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General Government Budget Law (Fondo Verde)

legislation type Legislative
Passed in 2022
The 2022 budget law's article 15 creates within the state budget a Green Fund ("Fons verd") for the energy transition and the fight against climate change. It is aimed at helping plans or actions that could meet objectives set out in framework law 21/2018 (Litecc). The Green Fund is financed through 1) final taxes, including a carbon tax and a tax on vehicle ownership, 2) allocations from the general administration budget.

Andorra's 2022 NDC further specifies that:
  • "in the case of the consumption of hydrocarbons in heating, the Government has provided for a gradual green tax so that this does not mean a greater impact for families. Thus, despite the fact that it was expected that during 2022, and for average consumption, it would mean an increase of one cent per liter, which represents an increase of only 4 euros per year, its taxation has been postponed due to the energy context and current economic up to the year 2023.
  • as it is a final rate, it has served to lower the price of the monthly subscription to use public transport throughout the country. The measure entered into force on September 1, 2021, and thanks to the rate, as of this year 2022 it has been possible to offer national public transport free of charge, assuming an increase in user numbers of more than 100%. School transport fares have also been lowered, as well as other savings fares for the youngest.
  • in order for the green tax to have a direct impact on citizens, the budget item for the aid program to change or improve the diesel heating system for a more sustainable one that comes from renewable energy has also been increased. The aid has been up to 55% of the final budget for the renovation of the heating system.
  • lastly, this Green Fund also feeds an aid program aimed at promoting electric vehicles in the country, and it has been possible to expand its scope to logistics and transport vehicles, not only utility cars, in accordance with the Sustainable Mobility Strategy."


from the Grantham Research Institute
from the Grantham Research Institute
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