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Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for measure PT-2021-52/2875 – measures in Portugal

Freeze on the update of the carbon emissions tax addition

Suspensão da atualização da taxa do adicionamento sobre as emissões de CO2

Country Portugal , applies nationwide
Time period Temporary, 23 December 2021 – 31 December 2022
Context COVID-19, War in Ukraine, Green Transition
Type Legislations or other statutory regulations
Category Responses to inflation
– Support for fuel expenses
Author Ana Teixeira - CESIS
Measure added 14 September 2022 (updated 21 September 2022)

Background information

The Portuguese Government has issued a set of measures with the objective to support families and consumers in general, amidst the rising prices of fuel and other energy products, as a consequence of the COVID-19 pandemic and the further exponential increase in energy prices as a consequence of the war in Ukraine.

The present Ordinance is one of the several measures approved by the Portuguese Government to support citizens and families during the current period of rising energy and fuel prices.

The Law 82-D/2014, of 31 December, which approves the Reform of Green Fiscal Affairs, adds article 92 A, which determines that some fuel and energy products are subject to an addition on the emissions of CO2 (also known as carbon tax). This measure freezes the value of the tax addition, setting it to the value practiced in 2021.

Content of measure

The Ordinance 315/2021 of 23 December suspends the update of the tax addition on carbon emissions until 31 March 2022. This measure is extended by the Ordinance 118/2022 of 23 March, until 30 June 2022. This measure has additional extensions with the Ordinance 167-A/2022, of 30 June (extends measure until 31 August 2022), and Ordinance 217-A/2022 of 31 August (extends measure until 2 October 2022). On 5 September the Government announced that the suspension of the update of the tax addition on carbon emissions will continue until the end of the year (Government Press Release, 5 September 2022).

The measure maintains the 2021 tax addition on carbon emissions, in the value of €23,921 per ton of CO2, in the terms set by the Ordinance 277/2020, of 4 December. In practice, this measure avoids a rise of 5 cents per litter of fuel (both gasoline and diesel). The value of the addition tax is set annually on the basis of the prices of auctions of licenses of gas emissions of greenhouse effect, held within the framework of the European Commerce of License Emissions (Comércio Europeu de Licenças de Emissão (CELE)).

According to the newspaper Dinheiro Vivo this measure has a cost of €93 million, until the end of March 2022 (Dinheiro Vivo, 22 October 2021). Additionally, the extension of the measure until the end of the year will represent an effort of €537 million (Dinheiro Vivo, 6 September 2022).

Use of measure

No information to date.

Target groups

Workers Businesses Citizens
Does not apply to workers Does not apply to businesses Applies to all citizens

Actors and funding

Actors Funding
National government
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role No involvement No involvement
Form Not applicable Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • No involvement
  • Main level of involvement: N/A

Involvement

No involvement of any social partner organisations in the design, implementation and monitoring of the measure.

Views and reactions

Unknown.

Sources

Citation

Eurofound (2022), Freeze on the update of the carbon emissions tax addition, measure PT-2021-52/2875 (measures in Portugal), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/PT-2021-52_2875.html

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Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.