A short monologue on what a government can get wrong when implementing a carbon tax – and a look at the impact on the economy.
So from 2021 there will now also be a CO2 tax in Germany. And it has fortunately been raised at the last moment from a homeopathic EUR 10 per ton to EUR 25. The CO2 tax is a so-called incentive tax and is intended to contribute to a reduction in CO2 emissions.
For cost reasons, the CO2 tax is levied at the point of production, i.e. the actual polluters (households, industry, transport, service providers) are only indirectly affected. They pay a higher energy price instead of being actively rewarded for reducing their own emissions. Of course, their costs also decrease if they emit less CO2, but the context is completely lost. Or do any of you consciously drive your car more economically since the eco-tax came into existence?
But what do the effects look like? Based on an average energy price for electricity of 4.5 ct/kWh, costs rise by 23 percent in Germany and 14 percent in Austria, by 28 percent for an average energy price for natural gas of 1.8 ct/kWh and by 12 percent for an average energy price for district heating of 5.5 ct/kWh. These figures double if the CO2 tax is increased to EUR 50 and triple if it is EUR 75.
By the way, in France, since 2018, the ton of CO2 is taxed at almost 45 EUR. In Sweden, the CO2 tax was introduced back in 1991 and has been EUR 120 since 2019. In Switzerland, the CO2 tax is currently CHF 96 per ton.
What does the CO2 tax of EUR 25 per ton of CO2 mean in practice?
- Example 1For a hotel in Germany with 200 rooms and an energy consumption of 1 GWh electricity and 1 GWh district heating, the energy costs increase by almost 17,000 EUR p.a. (at 50 EUR/t by 33,800 EUR p.a. and at 75 EUR/t by 50,700 EUR p.a.).
- Example 2: For a supermarket in Austria with an energy consumption of 550,000 kWh of electricity and 100,000 kWh of natural gas, the energy costs increase by a good 4,000 EUR per year (at 50 EUR/t by 8,040 EUR p.a. and at 75 EUR/t by 12,060 EUR p.a.).
- Example 3: For a metal factory in Germany with an energy consumption of 24 GWh electricity and 2.7 GWh natural gas, the energy costs increase by a good 260,000 EUR p.a. (at 50 EUR/t by 526,200 EUR p.a. and at 75 EUR/t by 789,300 EUR p.a.).
- Example 4For a clinic with 150 beds in Austria with an energy consumption of 7 GWh electricity and 1 GWh natural gas as well as 6.5 GWh district heating, the energy costs increase by a good 90,000 EUR per year (at 50 EUR/t by 184,100 EUR p.a. and at 75 EUR/t by 276,150 EUR p.a.).
Higher prices, this is true everywhere, make more costly technologies lucrative and improve the payback period of investments. In this respect, it is to be hoped that more and more companies will deal with the complex matter of energy efficiency and realize potential savings.
An easier way to raise awareness of the negative consequences of CO2 emissions is the carbon footprint. For a year now, we have been campaigning for the legal obligation to draw up a CO2 balance – as an alternative to the costly and “toothless” energy audit. Requiring a Scope 1-3 carbon footprint every 2 years would also fit perfectly with a consumer-based carbon tax.