The income of CO2 allows lowering the tax on light without generating imbalances

The income of CO2 allows lowering the tax on light without generating imbalances

The Executive calculates that the loss of 1,000 million to remove the tax of 7% is offset by the high cost of polluting 

   If the accounts of the Minister of Ecological Transition go well, the announced suppression of the tax to the generation to reduce the electricity bill will achieve its first objective, that of attenuating the escalation that keeps the receipt for several weeks; and at the same time, not putting the million-dollar deficit of the electric system at risk, in order to maintain the rest of the bill without upward changes, which would ultimately affect consumers. The first consequence of the measure proposed by Teresa Ribera before the Congress has a direct effect on the collection. Because the State will stop entering about 1,000 million euros.

  That is the calculation made by the Minister of Finance, María Jesús Montero, to reflect the loss of public revenues due to this suspension of a tax whose levy on the production of power plants (nuclear, coal, combined cycle, hydroelectric and all renewable) will be close to 0% as soon as it is approved by the council of ministers, possibly next week. Aware of the situation of budget execution and that the eyes of Brussels look closely at any movement in the public coffers -even under supervision due to excessive deficit-, Montero clarified on Thursday that this decrease "will be corrected with other budget items."

It is not that the Treasury is going to increase the collection for other taxes or that measures of spending cuts are applied, as they clarify from that Ministry. It will be achieved "through income", say these sources. In reality, the State has a circumstance, at least temporary, with which the Treasury is making more cash than expected during this year. Specifically, the sales of the rights to emit carbon dioxide (CO2) could contribute at the end of the year about 1,300 million compared to the 370 million originally planned in the current State Budgets. In addition, as the costs of producing electricity grow (due to CO2 and the fuels used in many power plants), revenues are indirectly increased by other concepts such as hydroelectric or nuclear fees.

The State has a margin of around 1,000 million euros, coming from a higher collection of the budgeted derivative of the CO2 market, which it has been able to use to minimize the Generation Tax. Moreover, the Government knows that this source of money will not be reduced in the remainder of the year "because the current price of CO2 is the one that has been marked by all States with the approval of the European Union to pollute," sources from the sector explain. .

Avoid more rate deficit
At the beginning of 2018, the price of the CO2 right was trading at just over five euros per tonne negotiated; and now it is paid for this concept almost 22 euros, with the corresponding revenues for the public coffers increased exponentially. "Community authorities have cut the volume of rights to consciously negotiate to raise its price," say energy experts. In fact, the futures of this market do not rule out that the cost of CO2 will rebound up to 30 euros / MT. If this were the case, public revenue for this concept would amount to 2,000 million euros. Thus, the collection in this way would greatly exceed the bleeding of money that would be lost by suspending the tribute.

What the Government can not afford is that the electricity deficit should reboot - the difference between the income and the expenses of the system. Annual costs (distribution, transport, premiums on old renewables, etc.) are around 18,000 million. In fact, the National Commission of the Markets and the Competition (CNMC) foresees for 2018 a minimum surplus of 1.9 million.

If the Ecological Transition saw the deficit due to the reduction of the generation tax, it would have to act in other ways such as tolls (fixed costs of the invoice), payments for capacity, the fees to the hydraulic or the rates to the waste generated by the nuclear

All the voices of the Executive insist that with the measure proposed by Teresa Ribera they show their sensitivity to the reality that households go through with the price of light. In any case, they will remain "vigilant" so that the practical disappearance of the tax really affects the bill.

In the absence of a week for the end of the month, the prices of the daily wholesale market - the one that marks the consumption part of the monthly receipts - remains at high levels, with an average higher than 70 euros / Mwh, the most important face of the whole year. September will be, predictably, the most expensive period of 2018.