Climate change is a critical issue that is as much political as it is ecological. Governments in EU implement stringent regulations to reduce carbon emissions. In order to make fossil energies more expensive and to promote climate-friendly alternatives, many European countries already have imposed CO2 tax mainly on use of fossil fuels, and especially in the areas of heating and transport, to minimize greenhouse gases and achieve the climate goals of the federal governments.

Carbon dioxide is a gas found in the atmosphere as well as in vegetation and oceans. Plants produce oxygen from CO2 and water during photosynthesis. However, if too much CO2 is emitted, for example by burning raw materials such as oil or coal, the climate warms up. In turn, climate change has an impact on the living conditions of humans and animals. A CO2 tax is a term used to describe taxes that are charged for the emission of carbon dioxide. In the narrower sense, this is not a tax, but national CO2 emissions trading. A CO2 tax aims to compensate for and reduce the negative effects of emissions through a defined price. 

Many nations have been levying this tax for years and others are following suit. The current tax amount in some European counties is indicated below (values in Euro per tonne of CO2 generated). 

Germany- 30 Euro/tonne for CO2 

Austria- 30 Euro/tonne for CO2

Sweden- 1,200 Swedish crowns (118 Euro)/tonne for CO2

Switzerland- 120 CHF (111 Euro)/tonne for CO2

France- 45 Euro/tonne for CO2

Ireland- 33.50 Euro/tonne for CO2

Slovenia- 17 euros per tonne of CO2. 

Latvia, too, CO2 is priced at 12 euros per tonne.

The tax is planned to increase on yearly basis so that industries as well as individuals- drivers, renters and homeowners have to pay more year after year for fuel, heating oil or gas.

Complete combustion of one liter of petrol produces 2370 grams of CO2. 

A car with an average consumption of 5.5 liters/100 km produces 13,035 grams (5.5 x 2,370g) of carbon dioxide over 100 kilometers. 

This calculation results in the following formula for converting consumption values into CO2 emission values for petrol engines: 

Consumption in litres/100km x 23.7 = CO2 in g/km.

Consequences of the CO2 tax for companies

Companies that cannot avoid emitting CO2 based on the nature of their business, can purchase certificates that give them a pollution right for emitting the greenhouse gases. The certificates are available through national emissions trading. They pass on the tax implication to consumers by way of building it in the prices.

Consequences of the CO2 tax for drivers and commuters

For motorists and commuters, the CO2 tax is noticeable in the form of higher fuel costs. the price of petrol increases by around 8.5 cents per liter. For diesel, the price increases by 9.5 cents per liter.

Consequences of the CO2 tax for tenants and landlords

Companies in the energy industry also pay the CO2 tax, which means that heating costs also increase. Until recently, landlords were able to pass on the additional costs incurred to the tenants through the service charge bill. For tenants of an average apartment, this means additional expenses of 25 to 125 euros in 2022 depending on the heating use.

As the new year dawns, at a price of 30 euros per ton of CO2 (in Germany and Austria), the price increases for energy sources are expected to be as below:

Petrol: About 8.5 cents per liter

Diesel: About 9.5 cents per liter

Fuel oil: About 9.5 cents per liter

Natural gas: About 0.65 cents per kilowatt hour

The CO2 tax has both advocates and opponents, because taxing harmful greenhouse gases has advantages and disadvantages.

Advantages:

Those who cause high emissions are asked to pay directly – those who do not behave in a climate-friendly manner pay extra. The CO2 tax thus promotes climate-friendly behavior.

Behavior that protects the environment is indirectly rewarded by not having to pay an additional tax. Anyone who occasionally rides their bike to work instead of driving their car benefits indirectly every day.

Disadvantages:

The tax burden is most developed European countries is high even without a CO2 tax. This tax burden already includes environment-related taxes, which have not yet solved the climate problem.

The CO2 tax can only partially prevent excessive emissions of greenhouse gases. It is questionable whether the introduction of the tax will really lead to a change in behavior or whether the surcharge will simply be paid.

https://www.handelsblatt.com/finanzen/steuern-recht/steuern/co2-preis-was-die-co2-steuer-fuer-verbraucher-bedeutet/26228322.html