The Swedish Tax on Nitrogen Oxide Emissions

Sweden was facing a serious soil acidification and water eutrophication problem caused partlyby emissions of nitrogen oxides (NOx) from combustion processes in transport, industry andpower.  In 1992, Sweden introduced a high tax on NOx emissions from large combustion sources (e.g.power plants, industrial plants, waste incinerators). The tax was accompanied by a refundaccording to the amount of energy generated. This ensures that facilities with low NOx emissionintensitites are net beneficiaries of the scheme. Continuous monitoring of emissions was alsomade mandatory. The tax was designed to accelerate and stimulate investment in advancedcombustion and pollution-abatement technologies and as a supplement to existing regulatorymeasures.

OECD Environment Policy Papers

The Swedish Tax on Nitrogen Oxide Emissions

Lessons in Environmental Policy Reform