Energy, Carbon Dioxide and Sulphur Taxation
Sweden has a complex system of energy and carbon taxation. The general energy excise tax was introduced in the 1950s. In 1991 Sweden energy tax system was modified, with the introduction of a CO2 tax, a reduction in the general energy tax, a tax on sulphur emissions and various value-added taxes on electricity and fuels. A levy system on nitrous oxide emissions was also added. These policies have both environmental and fiscal purposes, but in recent years focus has been a strengthening of the environmental aspects. The present tax structure comprises three elements: an energy tax, a CO2 tax and a sulphur tax. The energy tax is levied on all energy carriers used for engines and heating, except for most biofuels. The CO2 tax has been raised in stages over the years, from SEK 0.25/kg CO2 to SEK 1.20/kg CO2 in 2015, but this rate is reduced for the manufacturing, agriculture, forestry and aquaculture sectors. Special rules also apply to energy-intensive industries and for diesel use in land-based industries. The carbon dioxide tax is levied based on the carbon content of all fuels (the emitted quantities of carbon dioxide), except for biofuels and peat.
Electricity consumption is also taxed. The energy tax on electricity used in industrial processes and some other businesses in 2014 equals the minimum level allowed in the European Energy Tax Directive (2003/96/EC); EUR 0.5 MWh. The energy tax on electricity for most household consumers is SEK 0.292/kWh, approximately EUR 0.03/kWh (2016). Total revenue for the government from these taxes is approximately 4 % of all government revenue.
As of 2011, all installations covered by the EU ETS are exempt from payment of the CO2 tax, but not the energy tax. The carbon tax on fossil fuels for heating in industries not included in the EU ETS and for agricultural, forestry and aquaculture activities was increased in 2015 from 30 % of the general level to 60%. During the same period, the special reduction rules for energy-intensive industries will be gradually phased out. As from 1 January 2013, combined heat and power (CHP) production covered by the EU ETS is completely exempt from carbon dioxide tax, but is liable to an energy tax set at 30% of the standard rate.
The sulphur tax is applied to emissions where these are measured, or the sulphur content of oil used. In both cases, the tax is uniform across all users. For oil and diesel, the tax is charged per 0.1% of sulphur content by weight. For coke, coal and peat it is charged per kg of sulphur content. The sulphur tax is applied on heavy fuel oils, coal and peat. If sulphur is removed from the exhaust gases the tax is refunded at the same rate for each kg of sulphur removed.
In 2009 the government decided to raise the energy tax on diesel in two steps by a total of SEK 0.40 per litre. The first increase of SEK 0.20 was implemented on 1 January 2011 with the second increase of SEK 0.20 on 1 January 2013. To compensate heavy goods traffic, the vehicle tax on heavy goods vehicles and large buses is reduced. With effect from 1 February 2013, sustainable biofuels in petrol and diesel, in blends of up to 5% by volume, are exempt from the whole of the carbon dioxide tax and most of the energy tax (89% for biofuels in petrol and 84% for biofuels in diesel). E85 and other sustainable high-blend biofuels and biofuels with no fossil content are entirely exempt from carbon dioxide and energy tax on their biomass-based component.
The taxes change relatively often, and therefore those interested in exact and updated figures are advised to contact the Swedish Taxation Board, www.skatteverket.se.
Electricity consumption is also taxed. The energy tax on electricity used in industrial processes and some other businesses in 2014 equals the minimum level allowed in the European Energy Tax Directive (2003/96/EC); EUR 0.5 MWh. The energy tax on electricity for most household consumers is SEK 0.292/kWh, approximately EUR 0.03/kWh (2016). Total revenue for the government from these taxes is approximately 4 % of all government revenue.
As of 2011, all installations covered by the EU ETS are exempt from payment of the CO2 tax, but not the energy tax. The carbon tax on fossil fuels for heating in industries not included in the EU ETS and for agricultural, forestry and aquaculture activities was increased in 2015 from 30 % of the general level to 60%. During the same period, the special reduction rules for energy-intensive industries will be gradually phased out. As from 1 January 2013, combined heat and power (CHP) production covered by the EU ETS is completely exempt from carbon dioxide tax, but is liable to an energy tax set at 30% of the standard rate.
The sulphur tax is applied to emissions where these are measured, or the sulphur content of oil used. In both cases, the tax is uniform across all users. For oil and diesel, the tax is charged per 0.1% of sulphur content by weight. For coke, coal and peat it is charged per kg of sulphur content. The sulphur tax is applied on heavy fuel oils, coal and peat. If sulphur is removed from the exhaust gases the tax is refunded at the same rate for each kg of sulphur removed.
In 2009 the government decided to raise the energy tax on diesel in two steps by a total of SEK 0.40 per litre. The first increase of SEK 0.20 was implemented on 1 January 2011 with the second increase of SEK 0.20 on 1 January 2013. To compensate heavy goods traffic, the vehicle tax on heavy goods vehicles and large buses is reduced. With effect from 1 February 2013, sustainable biofuels in petrol and diesel, in blends of up to 5% by volume, are exempt from the whole of the carbon dioxide tax and most of the energy tax (89% for biofuels in petrol and 84% for biofuels in diesel). E85 and other sustainable high-blend biofuels and biofuels with no fossil content are entirely exempt from carbon dioxide and energy tax on their biomass-based component.
The taxes change relatively often, and therefore those interested in exact and updated figures are advised to contact the Swedish Taxation Board, www.skatteverket.se.
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