In recent years, several countries have taken measures to reduce carbon emissions, including instituting environmental regulations, emissions trading systems (ETS), and carbon taxes. In 1990, Finland was the world’s first country to introduce a carbon tax. Since then, 18 European countries have followed, implementing carbon taxes that range from less than €1 per metric ton of carbon emissions in Poland and Ukraine to more than €100 in Sweden.

Sweden levies the highest carbon tax rate at €116.33 (US $137) per ton of carbon emissions, followed by Switzerland and Liechtenstein (€85.76, $101) and Finland (€62, $73.02). You’ll find the lowest carbon tax rates in Poland (€0.07, $0.08), Ukraine (€0.25, $0.30), and Estonia (€2, $2.36).

Carbon taxes can be levied on different types of greenhouse gases, such as carbon dioxide, methane, nitrous oxide, and fluorinated gases. The scope of each country’s carbon tax differs, resulting in varying shares of greenhouse gas emissions covered by the tax. For example, Spain’s carbon tax only applies to fluorinated gases, taxing only 3 percent of the country’s total greenhouse gas emissions. Norway, by contrast, recently abolished most exemptions and reduced rates, and now covers more than 60 percent of its greenhouse gas emissions.

All member states of the European Union (plus Iceland, Liechtenstein, and Norway) are part of the EU Emissions Trading System (EU ETS), a market created to trade a capped number of greenhouse gas emission allowances. With the exception of Switzerland, Ukraine, and the United Kingdom, all European countries that levy a carbon tax are also part of the EU ETS. (Switzerland has its own emissions trading system, which is tied to the EU ETS since January 2020. Following Brexit, the UK implemented its own UK ETS as of January 2021.)

Several European countries are considering or have announced the implementation of a carbon tax or an ETS. For example, Austria is considering the introduction of carbon pricing for sectors not covered by the EU ETS (transportation and buildings) and Turkey announced the implementation of a national ETS (but a possible start date is unclear).

Carbon Taxes in Europe, 2021
Carbon Tax Rates, Share of Covered Greenhouse Gas Emissions, and Year of Implementation in European Countries (as of April 1, 2021)
  Carbon Tax Rate (per ton of CO2e) Share of Jurisdiction’s Greenhouse Gas Emissions Covered Year of Implementation
  Euros US Dollars    
Denmark (DK)  €23.78  $28.00 35% 1992
Estonia (EE)  € 2.00  $2.36 6% 2000
Finland (FI)  €62.00  $73.02 36% 1990
France (FR)  €45.00  $53.00 35% 2014
Iceland (IS)  €29.72  $35.00 55% 2010
Ireland (IE)  €33.50  $39.45 49% 2010
Latvia (LV)  €12.00  $14.13 3% 2004
Liechtenstein (LI)  €85.76  $101.00 26% 2008
Luxembourg (LU)  €20.00  $23.55 65% 2021
Netherlands (NL)  €30.00  $35.33 12% 2021
Norway (NO)  €58.59  $69.00 66% 1991
Poland (PL)  €0.07  $0.08 4% 1990
Portugal (PT)*  €24.00  $28.26 29% 2015
Slovenia (SI)  €17.30  $20.37 50% 1996
Spain (ES)  €15.00  $17.67 3% 2014
Sweden (SE)  €116.33  $137.00 40% 1991
Switzerland (CH)  €85.76  $101.00 33% 2008
Ukraine (UA)  €0.25  $0.30 71% 2011
United Kingdom (GB)  €21.23  $25.00 23% 2013
   €35.91  $42.29 34%  


*Portugal ties its carbon tax rate to the previous year’s EU ETS allowances price.

The carbon tax rates were converted using the EUR-USD currency conversion rate as of April 1, 2021 (USD 1 = EUR 0.84913).

Source: The World Bank, “Carbon Pricing Dashboard,” last updated Apr. 1, 2021,

Was this page helpful to you?

Thank You!

The Tax Foundation works hard to provide insightful tax policy analysis. Our work depends on support from members of the public like you. Would you consider contributing to our work?

Contribute to the Tax Foundation

Articles You May Like

GameStop closes more than 12% lower after annual meeting fails to offer details on firm’s strategy
Family films led by ‘Inside Out 2’ could reignite the box office
Trump tax breaks are set to expire after 2025. Here’s what advisors are telling their clients
How Eli Lilly is managing soaring demand for GLP-1s, according to outgoing CFO Anat Ashkenazi
Senate Democrats call for higher taxes on Wall Street profits to address federal budget deficit