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Denmark will introduce a corporate carbon tax from 2025

The Danish coalition government has agreed to introduce a corporate carbon tax from 2025, which should progressively increase to DKK1,125/tCO2 (€150/tCO2) in 2030 for companies subject to the EU Emissions Trading System (ETS). The CO2 will consist of a DKK375/tCO2 (€50/tCO2) fee, which will be lowered to DKK125/tCO2 (€17/tCO2) for the mineralogical sector such as cement industry, on top of the projected 2030 price of EU carbon permits of DKK750/tCO2 (€100/tCO2). The fee will stand at DKK750/tCO2 (€100/tCO2) in 2030 for companies outside of the EU ETS.

The agreement is expected to reduce the country’s CO2 emissions by 1.3 MtCO2 by 2025 and 4.3 MtCO2 by 2030 contributing to achieve Denmark's target to lower its greenhouse gas emissions (GHG) in 2030 by 70% from 1990 levels. The government will use the proceed of the carbon tax to lower the electricity tax as from 2028 and create a DKK1bn (€130m) green fund to accelerate green transition and phase out fossil fuels between 2024 and 2040. The agreement will be revisited in 2023, 2026 and 2028.

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