Share of environmental taxes in total tax revenues in Europe

Despite the essential role of environmental taxation for the transition to a greener economy, the share of environmental taxes in total revenues from taxes and social contributions in the European Union decreased. This share has fallen from 6.3% in 2010 to 5.1% in 2023, the lowest level since 2010, setting the indicator outlook towards 2030 to be likely off track. The reasons for a decline vary, including: a shrinking tax base linked to electrification, structural changes in the economy, absence of tax indexations, and resistance to environmental taxes.

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Metadata
DPSIR Response
Typology Descriptive indicator (Type A - What is happening to the environment and to humans?)
UN SDGs SDG11: Sustainable cities and communities
Topics Sustainable finance
Temporal coverage { "readOnly": true, "temporal": [ { "label": "2010", "value": "2010" }, { "label": "2013", "value": "2013" }, { "label": "2014", "value": "2014" }, { "label": "2015", "value": "2015" }, { "label": "2016", "value": "2016" }, { "label": "2017", "value": "2017" }, { "label": "2018", "value": "2018" }, { "label": "2019", "value": "2019" }, { "label": "2020", "value": "2020" }, { "label": "2021", "value": "2021" }, { "label": "2022", "value": "2022" }, { "label": "2023", "value": "2023" } ] }
Geographic coverage { "readOnly": true, "geolocation": [ { "label": "Austria", "value": "geo-2782113" }, { "label": "Belgium", "value": "geo-2802361" }, { "label": "Bulgaria", "value": "geo-732800" }, { "label": "Croatia", "value": "geo-3202326" }, { "label": "Cyprus", "value": "geo-146669" }, { "label": "Czechia", "value": "geo-3077311" }, { "label": "Denmark", "value": "geo-2623032" }, { "label": "Estonia", "value": "geo-453733" }, { "label": "Finland", "value": "geo-660013" }, { "label": "France", "value": "geo-3017382" }, { "label": "Germany", "value": "geo-2921044" }, { "label": "Greece", "value": "geo-390903" }, { "label": "Hungary", "value": "geo-719819" }, { "label": "Ireland", "value": "geo-2963597" }, { "label": "Italy", "value": "geo-3175395" }, { "label": "Latvia", "value": "geo-458258" }, { "label": "Lithuania", "value": "geo-597427" }, { "label": "Luxembourg", "value": "geo-2960313" }, { "label": "Malta", "value": "geo-2562770" }, { "label": "Netherlands", "value": "geo-2750405" }, { "label": "Poland", "value": "geo-798544" }, { "label": "Portugal", "value": "geo-2264397" }, { "label": "Romania", "value": "geo-798549" }, { "label": "Slovakia", "value": "geo-3057568" }, { "label": "Slovenia", "value": "geo-3190538" }, { "label": "Spain", "value": "geo-2510769" }, { "label": "Sweden", "value": "geo-2661886" } ] }
Workflow
Content responsible Head of Group Daniel Montalvo
Layout
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Environmental tax revenues in the EU-27: in absolute numbers and as a share of total tax revenues including social contribution (TSC), 2010-2023" } ], "type": "h3-light" } ] } }, "blocks_layout": { "items": [ "5d2a26a0-cb2d-47b8-972c-dcb1e360d75e" ] } }, "id": "figure-metadata-b0279dde-1ceb-4137-a7f1-5ab7b46a782c", "styles": {} }, "284b147c-53d0-42af-93c7-7a951064ebc4": { "@type": "slate", "plaintext": "This suggests that the EU could increase environmental taxes as a share of total tax revenue by 2030, however this is increasingly uncertain. Environmental taxes as a share of total taxes have persistently declined and fell sharply in 2022 and 2023. It is unclear if and to what extent environmental taxes will rebound, or whether the expected revenue from the EU ETS will be sufficient to offset this drop in future.", "value": [ { "children": [ { "text": "This suggests that the EU could " }, { "children": [ { "text": "increase environmental taxes" } ], "type": "strong" }, { "text": " as a share of total tax revenue by 2030, however this is increasingly uncertain. Environmental taxes as a share of total taxes have persistently declined and fell sharply in 2022 and 2023. It is unclear if and to what extent environmental taxes will rebound, or whether the expected revenue from the EU ETS will be sufficient to offset this drop in future. " } ], "type": "p" } ] }, "2ae3f3e4-4c2a-4719-8b9f-cac5953f0c20": { "@type": "slate", "plaintext": "Energy and transport taxes combined accounted for 95% of total environmental tax revenue in 2023. Energy taxes, including carbon pricing revenues from the EU Emissions Trading System (EU ETS) , accounted for 76% of total environmental tax revenue, transport taxes for 19%, and pollution and resource tax revenues for 5%.", "value": [ { "children": [ { "text": "Energy and transport taxes combined accounted for 95% of total " }, { "children": [ { "text": "environmental tax revenue" } ], "type": "strong" }, { "text": " in 2023. Energy taxes, including carbon pricing revenues from the\u00a0" }, { "children": [ { "text": "EU Emissions Trading System (EU ETS)" }, { "children": [ { "text": "" } ], "data": { "extra": [], "footnote": "The EU ETS is not a tax, but a market-based environmental measure \u00a0designed with the prime objective to reduce carbon emissions and provide a financial incentive to polluters to reduce emissions. The carbon price is not fixed by a government, but determined by the market based on demand and supply fundamentals. Revenue raising is hence not the primary objective of the ETS. However, in Eurostat\u2019s statistics on environmental taxation, government revenues from the auctioning of emissions permits, such as those from the EU ETS, are classified as tax receipts in the national accounts. This is why this indicator accounts for them as tax revenues.", "label": "The EU ETS is not a tax, but a market-based environmental measure \u00a0designed with the prime objective to reduce carbon emissions and provide a financial incentive to polluters to reduce emissions. The carbon price is not fixed by a government, but determined by the market based on demand and supply fundamentals. Revenue raising is hence not the primary objective of the ETS. However, in Eurostat\u2019s statistics on environmental taxation, government revenues from the auctioning of emissions permits, such as those from the EU ETS, are classified as tax receipts in the national accounts. This is why this indicator accounts for them as tax revenues.", "uid": "sA8sS", "value": "The EU ETS is not a tax, but a market-based environmental measure \u00a0designed with the prime objective to reduce carbon emissions and provide a financial incentive to polluters to reduce emissions. The carbon price is not fixed by a government, but determined by the market based on demand and supply fundamentals. Revenue raising is hence not the primary objective of the ETS. However, in Eurostat\u2019s statistics on environmental taxation, government revenues from the auctioning of emissions permits, such as those from the EU ETS, are classified as tax receipts in the national accounts. This is why this indicator accounts for them as tax revenues." }, "type": "footnote" }, { "text": "" } ], "data": { "url": "https://climate.ec.europa.eu/eu-action/eu-emissions-trading-system-eu-ets_en" }, "type": "link" }, { "text": ", accounted for 76% of total environmental tax revenue, transport taxes for 19%, and pollution and resource tax revenues for 5%." } ], "type": "p" } ] }, "3792a022-696b-4e28-8865-ab8e16951558": { "@type": "slate", "plaintext": "Many EU Member States reduced excise taxes on petrol and diesel to alleviate the abnormal energy prices caused by the war in Ukraine. Therefore, 2022 was an exceptional year with unprecedented state interventions.", "value": [ { "children": [ { "text": "Many EU Member States reduced excise taxes on petrol and diesel to alleviate the abnormal energy prices caused by the war in Ukraine. Therefore, 2022 was an exceptional year with unprecedented state interventions." } ], "type": "p" } ] }, "43df8fab-b278-4b0e-a62c-ce6b8e0a881d": { "@type": "dividerBlock", "disableNewBlocks": true, "fitted": false, "fixed": true, "hidden": true, "readOnly": true, "readOnlySettings": true, "required": true, "section": false, "short": true, "spacing": "m", "styles": {} }, "5aaddfd5-08fe-43ae-9dfe-1466d1e0b26a": { "@type": "slate", "plaintext": "Environmental taxes encourage producers and consumers to pollute less and use resources more sustainably. Making polluters pay is at the core of EU environmental policy . Both the 8th Environment Action Programme and the European Green Deal acknowledge that environmental taxation is crucial for driving the transition to a greener, more sustainable economy.", "value": [ { "children": [ { "text": "Environmental taxes encourage producers and consumers to pollute less and use resources more sustainably. 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Both the " }, { "children": [ { "text": "8th Environment Action Programme" } ], "data": { "url": "https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32022D0591" }, "type": "link" }, { "text": " and the " }, { "children": [ { "text": "European Green Deal" } ], "data": { "url": "https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM%3A2019%3A640%3AFIN" }, "type": "link" }, { "text": " acknowledge that environmental taxation is crucial for driving the transition to a greener, more sustainable economy. " } ], "type": "p" } ] }, "62ba7407-8bcc-4121-9e60-ec8003145d06": { "@type": "slate", "plaintext": "Environmental tax revenues in Europe have fallen as the shift to renewables, electrification, energy efficiency gains and structural change have reduced the tax base. In some countries, decades without indexation and temporary energy price relief since 2021 have added to the decline .", "value": [ { "children": [ { "text": "Environmental tax revenues in Europe have " }, { "children": [ { "text": "fallen" } ], "type": "strong" }, { "text": " as the shift to renewables, electrification, energy efficiency gains and structural change have reduced the tax base. In some countries, decades without indexation and temporary energy price relief since 2021 " }, { "children": [ { "text": "have added to the decline" } ], "data": { "url": "https://op.europa.eu/en/publication-detail/-/publication/998524d7-4fe5-11f0-a9d0-01aa75ed71a1/language-en" }, "type": "link" }, { "text": ". " } ], "type": "p" } ] }, "9fa2c4a8-eee9-4f07-b48d-4eb7ce37e24c": { "@type": "slate", "plaintext": "The proposed revision of the Energy Taxation Directive aims to promote electrification, remove fossil fuel subsidies and align taxes with decarbonisation goals . The Clean Industrial Deal stresses that tax policies are vital for competitiveness, resilience and sustainability. Revenues from carbon pricing are expected to increase from 2027 with the start of the new Emissions Trading System (ETS2 ), but it is uncertain whether this is sufficient to reverse the persistent decline in environmental taxes.", "value": [ { "children": [ { "text": "The proposed revision of the " }, { "children": [ { "text": "Energy Taxation Directive" } ], "data": { "url": "https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:52021PC0563&from=EN" }, "type": "link" }, { "text": " aims to promote electrification, remove fossil fuel subsidies and align taxes with " }, { "children": [ { "text": "decarbonisation goals" } ], "type": "strong" }, { "text": ". The " }, { "children": [ { "text": "Clean Industrial Deal" } ], "data": { "url": "ttps://commission.europa.eu/document/download/f4718f39-19cc-42a4-9a9f-48acb824dc4f_en?filename=C_2025_4319_1_EN_ACT_part1_v6.pdf" }, "type": "link" }, { "text": " stresses that tax policies are vital for competitiveness, resilience and sustainability. Revenues from carbon pricing are expected to increase from 2027 with the start of the " }, { "children": [ { "text": "new Emissions Trading System (ETS2" } ], "data": { "url": "https://climate.ec.europa.eu/eu-action/carbon-markets/ets2-buildings-road-transport-and-additional-sectors_en" }, "type": "link" }, { "text": "), but it is uncertain whether this is sufficient to reverse the persistent decline in environmental taxes." } ], "type": "p" } ] }, "b0279dde-1ceb-4137-a7f1-5ab7b46a782c": { "@type": "embed_content", "disableNewBlocks": true, "fixed": true, "instructions": { "content-type": "text/html", "data": "<p>figure instructions goes here</p>", "encoding": "utf8" }, "readOnlySettings": true, "required": true, "url": "../../../../resolveuid/2c5340adae544bbd93822453072e6cc5" }, "ccdb607f-56e2-48e9-a046-b68ec2e24be1": { "@type": "slate", "plaintext": "In the long term, revenue from the EU ETS is also expected to reach a peak and then decline as more stringent GHG emission reduction requirements are introduced and drive down emissions. 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This share has fallen from 6.3% in 2010 to 5.1% in 2023, the lowest level since 2010, setting the indicator outlook towards 2030 to be likely off track. The reasons for a decline vary, including: a shrinking tax base linked to electrification, structural changes in the economy, absence of tax indexations, and resistance to environmental taxes. ", "readOnlySettings": true, "required": true, "value": [ { "children": [ { "text": "Despite the essential role of environmental taxation for the transition to a greener economy, the share of environmental taxes in total revenues from taxes and social contributions in the European Union decreased. This share has fallen from 6.3% in 2010 to 5.1% in 2023, the lowest level since 2010, setting the indicator outlook towards 2030 to be likely off track. 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Revenue from environmental taxes as a share (%) of total tax revenue, including social security contributions, by EU Member State, 2010 and 2023", "value": [ { "children": [ { "text": "Figure 2. Revenue from environmental taxes as a share (%) of total tax revenue, including social security contributions, by EU Member State, 2010 and 2023" } ], "type": "h3-light" } ] } }, "blocks_layout": { "items": [ "087106d9-f857-4fd4-8ba0-5d7c3624da24" ] } }, "id": "figure-metadata-02ba4a04-fcfe-4968-806f-1dac3119cfef", "styles": {} }, "43df8fab-b278-4b0e-a62c-ce6b8e0a881e": { "@type": "dividerBlock", "disableNewBlocks": true, "fitted": false, "fixed": true, "hidden": true, "readOnly": true, "readOnlySettings": true, "required": true, "section": false, "short": true, "spacing": "m", "styles": {} }, "d3d49723-14e5-4663-b346-37ee3572f28d": { "@type": "slate", "fixed": true, "instructions": { "content-type": "text/html", "data": "<p><br/></p>", "encoding": "utf8" }, "plaintext": "Trends in the share of total tax revenue accounted for by environmental taxes vary across the EU 27 Member States. Between 2010 and 2023, this share increased in only two Member States (Bulgaria and Greece). The largest increase, from 7.7% to 10.6%, occurred in Greece. The share declined in the remaining 25 Member States with the largest fall between 2010 and 2023 in Ireland (from 8.6% to 4.4%) followed by the Netherlands (from 9.7% to 7.3%). The lowest share was reported for Luxembourg at 3.1% in 2023.", "readOnlySettings": true, "required": true, "value": [ { "children": [ { "text": "Trends in the share of " }, { "children": [ { "text": "total tax revenue" } ], "type": "strong" }, { "text": " accounted for by environmental taxes vary across the EU 27 Member States. Between 2010 and 2023, this share increased in only two Member States (Bulgaria and Greece). The largest increase, from 7.7% to 10.6%, occurred in Greece. The share declined in the remaining 25 Member States with the largest fall between 2010 and 2023 in Ireland (from 8.6% to 4.4%) followed by the Netherlands (from 9.7% to 7.3%). 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Supporting information
Methodology [ { "children": [ { "text": "This indicator is based directly on data published by Eurostat, and the underpinning methodology can be found in Eurostat" }, { "children": [ { "text": " " } ], "data": { "footnote": "<?xml version=\"1.0\"?>\n<div class=\"csl-bib-body\" style=\"line-height: 1.35; \">\n <div class=\"csl-entry\">Eurostat, 2023, 'Environmental tax statistics &#x2014; detailed analysis', <i>Eurostat Statistic Explained</i> (https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Environmental_tax_statistics_-_detailed_analysis) accessed January 16, 2023.</div>\n</div>\n", "footnoteTitle": "Eurostat, 2023, Environmental tax statistics \u2014 detailed ", "uid": "zeESP", "zoteroId": "EFHRMRDL" }, "type": "zotero" }, { "text": "." } ], "type": "p" }, { "children": [ { "text": " " } ], "type": "p" }, { "type": "p", "children": [ { "text": "" }, { "type": "link", "data": { "url": null }, "children": [ { "text": "Values are expressed in 2025 prices, estimated by the EEA using the Eurostat GDP pricing index up to 2024 (" } ] }, { "text": "" }, { "type": "link", "data": { "url": "https://ec.europa.eu/eurostat/databrowser/product/view/nama_10_gdp" }, "children": [ { "text": "nama_10_gdp" } ] }, { "text": ") and the 2% ECB inflation estimate for " }, { "type": "link", "data": { "url": "https://www.ecb.europa.eu/press/projections/html/index.en.html" }, "children": [ { "text": "2025" } ] }, { "text": "." } ] } ]
Data sources and providers { "readOnly": true, "data": [ { "@id": "6cf16876-eefd-4dc2-b35e-aa1172d0c1fe", "title": "Environmental taxes by economic activity (NACE Rev. 2)", "link": "https://ec.europa.eu/eurostat/databrowser/view/ENV_AC_TAXIND2/default/table?lang=en", "organisation": "Eurostat - European statistics" }, { "@id": "dad9a6f0-8ff7-4ade-b7ce-b3f90fb2004b", "title": "Gross domestic product (GDP) and main components (output, expenditure and income)", "link": "https://ec.europa.eu/eurostat/databrowser/view/nama_10_gdp/default/table?lang=en&category=na10.nama10.nama_10_ma", "organisation": "Eurostat - European statistics" }, { "@id": "90b7c783-a608-45dc-9fd3-d80ca07894c7", "title": "Environmental tax revenues [env_ac_tax]", "link": "https://ec.europa.eu/eurostat/databrowser/view/env_ac_tax/default/table?lang=en&category=env.env_eta", "organisation": "EUROSTAT -Statistical Office of the European Union" }, { "@id": "707dd5d9-03c0-40a5-a6d4-0197d7f905ac", "title": "Environmental tax statistics", "link": "https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Environmental_tax_statistics", "organisation": "EUROSTAT - Statistical Office of the European Union" } ] }
Definition [ { "children": [ { "text": "\u2018An environmental tax is a tax whose tax base is a physical unit (or a proxy of a physical unit) of something that has a proven, specific negative impact on the environment, and which is defined in the ESA [European System of Accounts] as a tax\u2019" }, { "children": [ { "text": " " } ], "data": { "footnote": "<?xml version=\"1.0\"?>\n<div class=\"csl-bib-body\" style=\"line-height: 1.35; \">\n <div class=\"csl-entry\">Eurostat, 2023, 'Environmental tax statistics &#x2014; detailed analysis', <i>Eurostat Statistic Explained</i> (https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Environmental_tax_statistics_-_detailed_analysis) accessed January 16, 2023.</div>\n</div>\n", "footnoteTitle": "Eurostat, 2023, Environmental tax statistics \u2014 detailed ", "uid": "pad3Y", "zoteroId": "EFHRMRDL" }, "type": "zotero" }, { "text": ". This indicator measures environmental tax revenue as a share of total tax revenue, including social contributions, and is calculated by dividing environmental tax revenue by total tax revenue including social contributions. " } ], "type": "p" }, { "children": [ { "text": "" } ], "type": "p" }, { "children": [ { "text": "The EU ETS is not a tax, but a market-based environmental measure designed with the prime objective to reduce carbon emissions and provide a financial incentive to polluters to reduce emissions. The carbon price is not fixed by a government, but determined by the market based on demand and supply fundamentals. " } ], "type": "p" } ]
Unit of measure [ { "children": [ { "text": "Environmental tax revenue as a percentage of total tax revenue including social contributions, and the absolute amount of environmental tax revenue, in million euros, in 2010 prices." } ], "type": "p" } ]
Policy / environmental relevance [ { "children": [ { "text": "This indicator is a headline indicator for monitoring progress towards meeting the objectives of the Eighth Environment Action Programme (8th EAP). It contributes mainly to monitoring progress in relation to aspects of Article 3(v), which requires \u2018making the best use of environmental taxation, market-based instruments and green budgeting and financing tools, including those required to ensure a socially fair transition\u2019" }, { "children": [ { "text": " " } ], "data": { "footnote": "<?xml version=\"1.0\"?>\n<div class=\"csl-bib-body\" style=\"line-height: 1.35; \">\n <div class=\"csl-entry\">EC, 2022, Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the monitoring framework for the 8th Environment Action Programme: measuring progress towards the attainment of the programme&#x2019;s 2030 and 2050 priority objectives, COM (2022) 357 final of 26 July 2022.</div>\n</div>\n", "footnoteTitle": "EC, 2022, Communication from the Commission to the", "uid": "-N1ia", "zoteroId": "DIT5NBNY" }, "type": "zotero" }, { "text": ". The European Commission communication on the 8th EAP monitoring framework specifies that this indicator should be used to monitor the \u2018increase in" }, { "children": [ { "text": "" } ], "type": "i" }, { "text": "the share of environmental taxes in total revenues from taxes and social contributions\u2019" }, { "children": [ { "text": " " } ], "data": { "footnote": "<?xml version=\"1.0\"?>\n<div class=\"csl-bib-body\" style=\"line-height: 1.35; \">\n <div class=\"csl-entry\">EC, 2022, Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the monitoring framework for the 8th Environment Action Programme: measuring progress towards the attainment of the programme&#x2019;s 2030 and 2050 priority objectives, COM (2022) 357 final of 26 July 2022.</div>\n</div>\n", "footnoteTitle": "EC, 2022, Communication from the Commission to the", "uid": "5HKGC", "zoteroId": "DIT5NBNY" }, "type": "zotero" }, { "text": "." } ], "type": "p" } ]
Frequency of dissemination 1
Accuracy and uncertainties
Settings
Short name share-of-environmental-taxes-in
Versioning enabled yes
Contents