New Carbon Taxation in Iceland Disputed Skip to content

New Carbon Taxation in Iceland Disputed

Representatives of the Icelandic economy strongly oppose the government’s plans on raising the fee that must be paid for the use of fossil fuels and the adoption of tariffs on mineral substances in solid form, including electrodes in large-scale industries.


The Rio Tinto Alcan aluminum smelter in Straumsvík. Copyright: Icelandic Photo Agency.

They reason that this is a case of double taxation, claiming that it is in violation of investment contracts and an agreement made by the ministers of finance and industry to the Confederation of Icelandic Employers (SA) and the large-scale industrial companies in December 2009—a claim which the Ministry of Finance has rejected, reports.

By raising the carbon fee, additional income of ISK 800 million (USD 6.7 million, EUR 5.0 million) is expected to be obtained for the state treasury in 2012.

Today, the carbon fee is 75 percent of the price of emission quota on the European Union Emissions Trading Scheme (EU ETS), while it will reach 100 percent if these new ideas are implemented.

As of January 1, 2013, large-scale industrial companies in Iceland will become part of the EU ETS where carbon taxation is generally not taken into account.


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