Norway currently levies the highest carbon tax rate at €146.23 ($169.71) per ton of carbon emissions, followed by Sweden (€133.17, $154.55) and Switzerland and Liechtenstein (both €129.09, $149.81). The lowest carbon tax rates can be found in Poland (€0.09, $0.11) and Ukraine (€0.59, $0.68). The average carbon tax rate among the 24 European countries was €53.63 as of April 1, 2026.
Carbon taxes can be levied on different types of greenhouse gases, such as carbon dioxide, methane, nitrous oxide, and fluorinated gases. The scope of each country’s carbon tax differs, resulting in varying shares of greenhouse gas emissions covered by the tax. For example, Spain’s carbon tax only applies to fluorinated gases, taxing only 2 percent of the country’s total greenhouse gas emissions. Albania, Andorra, Liechtenstein, and Luxembourg, by contrast, in principle cover 72 percent or more of their greenhouse gas emissions. However, exemptions and reduced rates often still compromise the collection efficiency of many carbon tax schemes below that.
All Member States of the European Union (plus Iceland, Liechtenstein, and Norway) are part of the EU Emissions Trading System (EU ETS), a market created to trade a capped number of greenhouse gas emission allowances. Except for Albania, Andorra, Serbia, Switzerland, Ukraine, and the United Kingdom, all European countries that levy a carbon tax are also part of the EU ETS. Switzerland has its own ETS, which has been tied to the EU ETS since January 2020. Following Brexit, the UK implemented its own UK ETS as of January 2021.
In several countries—for example, Andorra, Finland, France, Ireland, the Netherlands, Norway, and Portugal—the national carbon tax baseThe tax base is the total amount of income, property, assets, consumption, transactions, or other economic activity subject to taxation by a tax authority. A narrow tax base is non-neutral and inefficient. A broad tax base reduces tax administration costs and allows more revenue to be raised at lower rates. overlaps with the emission base also covered by the EU ETS, leading to harmful double taxationDouble taxation is when taxes are paid twice on the same dollar of income, regardless of whether that’s corporate or individual income. of the overlap. When national carbon taxes apply to emissions covered by an ETS, they tend to shift the emissions to sources outside of their tax base, leaving total emissions capped by ETS allowances unchanged.
Some countries apply multiple excise taxes or ETSs to sources of carbon emissions at different implicit or explicit tax rates. In these cases, the table below displays the highest applicable rate. Ideally, a carbon tax should apply to the carbon emissions of all sectors at the same rate.
Several European countries have introduced a carbon tax or an ETS in recent years. Germany and Austria implemented carbon taxes in 2021 and 2022, respectively. Germany phased its carbon tax into a national ETS in 2026, and both systems will automatically expire once EU ETS-2, the broader-based successor to the EU ETS, applies to the covered sectors. Additionally, Albania and Hungary implemented carbon taxes in 2022 and 2023, respectively, while Serbia introduced a new carbon tax in 2026. The autonomous region of Catalonia is considering a carbon tax at the subnational level, and Turkey is considering a national ETS.
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