Tax strategies to reduce emissions in industry

Environmental taxation has become one of the main levers for industry to cut its emissions. It combines instruments that penalise pollution (the carbon price of the EU emissions trading market, the plastic tax or landfill charges) with incentives to invest in clean technologies (R&D&I deductions, IAE reliefs and energy-efficiency grants). This guide summarises the most relevant tax strategies for decarbonising industry without losing competitiveness.

The industrial sector is one of the largest emitters, because of its intensive use of fossil fuels and its chemical and thermal processes that are hard to electrify. That is why it concentrates much of green tax policy.

The main environmental challenges of industry

1. High CO₂ emissions: from combustion and the use of fossil-based electricity.
2. Intensive resource use: water, minerals and materials whose inefficient management degrades the environment.
3. Waste generation: some subsectors produce toxic or hard-to-recycle waste, which calls for a circular-economy approach.

The role of green taxation

Green taxation brings together the tax instruments and reliefs designed to internalise environmental costs (the polluter pays principle) and steer production towards a more sustainable model. In industry this translates into three broad groups of measures: taxes on emissions and pollution, charges on resource use and waste, and reliefs for clean investment.

The carbon price: EU ETS and CBAM

The EU Emissions Trading System (EU ETS)

Large European industrial installations (steel, cement, chemicals, refining, etc.) are subject to the EU Emissions Trading System (EU ETS), which puts a price on each tonne of CO₂ emitted and progressively reduces the number of available allowances. This pushes companies to invest in efficiency, electrification and carbon capture to lower their emissions bill.

The Carbon Border Adjustment Mechanism (CBAM)

Since 1 January 2026, the Carbon Border Adjustment Mechanism (CBAM) has been fully operational, taxing the carbon footprint of imports of emission-intensive products (iron and steel, aluminium, cement, fertilisers, hydrogen and electricity). Its aim is to prevent carbon leakage and level the playing field between European producers and importers.

Other taxes on pollution and waste

The plastic tax and landfill charges

The special tax on non-reusable plastic packaging (0.45 euros per kilo of non-recycled plastic) and the tax on the deposit of waste in landfills and incineration, both from Law 7/2022, raise the cost of the most polluting options and favour prevention and recycling. Companies with inefficient waste management take on costs that often exceed those of recycling.

Incentives for clean investment

Investment and R&D&I deductions

Corporate income tax provides for deductions for research, development and technological innovation, applicable to projects that develop less polluting processes or materials, optimise the supply chain or integrate technologies to measure and manage the carbon footprint.

Energy efficiency and self-consumption

• Support for investment in solar self-consumption, high-efficiency cogeneration and improving the energy efficiency of processes.
• IAE reliefs: some local authorities discount the Economic Activities Tax for industries that demonstrate emission reductions or technological improvements.

If your company is considering installing photovoltaics, we recommend reading tax incentives for installing solar power in your business. And to go deeper into support for green innovation, see tax credits for green projects.

Frequently asked questions

Is there a carbon tax in Spain for industry?

Spain has no single, general carbon tax like Sweden's or Germany's. Industry pays the carbon price mainly through the EU Emissions Trading System (EU ETS) and, since 2026, through the CBAM on imports; there are also taxes on fluorinated gases and other sector-specific instruments.

How can an industrial company reduce its environmental tax bill?

By investing in energy efficiency, electrification and renewables to emit less, by incorporating recycled material to reduce the plastic tax, and by making use of R&D&I deductions and IAE reliefs.

A change of paradigm for industry

Tax strategies to reduce emissions in industry balance environmental protection with the economic reality of companies. The key is to get ahead of the rules and understand green taxation as an opportunity to optimise costs and stand out. The first step is to measure: Manglai's carbon footprint platform helps industry calculate its emissions, identify areas for improvement and plan their reduction.