THEME

Economic Instruments - Charges and taxes

Differential Tax on Low Sulphur Oil - Brief Summary (Portugal)

Differential Tax on Low Sulphur Oil, Portugal

Achievements

Increased market share of low sulphur fuel oils, but the overall impact has been relatively small since ‘the Portuguese Electrical Company (EDP) which held...about 40 per cent of the total fuel oil market was exempt from the tax,' (Santos et al 1996, cited in Convery and Rooney 1998, pp49)
Low sulphur fuel oil remains more expensive than fuels with a higher sulphur content, thus ‘the main "take-up" of the low sulphur fuel oil has been among users such as combined heating and power and glass, where low sulphur oil is either essential or desirable,' (Santos et al 1996, cited in Convery and Rooney 1998, pp49)

Design
Since 1991 low sulphur fuel oil has been taxed at a lower rate than high sulphur fuel oils, and since 1994 taxation on the high sulphur fuel oil has been greater by a factor of 2 (Santos et al 1996, cited in Convery and Rooney 1998, pp49)

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