Changing energy taxes - adapt your business and reduce costs
From 2025, a new green tax reform will come into force, which will bring significant changes to companies' energy taxes. The reform aims to reduce the consumption of fossil fuels by significantly increasing the CO2 tax. This means higher costs for many companies, but also changes in the reimbursement of energy taxes.
What does this mean for your business?
The changes primarily affect companies that are not covered by the CO2 quota regulation. This is over 95% of all Danish companies. From 2025, these companies will be reimbursed the full energy tax on energy used for process purposes, but in return they will have to pay an increasing CO2 tax that is linked to the use of fossil fuels - not directly to CO2 emissions.
Energy taxes in 2025
The rules for electricity are relatively simple. The tax is reduced to the EU minimum rate of 0.4 øre per kWh for energy used for process purposes, heating and hot water. However, special rules apply for charging electric cars.
For natural gas, oil, coal and waste heat, companies can only be reimbursed the energy tax on consumption for process purposes if certain conditions are met. The table shows the development of energy taxes from 2024 to 2025 and the new refund share:
| Energy type | Device | Tax 2024 | Tax 2025 | Reimbursement 2025 |
|---|---|---|---|---|
| Natural gas | Kr./nm3 | 2,726 | 1,369 | 1,369 |
| Stone coal | Kr./GJ | 68,800 | 34,600 | 34,600 |
| Gas and diesel oil | Kr./L | 2,469 | 1,241 | 1,241 |
| Electricity | Kr.kWh | 0,761 | 0,720 | 0,716 |
Note: There are special rules for CO2 quota regulated companies and when storing CO2 emissions. The special rules for companies in agriculture and horticulture have been removed.
The new CO2 tax
From 2025, the CO2 tax will be significantly higher. It will apply to all fossil fuel consumption - whether used for process purposes, heating or hot water.
The table shows the development:
| Energy type | Device | Tax 2024 | Tax 2025 | Reimbursement 2025 |
|---|---|---|---|---|
| Natural gas | Kr./Nm3 | 0,442 | 1,922 | 1,025 |
| Stone coal | Kr./GJ | 18,500 | 80,900 | 43,147 |
| Gas and diesel oil | Kr./L | 0,519 | 2,261 | 1,206 |
The reimbursement corresponds to 53.33% of the tax in 2025. This allowance will be phased out completely in 2030.
What does the tax change mean for businesses?
The rising carbon tax will affect industries very differently, especially as previous special rules will no longer apply.
Quick adaptation minimizes costs
The green tax reform has significant financial implications for businesses. While it is intended to encourage a transition to more climate-friendly solutions, businesses will need to adapt quickly to minimize rising costs. It is recommended that businesses carefully assess their energy consumption and explore opportunities to reduce dependence on fossil fuels.
More information
If you need advice or assistance regarding the new energy rates, you are welcome to contact Allan Dyring, VAT and tax advisor in inforevision's tax department. You can read more about us here.
Allan Dyring
VAT and tax advisor
T 39 53 57 49
