Rising power costs after Russia’s invasion of Ukraine hit households arduous, particularly low-income households. Though costs have stabilised considerably, power payments are nonetheless a burden for a lot of.
Taxes make up a big a part of fuel and electrical energy prices, and these range broadly throughout Europe. Some international locations supply subsidies or allowances to assist households. In these circumstances, taxes may even seem as unfavourable values.
So, how a lot of your power invoice goes to taxes — together with power taxes, levies, and VAT? During which international locations do folks pay essentially the most in complete taxes? And the place do governments step in with subsidies or assist schemes?
The Family Vitality Worth Index (HEPI), compiled by Energie-Management Austria, MEKH, and VaasaETT, tracks residential electrical energy and fuel costs in European capital cities. Moreover power and distribution prices, the breakdown exhibits power taxes and VAT.
As of April 2024, the common share of complete taxes in family electrical energy costs throughout EU capitals was 22% — made up of 8% power taxes and 14% VAT. This share ranged from -26% in Amsterdam to 49% in Copenhagen, adopted by 41% in Stockholm. The typical for EU capitals stands at 22%.
Detrimental tax in Amsterdam and Luxembourg Metropolis
In Amsterdam, power taxes stood at -43%, whereas VAT was 17%, leading to a major unfavourable total tax share. Excluding this impact, VAT accounts for 17% of the value breakdown.
In line with the HEPI report, since January 2020, a typical client in Amsterdam pays zero power tax because of the elevated quantity of tax credit score, which exceeds the indicated power tax quantity. Quite the opposite, they obtain a refund on the exceeding tax credit score quantity. The purpose is to encourage electrification and a shift away from fuel heating and home equipment.
The same case is seen in Luxembourg Metropolis, the place power tax is -13% and VAT is 7%. The coverage there goals to stabilise costs at 2022 ranges.
In Valletta, Nicosia, and Dublin, the share of taxes in electrical energy payments can also be comparatively low — 11% or much less.
Moreover the 2 Nordic capitals, the share of complete taxes exceeds 30% in a number of different cities, together with Brussels (37%), Berlin (34%), Oslo (33%), and each Madrid and Helsinki (32%).
Fuel taxes exceed electrical energy taxes in EU capitals
For residential end-user fuel costs, the common share of taxes throughout EU capitals is 28%, which is greater than for electrical energy. It ranges 5% in Zagreb to 49% in Amsterdam.
Within the Dutch capital, power tax for a residential pure fuel person makes up round 32% of the end-user worth.
Residents in Berlin (40%), Vienna (32%), Rome and Stockholm (each 31%), and Paris (30%) face the very best complete fuel taxes, after Amsterdam.
In distinction, following the Croatian capital, Athens (9%), Belgrade (9%), and London (11%) recorded the bottom total tax shares in residential fuel costs.
In Vilnius, a typical family receives a tax refund on power, leading to a unfavourable power tax share of -5%.
Key components behind power tax variations
“Vitality taxes rely on nationwide insurance policies, environmental plans and completely different market buildings typically,” Rafaila Grigoriou, HEPI undertaking supervisor & head of VaasaETT’s Greek workplace, and Ioannis Korras, senior power market analyst at VaasaETT, advised Euronews Enterprise.
For instance, they famous that Denmark has utilised excessive power taxes as a instrument for the inexperienced power transition, subsidising renewable power techniques (RES) funding and selling power effectivity, making the nation a frontrunner in wind power.
The function of nationwide insurance policies in power taxation is very clear in some circumstances. Grigoriou and Korras emphasised that buyers in Amsterdam pay the very best taxes on pure fuel in Europe, pushed by a nationwide local weather coverage geared toward decreasing fuel consumption. Quite the opposite, households obtain a major tax rebate on their electrical energy payments.
“That is meant to incentivise a shift away from fuel heating and promote electrification,” they added.
Tax shares vs nominal prices
When evaluating cities or international locations, it is necessary to differentiate between the share of taxes in power payments and the precise quantity paid. These are completely different indicators, as the full tax quantity depends upon the underlying power worth.
For instance, the tax share for electrical energy is 21% in each Rome and Budapest. Nonetheless, this does not imply customers pay the identical in absolute phrases. In Budapest, 21% equals 1.92 c€/kWh, whereas in Rome, it quantities to six.8 c€/kWh — a major distinction.
Electrical energy and fuel costs throughout Europe
Family end-user electrical energy and fuel costs differ considerably throughout Europe.
In line with HEPI, in April 2025, electrical energy costs ranged from 9.1 c€/kWh in Budapest to 40.4 c€/kWh in Berlin. The fuel costs various from 2.5c€/kWh in Budapest to 34.1 c€/kWh in Stockholm.
When evaluating power costs, it is also necessary to think about buying energy requirements (PPS). Our article, “Electrical energy and Fuel Costs Throughout Europe,” takes a more in-depth have a look at costs each in nominal phrases and PPS-adjusted values, and explains why these can differ considerably throughout international locations.