European carbon taxes vary widely in both rate and scope. As of April 1, 2026, Norway had the highest carbon tax rate in Europe at €146.23 per ton of carbon emissions, while Poland had the lowest at €0.09 per ton.
Across 24 European countries with carbon taxes, the average rate was €53.63 per ton.
The highest listed carbon tax rates were:
- Norway: €146.23 per ton
- Sweden: €133.17 per ton
- Switzerland: €129.09 per ton
- Liechtenstein: €129.09 per ton
The lowest listed rates were:
- Poland: €0.09 per ton
- Ukraine: €0.59 per ton
Carbon taxes can apply to different greenhouse gases, including carbon dioxide, methane, nitrous oxide, and fluorinated gases. Because each country defines its tax base differently, the share of emissions covered by the tax varies significantly.
Spain is an example of a narrow carbon tax. Its carbon tax applies only to fluorinated gases and covers about 2% of the country’s total greenhouse gas emissions.
By contrast, Albania, Andorra, Liechtenstein, and Luxembourg in principle cover 72% or more of their greenhouse gas emissions. However, exemptions and reduced rates can reduce the actual effectiveness of collection.
Carbon taxes and emissions trading systems
All European Union member states, plus Iceland, Liechtenstein, and Norway, participate in the EU Emissions Trading System, or EU ETS. The EU ETS is a market for trading a capped number of greenhouse gas emission allowances.
Most European countries with a carbon tax are also part of the EU ETS. The exceptions listed are:
- Albania
- Andorra
- Serbia
- Switzerland
- Ukraine
- United Kingdom
Switzerland has its own emissions trading system, which has been linked to the EU ETS since January 2020.
After Brexit, the United Kingdom implemented its own UK ETS from January 2021.
Overlap and double taxation risks
In several countries, the national carbon tax base overlaps with emissions already covered by the EU ETS. Countries listed with this issue include:
- Andorra
- Finland
- France
- Ireland
- the Netherlands
- Norway
- Portugal
Where national carbon taxes apply to emissions already covered by an emissions trading system, the same emissions base can face both systems. This creates a risk of double taxation.
The article also notes that when national carbon taxes apply to emissions covered by an ETS, they may shift emissions to sources outside the tax base while total emissions remain capped by ETS allowances.
Some countries apply multiple excise taxes or emissions trading systems to carbon-emitting sources at different implicit or explicit rates. In such cases, the highest applicable rate is used for comparison.
A neutral carbon tax design would apply the same rate to carbon emissions across all sectors.
Recent and planned changes
Several European countries have introduced carbon taxes or emissions trading systems in recent years.
Germany implemented a carbon tax in 2021. Austria followed in 2022. Germany phased its carbon tax into a national ETS in 2026. Both the German and Austrian systems are set to expire automatically once EU ETS-2 applies to the covered sectors.
Albania introduced a carbon tax in 2022.
Hungary introduced a carbon tax in 2023.
Serbia introduced a new carbon tax in 2026.
Catalonia is considering a carbon tax at the subnational level.
Turkey is considering a national emissions trading system.
The main policy issue is not only the rate, but also how much of each country’s emissions are covered, whether exemptions reduce collection efficiency, and whether national taxes overlap with emissions already covered by trading systems.
Source article: taxfoundation.org
