New carbon tax as Catalonia aims for 100% carbon neutrality by 2050

New carbon tax as Catalonia aims for 100% carbon neutrality by 2050

Last Thursday, the Catalan Parliament passed new legislation to impose a carbon tax on any pollution-causing business activities, including the operation of polluting vehicles such as large vessels. The law follows closely behind Catalonia’s carbon tax on road vehicles introduced earlier this year.

The legislative package known as the “Climate Change Bill” comes with a clear aim: to reduce carbon emissions by 40% by 2030, 65% by 2040 and 100% by 2050. 

Learn more about this groundbreaking law – the first of its kind in southern Europe.

The Cost of a Zero-Carbon Economy

Although the bill was received with a “wide political consensus” according to Minister of Territory and Sustainability Josep Rull, the consequences for businesses will be costly.

So exactly how much will this new Climate Change Bill affect businesses in terms of cost? Similar to the UK carbon tax, the rate will be around 10 euros for each tonne of carbon dioxide emitted. The tax will increase automatically every two years, eventually reaching 30 euros per tonne in 2025.

Which industries will be affected by the carbon tax?

The tax is to be imposed on heavily polluting industries such as the chemical industry, oil and gas, cement manufacturers, glass and paper factories, mining facilities, industrial meat processing, dangerous waste elimination facilities and the metallurgical industry.

It’s easy to imagine how regulations like these might put carbon-intensive industries at an unfair disadvantage, but there is cause for hope. Some are implementing aggressive energy efficiency projects that can help balance the cost of legislation like the recent Catalan Climate Change Bill.

Take the example of TACSA metallurgy, who recently managed to generate more than €100,000 in savings over the course of several months pursing energy efficiency actions in its 2 plants:

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The Catalan carbon regulations will also apply to ships, who will be forced to pay around 1,000 euros for each tonne of nitrogen oxide they emit.

Next steps: Carbon tax in Catalonia

The Catalan government will now have to approve the plans for implementing the two new taxes before 1 December 2017, with the new law going into force in 2019.

Any revenue raised through these taxes is earmarked to finance a series of climate actions, including the promotion of renewable energy and energy-efficient housing. This will be achieved through 3 funds: a Climate Change Fund, a fund for Natural Heritage and a Fund for the Protection of the Atmospheric Environment. These funds are intended to support policies for climate change mitigation and adaptation, boosting renewables, fostering the self-consumption of electricity and for energy-efficient housing, as well as for sustainable mobility, water saving and the optimisation of production processes.

Catalonia also has a target of achieving a 20% share of renewable energy in its total energy consumption by 2020, so this law should help move the region closer to its climate aims.

“The struggle against climate change is not a project of the Government of Catalonia, but rather a national challenge,” said Carles Puigdemont, President of the Generalitat of Catalonia. “It is something that has a direct impact on our prosperity and the economic model on which our country is based.”

The same is true for the rest of the world – so be sure to check out our quick guide to climate and energy-related regulations worldwide

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