Overview

Description

Not Specified

Recent Developments

Israel's carbon tax implementation ramped up in 2025, applying gradually to fuels like coal, natural gas, and oil via excise tax adjustments, not directly raising petrol/diesel prices but internalizing carbon costs, with rates increasing yearly towards 2030 to align with climate goals, supported by government grants for industry adaptation. In essence, 2025 marked the operational start of Israel's long-term carbon pricing plan, integrating it into existing tax structures to internalize emissions costs across key sectors.?In 2025, the carbon tax has different rates depending on the fuel type, ranging from? €9 per ton for natural gas to €318 per ton for fuel oil.

Coverage

The excise tax rates in 2024 (prior to the new tax) per ton of fuel for coal, natural gas, LPG, heavy fuel oil with up to 0.5% sulfur, heavy fuel oil with up to 1% sulfur, and petcoke stood at 115, 19, 134, 17, 17 and 51 NIS, respectively. According to the new legislation, these are set to gradually increase from 2025 to 2030, reaching 515, 192, 658, 951, 2,028 and 783 NIS (2024 prices) per ton in 2030, respectively.

Pricing and Allocation Approaches

An industrial adaptation support scheme based on a 2022 baseline, with a 2.1% annual reduction. 

Compliance Approaches

Ongoing 

Relation to Other Compliance CPIs

Fuel Excise Duty (Imposition of Excise Duty) Order (Amendment No. 2 and Temporary Order No. 2) Order, 2024 

Covered Sectors

No eligible activities specified for this instrument.