Key data
| Regulation | Decision 202/25/COL of the EFTA Surveillance Authority |
|---|---|
| Publication | 26 March 2026 |
| Entry into force | 10 December 2025 |
| Affected parties | Waste incineration installations covered by the EU ETS operating in Norway |
| Category | European Regulation / State Aid / Environmental Taxation |
| Territorial scope | Norway (European Economic Area) |
| Official reference | CELEX:E2025C0202 — [2026/740] |
Waste incineration companies covered by the EU Emissions Trading System (EU ETS) operating in Norway will not have to pay the special excise duty on waste incineration. Decision 202/25/COL of the EFTA Surveillance Authority, adopted on 10 December 2025, authorises Norway to maintain this exemption in full compatibility with the state aid rules of the European Economic Area.
The central argument is clear: these installations already bear the cost of carbon through the emissions market. Imposing an additional specific levy on incineration would amount to charging them twice for the same CO2 emissions. The decision eliminates that duplication and reduces the tax burden on the affected installations.
What does this regulation establish?
Decision 202/25/COL formally authorises Norway to maintain exemptions from the special excise duty on waste incineration for companies participating in the EU ETS. The key elements of the decision are:
- Waste incineration installations covered by the EU ETS in Norway are exempt from the special excise duty on incineration.
- The justification is to avoid double taxation: these companies already pay for their CO2 emissions through the European carbon market.
- The EFTA Surveillance Authority concludes that the exemption is compatible with the state aid rules applicable in the European Economic Area.
- The decision is relevant to the EEA internal market and sets a precedent on how to structure national taxes when companies already participate in the EU ETS.
The EFTA Surveillance Authority is the body equivalent to the European Commission for EEA countries that are not EU members (Norway, Iceland and Liechtenstein). Its function is to ensure that state aid in these countries is compatible with the rules of the European internal market.
Economic and operational impact
The direct impact of this decision is a reduction in the tax burden for waste incineration installations in Norway operating under the EU ETS. By being exempt from the special excise duty, their cost structure improves and their competitive position is strengthened relative to equivalent installations in other countries that do bear this additional levy.
From an operational standpoint, the effects are as follows:
- Reduction in tax costs: The affected installations no longer pay the special excise duty on incineration, reducing their overall tax burden.
- Improved competitiveness: By not bearing double taxation, these companies can operate on more comparable terms to those in other European markets where the EU ETS already acts as the sole carbon pricing mechanism.
- Legal certainty: The formal authorisation by the EFTA Surveillance Authority removes uncertainty over whether the exemption could be challenged as incompatible state aid.
- Regulatory precedent: The decision may influence how other EEA countries design their environmental taxes in relation to the EU ETS, opening the door to similar exemptions in Iceland or Liechtenstein.
Who is affected?
This regulation directly and indirectly affects the following profiles:
- Waste incineration installations in Norway covered by the EU ETS: these are the direct beneficiaries of the tax exemption.
- Spanish companies with operations in Norway in the waste management or energy recovery sector: they should verify whether their installations are covered by the EU ETS and whether they can benefit from the exemption.
- European corporate groups with subsidiaries or stakes in incineration installations in the European Economic Area: the precedent may affect their tax and regulatory planning.
- Tax and legal advisors working with clients in the waste, energy or environmental sector with a presence in EEA countries.
- CFOs and financial directors of companies in the sector who need to review their tax exposure in Norway or in other EEA countries where this model could be replicated.
Practical example
A Spanish company in the waste management sector has a subsidiary in Norway operating a waste incineration plant with energy recovery. This installation is covered by the EU ETS and therefore already acquires CO2 emission allowances on the European carbon market to cover its annual emissions.
Before Decision 202/25/COL, this subsidiary bore two tax burdens on the same emissions: the cost of EU ETS emission allowances and the Norwegian special excise duty on waste incineration. With the authorised exemption, the subsidiary is relieved of the second levy. The result is a direct reduction in its tax burden and an improvement in its operating margin in Norway.
Additionally, the Spanish parent company can use this precedent as a reference in its tax planning analyses for other EEA operations, particularly if it is evaluating expansion to Iceland or Liechtenstein, where the same reasoning could apply in the future.
What should companies do now?
- Identify whether they have incineration installations in Norway: Review whether any subsidiary, investee or own installation operates in Norway in the waste incineration sector.
- Verify inclusion in the EU ETS: Confirm whether those installations are formally covered by the EU Emissions Trading System, an essential requirement to access the exemption.
- Review the current tax situation: Check whether the installation is currently paying the special excise duty on incineration in Norway and whether the exemption is already being applied or whether it needs to be formally requested from the Norwegian authorities.
- Consult a legal advisor specialised in EEA law: Since the decision comes from the EFTA Surveillance Authority and not from the European Commission, its practical application requires specific knowledge of the Norwegian and EEA legal framework.
- Analyse the precedent for other operations: If the company has or is evaluating operations in other EEA countries (Iceland, Liechtenstein), assess whether this precedent may be relevant to its tax and regulatory planning.
Frequently asked questions
Which companies are exempt from the special excise duty on waste incineration in Norway?
Waste incineration installations that participate in the EU Emissions Trading System (EU ETS) and operate in Norway. The exemption prevents these companies from paying twice for the same CO2 emissions: once through the carbon market and again through the special excise duty.
When did the exemption from the waste incineration tax in Norway come into force?
Decision 202/25/COL of the EFTA Surveillance Authority was adopted on 10 December 2025, which is also the date of entry into force. It was published on 26 March 2026.
Does this regulation affect Spanish companies?
Yes, indirectly. Spanish companies with waste incineration operations in Norway covered by the EU ETS benefit from the exemption. Furthermore, the decision establishes a relevant precedent on the compatibility of state aid with environmental regulation in the European Economic Area.
Why does the EFTA Surveillance Authority authorise this exemption as compatible state aid?
Because EU ETS companies already bear the cost of carbon through the emissions market. Applying the special excise duty on incineration on top of that would constitute double taxation on the same CO2 emissions. The decision concludes that the exemption is compatible with the state aid rules of the European Economic Area.
What precedent does this decision set for the EEA internal market?
Decision 202/25/COL sets a precedent on how national taxes on emissions should be structured when companies already participate in the EU ETS, avoiding double taxation. It has direct relevance for the internal market of the European Economic Area and may influence similar decisions in other EEA countries.
Official source
View full regulation at official sourceDisclaimer: This article is for informational purposes only and does not constitute legal advice. For specific decisions, please consult a qualified professional. Source: https://eur-lex.europa.eu/./legal-content/AUTO/?uri=CELEX:E2025C0202