Multiple benefits of renovation in buildings - PU Europe

Multiple benefits of investing in energy
efficient renovation of buildings
Table A.8 Pre and post tax price of electricity
EUR/MWh 2020 2030
Pre tax price of electricity 121 120
Post tax price of electricity 141 141
Note: Post tax price of electricity is measured as an average of household, service and industry use.
Source: DG Energy (2010)
For excise duties on heat consumption, we use the excise duties in Germany. Again there
are differences within countries. We use the German tax rate as it is a little higher than an
average EU country. This implies that we overestimate the loss of tax revenue to a little
extent. Including the VAT and the assumed share of input in European heating, we find
that the average tax on heating input for business use is €0.96 per GJ, and €1.23 per GJ
for non-business use, cf. Table A.9.
Table A.9 Excise duty on heating input
€ / GJ Business use VAT Non business use VAT
Natural gas 1.14 0.19 1.53 0.19
Coal 0.3 0.19 0.3 0.19
Average 0.96 1.23
Source: DG TAXUD (2012)
Based on these tax rates and the reduced energy consumption implied by the two energy
efficiency scenarios, we estimate that European governments stand to lose €5.2 billion
annually in the low EE scenario and €7.2 billion annually in the high EE scenario in 2020,
cf. Table A.10.
Table A.10 Tax revenue lost from reduced energy consumption,
2020
2012-2020
Reduced consumption
- Low EE scenario
(Mtoe)
Reduced energy tax
income (bn €)
Reduced consumption
- High EE
scenario (Mtoe)
Heating 53.5 2.5 80.8 3.9
Electricity 11.3 2.7 14.2 3.4
Sum 65 5.2 95 7.2
Note:
These estimates do not include the rebound effect
Source: Copenhagen Economics based on DG TAXUD (2012), and DG Energy (2010).
Reduced energy tax
income (bn €)
If investments are continued towards 2030, the annual loss of tax revenue will be increased
by €4.6 billion or €6.6 billion in the two scenarios respectively, cf. Table A.11.
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