental tax statistics
From Statistics Explained
- Data from February and March 2014. Most recent data: Further Eurostat information, Main tables and Database. Planned article update: March 2015.
This article provides an overview of environmental taxes in the European Union (EU). An environmental tax is one whose tax base is a physical unit (or a proxy of it) of something that has a proven, specific negative impact on the environment. European statistics distinguish four different types of environmental taxes relating to energy, transport, pollution and resources; note that value added tax (VAT) is excluded from the definitions employed in this article.
Environmental taxes have been increasingly used to influence the behaviour of economic operators, whether producers or consumers; these taxes generate revenue that can potentially be used to promote further environmental protection. Environmental taxes are analysed in more depth in another article.
- 1 Main statistical findings
- 2 Data sources and availability
- 3 Context
- 4 See also
- 5 Further Eurostat information
- 6 External links
Main statistical findings
Environmental taxes in the EU
Table 1 shows that the total revenue from environmental taxes in the EU-28 in 2012 was EUR 311 683 million; this figure equates to 2.4 % of gross domestic product (GDP) and to 6.1 % of the total revenues derived from all taxes and social contributions.
As can be seen in Figure 1, environmental tax revenue in the EU-28 increased during the period between 2002 and 2007 before the effects of the financial and economic crisis caused a reduction in economic activity, leading to falling tax revenues in 2008 and 2009. The decrease in revenues during the crisis only offset to some degree the general development of rising environmental tax revenues. In 2010, environmental tax revenues returned to an upward path. By 2012, the level of environmental tax revenues was some EUR 13.2 billion higher than at its previous peak in 2007.
While EU-28 environmental tax revenues increased in value terms between 2002 and 2007 and again in 2011 and 2012, the relation of these taxes to GDP and to the total revenue from all taxes and social contributions did not follow the same pattern (see Figure 2). Environmental tax revenues relative to GDP stayed almost constant between 2002 and 2003 and then decreased from 2003 to 2008 (as environmental tax revenues rose at a slower pace than overall economic growth). In 2009, there was an increase in the relative importance of environmental tax revenues relative to GDP after which there was little change, with a slight decrease in 2010 followed by modest increases in 2011 and 2012. Environmental tax revenues as a share of total revenue from taxes and social contributions decreased each year from 2003 to 2012 with the exception of 2009.
The level and rate of environmental taxation varies across European countries. Comparisons should be made with caution: for instance, low revenues from environmental taxes could signal relatively low environmental tax rates, or could result from higher tax rates that have had the effect of changing behavioural patterns among producers and consumers. Higher levels of environmental tax revenue could be due to low tax rates motivating non-residents to purchase taxed products in a specific country (for example, crossing a border to purchase petrol or diesel).
Figure 3 shows environmental tax revenues both in relation to GDP and in relation to total revenues from all taxes and social contributions. In 2012, Slovenia and Bulgaria had the highest shares of environmental taxes in total revenue from taxes and social contributions (10.2 % and 10.1 %). They were followed by the Netherlands (9.1 %), Malta and Croatia (both with 8.9 %). Turning to the indicator relative to GDP, Denmark headed the ranking, with environmental taxes equivalent to 3.9 % of GDP, followed by Slovenia (3.8 %) and the Netherlands (3.6 %). At the other end of the ranking, Spain, Lithuania and to a lesser extent Slovakia, France and Romania recorded relatively low levels of environmental tax revenue compared with GDP, as did Iceland.
Environmental taxes by type
Energy taxes (which include taxes on transport fuels) represented, by far, the highest share of overall environmental tax revenue — accounting for 75 % of the EU-28 total in 2012 (see Figure 4). These taxes were particularly prominent in Lithuania, Luxembourg and the Czech Republic, where they accounted for more than 90 % of environmental tax revenues. By contrast, energy taxes represented between 50 % and 55 % of the revenues from environmental taxes in Malta, Ireland, Croatia and the Netherlands, and 48 % in Norway.
Transport taxes made the second most important contribution to total revenues from environmental taxes, some 21 % of the EU-28 total in 2012. However, their relative significance was considerably higher in Malta (43 % of all revenues from environmental taxes), Denmark (37 %) and Ireland (36 %), as well as in Norway (48 %); the smallest shares of transport taxes in total revenues from environmental taxes (less than 4 %) were in Lithuania and Estonia.
Pollution and resource taxes represented a relatively small share (4 %) of total environmental tax revenues in the EU-28 in 2012. This pattern was repeated across most of the EU Member States, although Croatia (20 %) and the Netherlands (14 %) reported that much larger shares of total environmental tax revenue were raised from taxes on pollution and resources, as did Iceland (16 %). At most 1 % of environmental tax revenues were raised from pollution and resource taxes in Sweden, the Czech Republic, Italy, Austria, Luxembourg and Portugal, while Greece and Cyprus did not raise any revenue from this type of tax.
Environmental taxes by economic activity
Across those EU Member States for which 2011 data are available (see Figure 5), households paid an average of just under half (49 %) of all energy taxes that were collected by governments, while 49 % of the total was paid by businesses (in agriculture, forestry, fishing, industry, construction and services, including transportation and storage) and some 2 % by non-residents. Luxembourg stood out, insofar as 36 % of its energy tax revenues were paid by non-residents (largely due to non-residents purchasing petrol and diesel).
The contribution of agriculture, forestry and fishing to total energy taxes was at most 6 % of the total in all of the EU Member States (and Norway), aside from Lithuania (7 %) and Latvia (8 %). For most European countries industry, construction and services (excluding transportation activities) contributed between 20 % and 56 % of total energy taxes; with only Luxembourg below this range.
Generally the highest share of energy tax revenues from businesses came from the largest activity grouping shown in Figure 5 — namely, that covering industry, construction and services other than those related to transportation and storage. This was particularly true in Denmark, Slovenia, Greece, Luxembourg and Slovakia where these activities accounted for more than 80 % of all energy tax revenues from businesses, as was also the case in Turkey.
In all EU Member States except for Slovakia, Greece, Denmark and Slovenia, more than 20 % of energy tax revenues from businesses came from transportation and storage activities; this was also the case in Norway but not in Turkey. This activity’s share was particularly high in Estonia where 47 % of all energy tax revenues from businesses came from the transportation and storage sector and it was also high in Ireland, Spain, Belgium and Bulgaria, as the share of transportation and storage activities in energy tax revenues from businesses was over 40 %.
On average, 68 % of the transport tax revenues collected by governments in those EU Member States for which data are available (see Figure 6) were paid by households, 23 % by businesses (agriculture, forestry, fishing, industry, construction and services) other than those related to transportation and storage. The share paid by transport and storage was 6 %, while that paid by non-residents was negligible (0.5 %). The relative importance of households as contributors to transport tax revenues was the lowest in the Czech Republic and Lithuania.
Implicit tax rate on energy
The implicit tax rate on energy is defined as the ratio between energy tax revenues and final energy consumption calculated for a calendar year. Energy tax revenues are measured in euros (deflated with the final demand deflator) and the final energy consumption is measured in tonnes of oil equivalent; 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. Data show that in real terms (having deflated the energy tax revenue) taxation on energy followed a downward path in the period from 2003 to 2008 and that the fall was sharpest towards the end of that period (see Figure 7). However, during the financial and economic crisis, the indicator showed considerable variation: after a sharp increase in 2009 the implicit tax rate on energy for the EU-28 decreased quite sharply in 2010, dropping to a level similar to that shown between 2005 and 2007; in 2011, the rate bounced up to the highest level recorded for the period 2002–12 and then decreased somewhat in 2012 to a level slightly above that observed in 2009.
Data sources and availability
Using Table 9 from the ESA transmission programme, Eurostat gathers data on environmental taxes for four categories of environmental taxes (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. A Eurostat publication titled, ‘Environmental taxes — a statistical guide’ constitutes the methodological basis; this annual collection of data has been based so far on a gentlemen’s agreement.
Data relating to environmental taxes can be used to analyse the revenue stream from such taxes, as well as providing a relative measure of the importance of these taxes through the calculation of ratios relative to GDP or the total revenue from all taxes and social contributions. In the first case, 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 taxes (for example, on 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. 1.1 and NACE Rev. 2 classifications supplemented by information for households, non-residents and a category for not 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.
Satellite accounts are a set of accounts that can be used to supplement national accounts; they exist / 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 European environmental economic accounts was adopted on 6 July 2011; 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 are one of the three modules included in the Regulation (Annex II).
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 a Proposal for a new EU Environment Action Programme to 2020 — 7th environment action programme (EAP), the renewed EU sustainable development strategy and the Europe 2020 strategy.
Further Eurostat information
- Tax revenue statistics — government revenue from taxes and social contributions — Statistics in focus 4/2014
- Environmental taxes — detailed analysis — Statistics in focus 26/2013
- Environmental taxes account for 6.2 % of all revenues from taxes and social contributions in the EU-27 — Statistics in focus 53/2012
- Energy, transport and environment indicators — Pocketbook, 2013
- Environmental statistics and accounts in Europe — Statistical books, 2010
- Key figures on Europe — 2013 edition — Pocketbook, 2013
- Taxation trends in the European Union — Data for the EU Member States, Iceland and Norway, 2013
- Environmental tax revenues - % of total revenues from taxes and social contributions (ten00064)
- Environmental tax revenues - % of GDP (ten00065)
- 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)
Methodology / Metadata
- Environmental tax revenues (ESMS metadata file — env_ac_tax_esms)
- Environmental taxes by economic activity (NACE Rev. 2 and Rev. 1.1) (ESMS metadata file — env_ac_taxind_esms)
- Implicit tax rate on energy (ITR) (ESMS metadata file — tsdcc360_esmsip)
Source data for tables, figures and maps (MS Excel)
- Environmental tax reform in Europe: implications for income distribution, EEA Technical report No. 16/2011, Copenhagen
- Market-based instruments for environmental policy in Europe, EEA Technical report No. 8/2005, Copenhagen
- Regulation 691/2011 of 6 July 2011 on European environmental economic accounts
- European Commission — Environment — Policies
- European Commission — Energy — Energy policy for a competitive Europe
- European Commission — Mobility and Transport — Keeping Europe moving
- European Commission — Taxation and Customs Union
- OECD/EEA database on instruments used for environmental policy and natural resources management