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Denmark confirms plan to raise diesel tax from 2025

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Ritzau/The Local - [email protected]
Denmark confirms plan to raise diesel tax from 2025
Diesel (shown here at a very cheap price in 2020) is set to be subject to higher taxes in Denmark from 2025. Photo: Henning Bagger/Ritzau Scanpix

The government wants to raise the tax on diesel by 50 øre (0.5 kroner) from 2025, Minister for Climate, Energy and Utilities Lars Aagaard confirmed on Thursday.

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“We’ve listened to the wishes of the other parties. The diesel tax will play a larger role than it did in our original proposal,” Aagaard said after presenting the government’ ambition to colleagues from other parties.

The government estimates that the tax could cut CO2 emissions by 0.5 million tonnes.

Drivers of private vehicles will be compensated for the higher diesel tax through a reduction of the so-called udligningsafgift, an additional road tax paid by owners of diesel cars.

“So for Danes who have a diesel car, it will be a little more expensive overall to fill the fuel tank, but cheaper to own the car,” Aagaard said.

The government also wants to compensate businesses which face higher costs as a result of the diesel tax but has not given specific details on this.

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The average motorist will pay 700 kroner less on the additional diesel road tax, according to the ministry. The tax will continue to fall in 2025 and 2026, giving a further annual saving of 300 kroner on average.

A diesel tax has been backed by the Danish Council on Climate Change (Klimarådet), environmental organisations and the motorists’ association FDM.

Green thinktank Concito has meanwhile advocated an increase to the diesel tax by 50 øre, the same amount now planned by the government.

Of the three parties in the coalition government, only the Moderates had made their position on the diesel tax raise clear prior to Thursday. Leader Lars Løkke Rasmussen said in August his party supported it, but not clear statement had been made by the Liberals or Social Democrats.

Aagaard, who is from the Liberal party (Venstre), said his partied had “moved” on the question.

“I therefore hope we can land a broad agreement on this,” he said.

A so-called “mixture requirement” or blandingskrav in Danish for biofuels is retained in the proposal. However, a targeted total emissions reduction through the proposal of 0.5 tonnes has been cut back to 0.2 tonnes.

“We are doing that because there has been a desire from several parties for more reductions in 2025. This is a means to that,” Aagaard said.

The minister was unable to provide a timeline for when the tax change will be tabled in parliament.

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