Carbon emissions taxes: how they work in Spain and the EU

Carbon emissions taxes (or carbon taxes) put a price on greenhouse gas pollution to accelerate the transition to a low-carbon economy. In practice, that price can arrive through two routes: a direct tax per tonne of CO₂ equivalent, or a market for emission allowances. This guide explains how it actually applies in Spain and the European Union in 2026.

What is a carbon emissions tax?

It is a charge on activities that emit CO₂ and other greenhouse gases. By assigning a cost to every tonne emitted, it seeks three effects:

1. Discouraging the burning of fossil fuels and the most polluting production.
2. Encouraging clean technologies and investment in renewable energy.
3. Raising revenue for mitigation and adaptation policies.

It is worth distinguishing it from an allowance market: a tax fixes the price and lets the quantity of emissions vary; an emissions trading system (ETS) fixes a quantity cap and lets the market set the price of allowances.

Is there a carbon tax in Spain?

Spain has no general, uniform tax on every tonne of CO₂ across the whole economy. The price of carbon arrives mainly through the European allowance market and through specific energy-related taxes:

• The excise duty on hydrocarbons, which taxes fossil fuels.
• The tax on the value of electricity production (IVPEE), at a rate of 7%.
• The tax on fluorinated greenhouse gases, for refrigerants and other gases with high warming potential.

In addition, the autonomous communities have created their own taxes on polluting emissions to the atmosphere, which creates territorial differences.

The carbon price in the EU: EU ETS, ETS2 and CBAM

The emissions trading market (EU ETS)

The main European instrument is the EU Emissions Trading System (EU ETS). It sets a cap on emissions for large industrial installations, power generation and intra-European aviation. Companies need emission allowances to cover what they emit, and can buy or sell them. That cap falls year after year, so the cost of not decarbonising tends to rise.

ETS2: buildings and road transport from 2027

The EU has approved a second system, ETS2, which will price the CO₂ from fuels used in buildings and road transport. It is due to start operating in 2027, with the option of delaying it to 2028 if energy prices are exceptionally high. Unlike the EU ETS, the cost will fall on fuel suppliers and be passed through to final prices.

CBAM: the carbon border adjustment

To prevent carbon leakage, the EU applies the Carbon Border Adjustment Mechanism (CBAM), which from 2026 enters its definitive regime and requires payment for the embedded emissions of certain imports (cement, iron and steel, aluminium, fertilisers, electricity and hydrogen). We cover this in our guide to CBAM in 2026.

Economic and social impact of the carbon price

Effect on business competitiveness

Energy-intensive sectors (cement, steel, refining, chemicals) face higher costs, but also a strong incentive towards efficiency and new low-impact markets:

• Incentive for efficiency: as fossil fuels become more expensive, the return on investing in cleaner processes improves.
• New opportunities: demand grows for products with a lower carbon footprint.

Impact on consumers

The carbon price can raise the cost of energy and some goods. Its effects are usually cushioned with reliefs for vulnerable households and by promoting alternatives such as solar self-consumption or electric mobility.

International trends

Carbon pricing is spreading beyond Europe. Countries such as Chile, Mexico, Canada, Japan and South Korea apply carbon taxes or emissions trading systems, and China operates a national allowance market. The global direction is clear: those who fail to cut emissions pay more.

Frequently asked questions

Is the EU ETS a tax?

Not exactly. It is a market for emission allowances with a quantity cap; the price is set by the market, not by a tax rule. Its practical effect, however, is to put a price on carbon.

What changes with ETS2?

It extends the carbon price to fuels used in buildings and road transport from 2027 (possibly 2028), affecting heating and motor fuels.

Who does CBAM affect?

EU importers of products such as steel, aluminium, cement, fertilisers, electricity and hydrogen, who from 2026 must account for embedded emissions.

To get ahead of the cost of carbon, the first step is to measure your emissions rigorously: Manglai's carbon footprint solution gives you the data to manage your exposure to the EU ETS, ETS2 and CBAM.