Sweden unleashes CO2-based car tax scheme

Publication date: 11 March 2009

Higher fuel taxes and vehicle registration fees linked to carbon dioxide emissions are key features of a proposed climate package outlined by the Swedish government in an unusual sequence of press releases and a lengthy commentary in Dagens Nyheter newspaper on Monday and Tuesday.

Taxes on diesel would rise in two stages by SKr 0.4 (€0.03) per litre by 2013, and the registration tax by SKr 5 for every gram of CO2 over 120g/km emitted from 2010, the government said. From next January, new environment-friendly cars would be exempt from the registration tax for five years.

In addition, taxes on heating fuels in a range of industrial sectors including agriculture and forestry would soar from 21 percent to 60 percent. These increases would be compensated by lower social security and payroll taxes for companies, environment minister Andreas Carlgren said.

If agreed by parliament, the Swedish initiative would increase pressure from the European automotive industry for harmonised carbon dioxide-based car taxes. The proposed package also signals further changes to Sweden's original long-term strategy for cutting national greenhouse gas emissions.

Follow Up:

Government press release (Swedish) plus Dagens Nyheter article (Swedish) and news report in English.

Source: ENDS