Denmark’s parliament on Wednesday adopted a reduction of electricity tax to the lowest permitted amount throughout 2026 and 2027. How much will it save the average household?
The current electricity tax of 72.7 øre per kilowatt-hour will be cut to 0.8 øre per kilowatt-hour, the EU’s minimum rate, in both 2026 and 2027.
The cut, which was first announced by the government earlier in the year, has now been adopted by parliament, making it effective throughout the next two years from January 1st.
It means cheaper bills for customers because the tax is a flat rate added to the unit price of electricity. The unit price can fluctuate due to factors like the weather, season and time of day.
In addition to the unit price and taxes, consumers also pay a transport fee for receiving the electricity as part of their final bill.
A “typical” family with two adult full-time employees and two children who live in a detached house stand to save up to 4,000 kroner in reduced energy bills, according to the government’s own calculations.
A retired couple, whose consumption would be lower, will see their bill cut by about 2,700 kroner, the same calculations show.
“It has become expensive for many Danes to make ends meet when they go shopping. So by slashing the electricity tax, we are taking a significant and noticeable first step to help the many Danes who are struggling with rising prices,” Tax Minister Ane Halsboe-Jørgensen said in a statement on Wednesday.
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People who have higher levels of energy consumption are likely to make the biggest savings under the scheme.
The Confederation of Danish Industry (DI) welcomed the move by the government, saying that it will benefit lower income homes.
“The tax takes up a relatively large share of the budget for those who have the least, so a reduction in the electricity tax will actually increase financial equality in society,” DI’s head of tax Jacob Bræstrup told news wire Ritzau in a written comment.
“DI hopes that parliament will agree within the next two years that electricity tax should not be reintroduced, but remain at the EU’s minimum rate,” Bræstrup added.