Minister of Finance Steingrímur J. Sigfússon decided yesterday to cancel plans for a carbon tax on electrodes and mineral substances in solid form which was supposed to increase the income for the state in 2013. The move was highly disputed.
Steingrímur J. Sigfússon. Photo by Páll Kjartansson.
Steingrímur met with officials from the Ministries of Finance and Industry along with representatives of the Confederation of Employers and large-scale industrial companies yesterday to discuss the matter, Fréttablaðið reports.
After the meeting the minister announced that he had decided to cancel the plans but instead the government and companies will jointly work on adopting the European Union Emissions Trading Scheme (EU ETS).
According to Fréttablaðið’s sources from within the Left-Green Movement’s parliamentary party, Steingrímur thought it better not to cause a dispute with the Social Democrats about this issue, given the current difficulties the coalition is facing.
In their criticism of the planned carbon tax, the representatives of large-scale industrial companies in Iceland stated that it would have caused the standard of their operational environment to drop below that of the countries to which Iceland is usually compared.
They pointed out that in other countries no such tax is paid, reasoning that they have to pay enough tariffs through buying carbon quota when Iceland becomes a full member of the EU ETS in 2013.
Click here to read more about the disputed tax.