Meanwhile, revenue from energy-related taxes reached €261 billion, corresponding to 1.5% of the European Union’s Gross Domestic Product (GDP). However, this represents the lowest share of GDP since 2008, indicating structural changes in energy consumption and the economy.
Climate-related taxes constitute a key policy instrument for the European Union and its member states, aiming to reduce greenhouse gas (GHG) emissions and curb global warming in line with the commitments of the Paris Agreement. By levying taxes on goods and services whose production or use generates GHG emissions, governments seek to increase the cost of polluting activities. In this way, both businesses and consumers are encouraged to reduce their carbon footprint and shift toward cleaner alternatives.
Energy and transport taxes account for the vast majority of environmental tax revenues in the EU, covering approximately 95% of the total in 2023, with energy taxes alone exceeding 75%.
Addressing climate change requires a drastic reduction in greenhouse gas emissions. Within this framework, the European Union has committed to cutting net emissions by at least 55% by 2030 compared to 1990 levels, and achieving climate neutrality by 2050. To reach these targets, member states employ a wide range of policy instruments designed to steer economic and social behavior toward more sustainable practices.
These instruments are categorized as fiscal and non-fiscal. Fiscal tools include direct monetary interventions, such as taxes and emissions trading systems, which render environmentally harmful activities economically unattractive. They also encompass incentives for environmentally friendly choices, including tax breaks, subsidies, and investment support. Non-fiscal tools, on the other hand, rely on regulatory measures, non-monetary incentives, public awareness campaigns, and the development of infrastructure, such as public transport networks.
It should be noted that the new European regulation on decarbonization in buildings, transport, and small-scale industry, which will take effect in 2027, is expected to impose significant economic burdens on households and small businesses.
According to forecasts, a carbon tax will be added to fossil fuels—namely gasoline, diesel, and heating oil—resulting in price increases. Based on current CO₂ emission allowance prices, gasoline is expected to rise by €0.102 per liter, diesel by €0.113 per liter, and heating oil by €0.14 per liter.
