Corporate Carbon Tax Approved in Denmark

Published on: 25 June 2022
by KnowESG

According to the government, Danish lawmakers agreed on Friday to levy the highest corporate carbon tax in Europe, targeting businesses both inside and outside the EU's carbon quota system.

A high carbon tax is viewed as critical to helping Denmark meet its ambitious 2030 target of reducing greenhouse gas emissions by 70% from 1990 levels.

"(It is) the biggest single contribution so far to cut emissions by 2030," said tax minister Jeppe Bruus in a statement.

The total CO2 tax for companies subject to the EU Emissions Trading System (ETS) will be 1,125 Danish crowns ($159) per tonne by 2030, consisting of a 375 crown fee on top of the predicted 2030 price of EU carbon permits of 750 crowns.

To prevent a production exodus, companies involved in so-called mineralogical processes, such as cement maker Aalborg Portland, Denmark's largest CO2 emitter, would pay a lower price of 125 crowns per tonne on top of the ETS, according to the government.

Companies that are not subject to the EU's principal policy tool for reducing emissions, the ETS, would pay a carbon tax of 750 crowns.

Source: Reuters

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