Part of Our EU-27 Green Tax Wiki

Introduction

More than half of the world ’s population lives in cities, which account for 70% of global energy-related greenhouse gas emissions. The Executive Director of UN-Habitat, Maimunah Mohd Sharif, explained: “Cities around the world are the main cause of climate change, but can also provide part of the solution to reduce harmful greenhouse gases that cause global temperatures to rise.” Since carbon emissions remains the biggest negative impactor among greenhouse gases emission, effectively reducing the use of fuel and natural gas through taxation will greatly reduce the impact of carbon emissions on the global climate.

In 2009, Denmark’s Samsø island became a typical representative of action against climate change, because it has been carbon neutral for more than 10 years. This inspired the Balearic Islands in Spain, followed by another 26 European islands, including Malta, the world’s cryptocurrency hub, in promising to transition to 100% renewable energy this year and to abandon coal power. By now, most EU countries have pledged to phase out coal-fired power plants by 2038.

Faced with the city ’s air pollution crisis and realizing that diesel does not have any benefit to the climate, EU member states have been reconsidering their tax policies. In reality, Western Europeans pay less fuel tax today than they did 20 years ago. Transportation is the EU’s largest emitting sector. Road transportation, including cars, trucks, trucks and motorcycles, accounts for 21% of the EU's total greenhouse gas emissions. Although climate change has become a political priority of the new European Commission, in reality, fuel taxes have declined in recent decades. The average tax on gasoline and diesel weighted by sales fell from 64 cents per liter of fuel in 1998 to 54 cents in 2018. The gap between diesel tax and gasoline tax is very slow, but it is indeed closing. In 2019, the gap between the diesel and gasoline taxes paid by motorists is close to 0.12 euros per liter, and the diesel tax is 27% lower than the energy gasoline tax per unit.

Most European countries implement high fuel tax policies. Traditionally, the fuel price in Europe is 3 to 4 times than the United States. For example, the price of gasoline in Europe from 2000 to 2005 was 1 euro/liter (about 1.54 US dollars/liter or 5.82 US dollars/gallon). It is $1.50/gallon ($0.40/liter) in the U.S. This situation has been maintained for many years and has not caused too much opposition. In the United States, there are more guarantees for fuel prices. From 2007 to 2008, pre-tax market prices increased causing gasoline prices to increase in various places.

However, the price of gasoline in Europe is still double the price of gasoline in the United States.

Top Five Expensive Gasoline Counties in European Counties

Norway - $2.02/liter

Norway is Europe ’s leading oil producer. The country chose to levy taxes instead of fuel subsidies, so gasoline prices are staggeringly high.

Netherlands - $1.93/liter

Fuel costs in the Netherlands increased year by year. At present, the price of gasoline per liter is $1.93, which increase 2.3% from last year.

Denmark - $1.91/liter

The price of gasoline in Denmark has been rising rapidly. Currently, the average price of gasoline per liter is $ 1.91, which is 7.2% more expensive than last February.

Greece - $1.89 /liter

In order to tighten the country's income, the Greek government imposed a punitive tax on gasoline sales, with an average price of $ 1.89 per liter of gasoline.

Italy - $1.88/liter

Italy ’s gasoline prices have been rising relatively slowly. The current price per liter is $1.88, which has only increased by 1.3% than last year.

In order to promote cross-border trade and prevent serious competition distortions, the European Union requires EU countries to impose a minimum consumption tax of 0.36 euros per liter on gasoline ($1.61 per gallon). As the map shown below, only Bulgaria adheres to the minimum tax rate, while all other EU countries have chosen to impose higher consumption taxes on gasoline. Following Bulgaria are Hungary (0.38 euros per liter or 1.70 US dollars per gallon) and Poland (0.39 euros per liter or 1.74 US dollars per gallon).

Since one-third to half of the cars in the EU are diesel vehicles, many European consumers face a consumption tax on diesel rather than gasoline. The minimum diesel consumption tax set by the European Union is 0.33 euros per liter ($1.47 per gallon). Out ff the 27 EU countries, 26 countries have lower consumption taxes on diesel than on gasoline. Only Belgium imposes the same tax rate on both fuels. In the European Union, the average consumption tax for gasoline is 0.56 euros per liter ($2.48 per gallon), while the average consumption tax for diesel is 0.45 euros per liter ($2.00 per gallon).

Here is link to fuel tax tool support by European Federation for Transport and Environment:

https://infogram.com/1p1xqzj3rw527esmx5eex30dxzb63xekxm7

Reference

https://www.transportenvironment.org/what-we-do/sustainable-finance/fuel-taxes https://taxfoundation.org/gas-taxes-europe-2019/

https://ec.europa.eu/energy/data-analysis/weekly-oil-bulletin_en