Treasury enters an ‘extra’ for CO ₂ of 1,000 million in full electrical chaos

The Government has recognized an item of 2,246 million for the auctions of emission rights in 2021, an injection that has raised the total collection at the expense of the energy sector to 14,150 million

The Ministry of Finance has verified what was an open secret. The Government will pocket this year more than 2,246 million for the auctions of _CO2 emission rights in the midst of electrical chaos. The figure translates into an extra income for the public coffers of more than 1,000 million compared to last year, when this item barely touched 1,156 million, which in relative terms means shooting up the Government’s tax revenues by 94.3% only as a result of the increase in the cost of CO₂ .

Precisely the increase in revenues due to the rise in carbon was the cause of the great confrontation between the Government and the largest electricity companies in the country, after the Executive took forward in Congress the proposal of the Ministry for the Ecological Transition, with Teresa Ribera at the helm, to confiscate the excess remuneration of these companies because of the increase in CO₂ . The measure was left on paper, but the rise in emission rights has brought a millionaire benefit to the public accounts.

This injection of more than 2,200 million has been decisive when it comes to raising the collection at the expense of the energy sector. In sum, the Government has entered 14,150 million for the fiscal contributions of this segment, not including VAT and counting on the benefit of carbon emission rights. This is reflected in the official information on budget execution that is updated every month by the Ministry of Finance. The figure has been included in the last available report, corresponding to last November, so the collection at the end of December could be even higher.

In a desgranada way, the execution data published by the ministry directed by María Jesús Montero have emerged an income of 9,514 million for the import of hydrocarbons, compared to 8,597 million in 2020. The reduction of the Special Tax on Hydrocarbons (IEH), which taxes the manufacture and import of gas, has been one of the clamors of the gas sector in its negotiations with the third vice president. The Government has resisted touching this tax, despite the persistence of a runaway market where the average price of gas has quadrupled, to stand at 42.78 euros per megawatt hour compared to 9.40 euros / MWh a year ago.

Treasury will enter 14,150 million for the fiscal contribution of the energy sector, in a year in which the confrontation between the Government and the large electricity companies has marked the political course

The snapshot offered by the Treasury on November 30 gives an account of the cut in collection that has meant the activation of the fiscal shield for electricity consumers, an oxygen balloon that the Government has extended until next April 30. Thus, the State has entered 1,070 million for the electricity tax, 70 million less than last year. The public coffers have also scored 1,203 million, from the tax on the production of electrical energy and the tax on the storage of nuclear fuel, compared to the production of electrical energy and the storage of nuclear fuel.

To the items already reported must be added the VAT revenue on electricity and gas. The Government approved the reduction of the VAT rate applicable to the electricity bill from 21% to 10%. As for the second, the Executive has chosen to keep it at 21%. The Treasury report does not disaggregate this tax, which makes it impossible to quantify the contribution of the energy sector to the total. Overall, the Treasury has raised the collection of this tax from 25,560 million to 35,000 million in a year.

The crisis of the electricity market has marked the political course. Proof of this is the enthusiasm with which the President of the Government, Pedro Sánchez, reaffirmed his promise to match this year’s electricity bill to that of 2018. Sánchez echoed the arithmetic mechanism that has allowed the Executive to insist on this mantra during the last months, which is none other than applying the current inflation data to the 608 euros of the average electricity bill that Spaniards paid in 2018. This arithmetic supports the promise of the Government, but do not sew the broken that the escalation of the light opens to the 11 million consumers welcomed to the regulated market -the famous PVPC- who, despite the mathematics of the tenant of La Moncloa, will pay “something more” for the light than three years ago, as Sánchez himself acknowledged.

Source: La Información