The CO₂ tax will become due: on approaching deadlines and a possible abolition
Although the national CO₂ tax was introduced in 2021, it has only started to actually generate revenues in the 2025 tax year. For the first time, companies subject to the tax may be required to make payments – definitely something to pay attention to on time. The trading market for dispensation rights closes on 31 August 2026 and returns must be submitted by 1 October 2026.
What is the Dutch CO₂ tax?
Since 1 January 2021, the Netherlands has had a national CO₂ tax for industry, applying to three types of installations:
- Industrial installations participating in the EU ETS;
- Waste incineration plants (WIPs);
- Nitrous oxide ( laughing gas) installations.
Companies pay a fixed rate per tonne of CO₂ emitted but they receive an exemption in the form of dispensation rights (DPRs), which exempt a portion of their emissions. The emissions minus the dispensation rights form the tax base, with the tax being due on the difference. On top of this, for installations that also fall under the EU ETS the set price of the surrendered EU ETS emission rights is deducted from the national rate. This prevents the same emissions from being taxed twice. Two options are available in the event of a shortfall: acquiring rights from companies with a surplus or paying the difference as a tax.
EU ETS Installations: tax over 2025 for the first time
The tax acts as a minimum price. For EU ETS installations, it will only become due if the national CO₂ rate exceeds the price of EU ETS emission rights. With the ETS price consistently exceeding the national rate from 2022 through 2024, the tax amounted to zero after offsetting and, on balance, nothing was payable.
The situation is different for 2025. The EU ETS price amounted to EUR 66.76 per tonne of CO₂, while the national rate was set at EUR 87.90 per tonne of CO₂. The difference of EUR 21.14 per tonne of CO₂ constitutes the effective tax for EU ETS installations. In addition, the number of available dispensation rights was below the total industrial emissions of approximately 41.1 million tonnes, thereby creating a taxable base.
Approaching deadlines: trading in dispensation rights and the return
Although dispensation rights may not be carried forward to the following year, companies liable for tax are permitted to trade them within the tax year. Only companies with a surplus of dispensation rights are permitted to offer them for sale.
For 2025, 78 installations have a surplus and 169 companies have a shortfall. Supply and demand sets the price of rights traded between companies. If the market price drops below EUR 21.14 tax per tonne, purchasing additional rights is more cost-effective than paying the tax. Conversely, companies with a surplus may generate revenues by offering their surplus rights on the CO₂ Tax Registry (CO₂-heffingsregister, or ‘CHeR’).
Dispensation rights may be transferred up to and including 31 August 2026, after which date this option will no longer be available. Each installation subject to the CO₂ tax has its own account in the CHeR, which makes it important to check this account at short notice and determine whether there is a shortfall or a surplus. Next, the return must be submitted and paid by 1 October 2026 at the latest.
Outlook: possible abolition and no tax for EU ETS installations in 2026
The future of the national CO₂ tax, for that matter, is under discussion. On 25 June 2025, the House of Representatives called on the government to abolish the CO₂ tax. In response to this, however, only the rate for EU ETS and nitrous oxide installations has been reduced from 2026 onwards. As this has caused the tax rate to drop below the EU ETS emission price, the tax payable by ETS installations will be zero for 2026. Unlike for waste incineration plants, to which this reduction does not apply. Their rate will actually increase towards 2030.
Abolition will only come into effect if approved by both Houses of Parliament, but as yet no bill to that effect has been tabled. The government is expected to provide further clarity on the future of the Dutch CO₂ tax at the upcoming Budget Day. Because the current obligations remain fully in force for now, you are advised to check your position in the CHeR in the short term, to be on time in deciding on the purchase or sale of dispensation rights, and to submit your return on time. Beware of two deadlines in particular: dispensation rights may be purchased or exchanged up to and including 31 August, and the return must be submitted and paid by 1 October 2026 at the latest.
Would you like to know what the CO₂ tax means for your organisation? Please feel free to contact us.
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