What about the Spainvironment?

When the Paris Climate Conference in December 2015 came to the end, everybody could see how enthusiastic and satisfied our political leaders looked like. Propaganda? Apparently, the agreement will not prevent the extinction of islands, the devastating effects on some communities or the increase of extreme climatologic conditions, to say the least. But well, one can reasonably argue that most of our leaders at the moment are strongly needed of good news. Global warming issues must be tackled with some precautions though. It is such a technical area, with multiple factors taking place. That is why some assumptions might be helpful beforehand.

In the first place, the existence of the climate change is vastly recognised by both public and experts, not by Mr. Donald Trump, unfortunately[1]. Second, the level of carbon dioxide (CO2) had never increased so quickly before. Finally, a line must be drawn between the air quality, which affects human health in the short-run, and the climate change or global warming, which is nonetheless a consequence in the long-run of the amount of man-made pollution.

Likewise, environmental taxation plays a fundamental role on redressing this issue. As in many areas of the law, here the Spanish citizens are bound by the European Union (EU), the State, the regional governments and the city councils.

In general, it is right to say that the EU legislation establishes top limits on the level of pollution and minimum tax rates on polluting substances. The definition of environmental tax –based upon a physical unit with negative externalities- was stated on the Regulation (EU) Nº 691/2011. Notwithstanding, the most relevant legislation in this regard are the European Trading Scheme (ETS) and the Energy Tax Directive (ETD), both created in 2005 and still remaining in force nowadays. Some other States apart from the Member States have also joined the scheme in question, the biggest multinational cap-and-trade programme on greenhouse emissions all over the world. The ETS  sets a declining cap on these emissions (mainly CO2) and applies to the trading sectors, that is the large emitters such as the power and heavy industry, which represents some 45% of the total CO2 emissions in Europe[2]. The Members States must deal with the 65% left. So far so good. On the contrary, much criticism has taken place since its introduction. The scheme is said to allow businesses to make money in ‘dodgy’ ways because it is easy to cheat. In addition to it, the ETS and the ETD overlap in some areas. Unfortunately, the proposal to revise the scheme during the 2015 was withdrawn by the European Commission[3].

*Source: Own elaboration

Within the Spanish jurisdiction, environmental taxes are recognised as ‘impuestos especiales’ under the ‘Ley 38/1992’[4] and the ‘Real Decreto 1165/1995’ together with taxes on alcoholic drinks or tobacco. The general and old principle is that ‘the more you pollute, the more you pay’. Member States in the EU are responsible for taxing non-trading sectors i.e. the sectors not taxed by the EU ETS programme. The most relevant Spanish environmental taxes are listed next.

  • ‘Impuesto sobre Matriculación’:

It was also called ‘impuesto sobre determinados medios de transporte’  ‘impuesto verde’. In other jurisdictions, such as Ireland, they refer to it generally as the Vehicle Registration Tax (VRT). The liability to pay arises at the moment of the purchase of the vehicle and you will only pay it once. The collection of the tax is made by the Autonomous Communities (CCAA) but the elements of the tax were harmonised for the whole State.  The tax rates as a percentage of the selling price depends upon the amount of carbon dioxide (CO2) emitted by the vehicle being purchased[5].

Menos de 120 g/km de C02 0
121-160 g/km de CO2 4,75%*
161-200 g/km de CO2 9,75%*
Más de 200 g/km de CO2 14,75%*

*% of the selling price

  • ‘Impuesto de Circulación’:

This tax is technically recognised as ‘impuesto sobre vehículos de tracción mecánica (IVTM)’ or generally annual motor tax in Common Law jurisdictions. Its elements and collection are completely decided by the city councils. The tax is to be paid in annual basis instead of by the moment of the purchase of the vehicle. Its tax rate will also depend upon the amount of carbon dioxide emitted by the vehicle in question. All kinds of vehicles are considered. For instance, in Barcelona the tax rates for some of the vehicles are the next[6]:

  • ‘Impuesto sobre hidrocarburos’:

The liability arises after the supply of products such as petrol, fuel, kerosene or biodiesel. Its elements and collection are split between the State and the Autonomous Communities. In Catalonia, the ‘Llei 2/2014[7]’ establishes an extra tax rate on this product[8]. In some Common Law jurisdictions, as Ireland, these products are levied under the Carbon Tax, which also apply to Natural gas and Solid Fuel Carbon Tax. We will get back to this particular tax later.

  • The failed ‘Céntimo Sanitario’:

Its official name was ‘Impuesto de Ventas Minoristas en Determinados Hidrocarburos’, it was enacted in the Spanish jurisdiction in 2002 and was included under the ‘impuestos sobre hidrocarburos’ in 2013. Its tax rate was up to 5 cents per litre of oil and its revenue was initially meant to be directed to the health care system. Nonetheless, it was recently declared illegal by the European Court of Justice because it did not comply with the Directive in question (the ETD stated above)[9]. The Spanish ‘Tribunal Supremo’ just upheld in 2016 that the Revenue must pay the taxpayer back if requested by the latter[10].

  • Other environmental taxes:

The tax on electricity and the tax on polluting waters (‘canon sobre control de vertidos’) also apply to substances which are supposed to have an adverse effect on the environment. Moreover, the introduction of a new tax under a ‘Ley de Cambio Climático’ has recently been discussed. Mariano Rajoy, who remains the Prime Minister even though the elections took place 4 months ago, argued he would enact a new Act in this regard in the next legislature if he was appointed president again. In Catalonia, its Parliament has already started proceedings to enact a Climate Change Act which would also tax vehicles, from 2018 onwards, depending upon the CO2 emitted. In addition to it, there is not any Carbon Tax in this jurisdiction. The EU has encouraged its introduction since the creation of the EU ETS system in 2005 and many other jurisdictions in Europe, such as Finland, Norway or the Netherlands, created this tax in the 1990s. Notwithstanding, CO2 emissions are already taxed in our jurisdiction, as said before. The enactment of a new Carbon Tax would only increase the amount to be paid. This would also be done through amendments on the current legislation.

In any case, it is not easy to know what countries are doing better than other at all. Taxation is a basic element but not the only one i.e. one must also look at what industries or sectors are subsidised by the government, what are the public policies incentivising clean energies and so on. Furthermore, higher tax rates do not necessarily imply more efficiency. The European legislation so far seems to be rather light though: minimum tax rates are quite low, mechanisms of non-compliance are not effective and there are still some industrial sectors, lobbies also playing its role, which prevents further improvements. Analysing the next three feature might throw us some light on this sense.

  • Revenues from environmental taxes:

The revenues collected from environmental taxes are indicative of its effectivity in our fiscal system. In Spain, only some 5.5% of total revenue comes from environmental taxes. This feature represents a 0.2% decrease from 2006 value; it is 0.8% below the European Union average; only 5 Member States are collecting a smaller proportion of revenues from environmental taxes[11].


  • Greenhouse emissions

The target for 2020 was established at a 20% reduction of greenhouse emissions (GHG) in respect of 1990 values. This reduction is to be increased up to a 40% in 2030 and 80% in 2050[13].

Greenhouse gas emissions (including international aviation and excluding LULUCF) trend, EU-28, 1990–2013
(Index 1990 = 100)

The graphic above shows that the 20% reduction has almost been achieved (including international aviation but excluding LULUCF). Moreover, GHG emissions were the highest in Germany in 2013: 22% of the EU-28 total. Spain is the sixth highest emitter in this list, up to more than 7% of EU-28 total. Even though the GHG emissions in Spain have decreased since 2005, the 2013 value is more than 10% higher than the 1990 one (only three Member States are doing worse). Countries such as Lithuania, Latvia or Estonia reduced their GHG emissions in more than 50% in only 20 years[14].

  • Renewable energies:

In this area, the European Union targets are for a 20% of consumption of renewable energies in 2020 (out of total consumption of energy) and a 27% in 2030[15]. The target is not completely harmonised among the States but distributed with national action plans.

Share of renewables in gross final energy consumption, 2013 and 2020 (%)

In average, the EU-28 share of renewables in gross final energy consumption stood at 15% in 2013. Sweden, Latvia and Finland are the ones doing better. Only 5 of the Member States already achieved the 2020 target in 2013. In Spain, the share of renewables is slightly higher than in the EU-28. Notwithstanding, Spain is one of the States doing better in proportion of electricity from renewable energies, up to almost the double of EU-28 level[16]. The climatology is clearly a factor which helps.


Even though Spain does not have a Climate Change Act or a Carbon Tax, many environmental taxes have been created in the State since the 1990s. Its effectivity is doubtful, to say the least. We are lagging behind the majority of European jurisdictions on revenue from environmental taxes and the reduction of greenhouse emissions. Creating new taxes or increasing tax rates on the existing ones might be the easiest solution, but not necessarily the most effective one.

The Spanish government during the last decades, regardless of its colour, has not been responsible in this regard. It is always easy to blame the European Union or International Conferences such as the recent one in Paris. For obvious reasons, these are sometimes unable to create truly effective and binding mechanisms to be used against the States.

This country needs a government ready for taking stronger measures. Weak international agreements or economic growth are no longer valid excuses. Well, I guess Mr. Donald Trump would still disagree, but it’s fine.


[1] Brady Dennis, ‘Trump: I am not a big believer in man-made climate change.’ The Washington Post <https://www.washingtonpost.com/news/energy-environment/wp/2016/03/22/this-is-the-only-type-of-climate-change-donald-trump-believes-in/> accessed 21 April 2016

[2] EDF, CDC and IETA ‘European Union: An Emissions Trading Case Study’ (2015) page 2 para http://www.ieta.org/resources/Resources/Case_Studies_Worlds_Carbon_Markets/euets_case_study_may2015.pdf> accessed 1 April 2016

[3] Dr. Dörte Fouqet and Jana Viktoria Nysten, ‘Energy Taxation in the EU’ Part VII: Outlook <http://www.keepontrack.eu/contents/virtualhelpdeskdocuments/energy-taxation_1718.pdf> accessed 1 April 2016

[4] Ley 38/1992, de 28 de diciembre, de Impuestos Especiales.

[5] Luis Ramos Penebad, ‘Todo sobre el Impuesto de matriculación’ (2015) Noticias coches <http://noticias.coches.com/consejos/impuesto-de-matriculacion/182273> accessed 20 April 2016

[6] Ajuntament de Barcelona, ‘Ordenanza fiscal reguladora del impuesto sobre vehículos de tracción mecánica’ (2015)

[7] Ley 2/2014, de 27 de enero, de medidas fiscales, administrativas, financieras y del sector público

[8] TV3, ‘La llei sobre el canvi climàtic de Catalunya preveu un impost per als vehicles més contaminants’ (2016) <http://www.ccma.cat/tv3/alacarta/els-matins/la-llei-sobre-el-canvi-climatic-de-catalunya-preveu-un-impost-per-als-vehicles-mes-contaminants/video/5580297/> accessed 16 April 2016

[9] J.G. Gallego and P. Romero, “Preguntas y respuestas sobre la anulación del ‘céntimo sanitario” ‘ (2014) <http://www.elmundo.es/economia/2014/02/27/530f2561e2704e7d2f8b456f.html> accessed 23 April 2016

[10] El País, ‘El Supremo obliga a Hacienda a pagar las reclamaciones del céntimo sanitario’ (2016) <http://economia.elpais.com/economia/2016/02/18/actualidad/1455820777_308500.html> accessed 23 April 2016

[11] El País, ‘España, entre los países de la UE en los que menos peso tienen los impuestos medioambientales’ (2016) <http://economia.elpais.com/economia/2016/04/22/actualidad/1461321745_522480.html> accessed 22 April 2016

[12] Eurostat, Environmental taxes made up 6.3% of tax revenues in the EU in 2014’ (2016) <http://ec.europa.eu/eurostat/documents/2995521/7236510/8-22042016-BP-EN.pdf/b910e804-e410-4b9c-b9ab-1893398e2a2d> accessed 22 April 2016

[13] European Commission, ‘Acción por el clima de la UE’ (2016) http://ec.europa.eu/clima/citizens/eu/index_es.htm accessed 23 April 2016

[14] Eurostat, ‘Total greenhouse gas emissions by countries’ (2016) http://ec.europa.eu/eurostat/statistics-explained/index.php/File:Total_greenhouse_gas_emissions_by_countries_(including_international_aviation_and_excluding_LULUCF),_2013,_(Index_1990_%3D_100)_new.png accessed 23 April 2016

[15] European Commission, ‘Acción por el clima de la UE’ (2016) http://ec.europa.eu/clima/citizens/eu/index_es.htm accessed 23 April 2016

[16] Eurostat, ‘Renewable energy statistics’ (2015) http://ec.europa.eu/eurostat/statistics-explained/index.php/Renewable_energy_statistics accessed 23 April 2016

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