The Spanish Council of Ministers has approved the referral to Parliament of a Bill that would establish a tax on fluorinated gases at €20/tCO2eq, as a means to reap environmental taxation’s double dividend: correct environmental externalities on the one hand and alleviate the tax burden on employment on the other.
The economic reality in Spain shows that additional efforts and measures are required in order to lay the foundations for the consolidation of public finances. To this end, a new Bill has been proposed that would introduce several changes in tax regulations, and primarily in the regulations concerning corporate income tax.
Following recommendations by the European Union to increase the environmental tax burden, a tax on fluorinated greenhouse gases is proposed as part of the Act, as a means to correct environmental externalities and promote the building of a sustainable economy.
F-gas tax levels would be calculated based on GWP values
The tax would apply as of January 2014 throughout the Spanish territory to the consumption of fluorinated gases with Global Warming Potential (GWP) above 150, including hydrofluorocarbons (HFCs). The use of f-gases in hermetically sealed systems and pre-charged equipment with up to 3kg of HFCs would be exempt from the proposed tax.
Tax levels will be calculated on the basis of the GWP of the fluorinated gases or their mixtures, by applying the coefficient of 0.020 to the GWP value of each fluorinated gas, up to a maximum of €100 per kilogram, thus corresponding to a tax level of €20 per tonne of CO2 eq (tCO2eq). Making use of the GWP values referred to in the current EU F-Gas Regulation (Annex I to Regulation (EC) No 842 / 2006), which are in turn based on the GWP values included in IPCC Third Assessment Report, the Spanish Act if passed would result in the following tax rates:
The tax would equally apply to mixtures of pure HFCs, such as R404A and R410A.
Tax deduction for certified destruction of f-gases
Moreover, the Act would establish a tax deduction in case of certified destruction of the gases covered by the tax.
A tax deduction of €7 per kg of fluorinated greenhouse gas treated/destructed in accordance with waste legislation is also foreseen by the proposal.
Following recommendations by the European Union to increase the environmental tax burden, a tax on fluorinated greenhouse gases is proposed as part of the Act, as a means to correct environmental externalities and promote the building of a sustainable economy.
F-gas tax levels would be calculated based on GWP values
The tax would apply as of January 2014 throughout the Spanish territory to the consumption of fluorinated gases with Global Warming Potential (GWP) above 150, including hydrofluorocarbons (HFCs). The use of f-gases in hermetically sealed systems and pre-charged equipment with up to 3kg of HFCs would be exempt from the proposed tax.
Tax levels will be calculated on the basis of the GWP of the fluorinated gases or their mixtures, by applying the coefficient of 0.020 to the GWP value of each fluorinated gas, up to a maximum of €100 per kilogram, thus corresponding to a tax level of €20 per tonne of CO2 eq (tCO2eq). Making use of the GWP values referred to in the current EU F-Gas Regulation (Annex I to Regulation (EC) No 842 / 2006), which are in turn based on the GWP values included in IPCC Third Assessment Report, the Spanish Act if passed would result in the following tax rates:
- HFC134a (GWP = 1,300): €26/kg
- HFC32 (GWP = 550): €11/kg
- HFC125 (GWP = 3,400): €68/kg
- HFC152a (GWP = 120): 0
- HFC143a (GWP = 4,300): €86/kg
- HFC23 (GWP = 12,000): €100/kg
- …
The tax would equally apply to mixtures of pure HFCs, such as R404A and R410A.
Tax deduction for certified destruction of f-gases
Moreover, the Act would establish a tax deduction in case of certified destruction of the gases covered by the tax.
A tax deduction of €7 per kg of fluorinated greenhouse gas treated/destructed in accordance with waste legislation is also foreseen by the proposal.
MORE INFORMATION
Jul 08, 2013, 16:52
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