Tax regulation mechanism (absence of energy tax and CO2 tax)

• CO2 Tax Act
• Mineral oil tax law

Absence of energy tax on biomass
In Denmark, two tax mechanisms are levied on all fuels not used for electricity production. Fossil fuels are taxed for both their energy output in heat as well as the CO2 they emit when burned.
Biomass for heat production, however, is exempted from both taxes which makes it more economical as a fuel despite higher costs. (§1 Mineral oil tax law and §1(1) CO2 Tax Act). While this exemption has existed for a long time, it is currently politically debated whether to subject biomass to the energy tax (NECP Denmark, 2019).
Absence of CO2 tax on renewable fuels
All fossil fuels used for road transport, heating and process purposes are subject to a CO2 tax.

Absence of energy tax on biomass
Users of biomass for heat production
Absence of CO2 tax on renewable fuels
Users of renewable fuels for heat production

DTA