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An Exploration of Green Tax Incentives and Penalties

An Exploration of Green Tax Incentives and Penalties

The KPMG Green Index

An exploration of green tax incentives and penalties

July 2017

kpmg.com © 2017 KPMG LLP, a and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Contents

Foreword and About the KPMG Green Tax Index 04 The Index: country rankings 06 Indicator sources 12 Key findings 13 Appendices 104 Contact information 110

The following information is not intended to be “written advice concerning one or more Federal tax matters” subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230. The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 3 trademarks or trademarks of KPMG International. NDPPS 655445 Foreword and About the KPMG Green Tax Index

Why the Index and others, to provide a picture of the damage (not just as a result of carbon Increasingly, pervades effectiveness of various governmental emissions). also passed the decisions. In fact, the use on behavior, the scope of General for Climate Change of tax policy to drive green behavior environmental policies, the degree to (“Ley General de Cambio Climático”). continues to grow throughout the which environmental policies affect This law establishes an additional world. As of July 2017, 155 out of 197 environmentally harmful behavior, National Registry of Emissions (RENE) parties ratified the and the revenue generated from where entities with yearly emissions which chartered new grounds, environment-related policies. greater than 25,000 tons of CO2 bringing many nations into a common equivalents are required to report What did we find cause to undertake ambitious efforts annual emissions. Several regions of the world that did to combat climate change.1 In not previously focus on green tax Also, in 2016, ’s President addition, the Paris Agreement provides policy are now increasing launched Plan enhanced support to assist developing in this space. Of note, as of 2014, the RenovAr, focusing on the development countries to participate in the fight countries of America produced of clean , in particular solar and against climate change. In 2018, 53 percent of their from wind ,4 as well as -standing and every five years thereafter, the renewable sources, compared with a tax policies to ensure the success participating parties will review their world average of 22 percent.2 of renewables. The plan allows tax collective efforts related to the goals incentives for that develop set forth in the Paris Agreement. , in 2015, established an clean energy projects. action plan with strategies, including Whether due to the Paris Agreement incentives, to achieve reduced These examples are some of the or other factors, there has been environmental impacts, improving many reasons that Latin America is an increasing number of tax policy quality of life and access to clean and rising to the top of the renewable changes in the space. sources.3 . KPMG has created the second established a in 2014, as Green Tax Index to further increase None of these Latin American part of its ’s awareness of the evolving and countries have an Environmental initiative. In addition, in 2016, Chile complex global tax policy landscape. Performance Index rating, which implemented a green tax on all new Similar to the initial Index, this version indicates large and well-implemented vehicles sold. Mexico, which in 2013 strives to encourage companies to programs and policies. All have lower had little focus on environmental explore the opportunities of green tax Stringency protection, has recently addressed incentives and to reduce exposure to rankings, which indicate stricter the issue. In 2016, Mexico passed green tax penalties. Different from the policies, such as and penalties. the General Law for Environmental first Index, this report uses various This makes sense as typically the Protection (“Ley General de data sources, such as Organisation programs in these countries are newer Equilibrio Ecológico y la Protección al for Economic Co-Operation and and less likely to yet have made an Ambiente”), which imposes penalties Development (OECD), , impact. on entities that create environmental

1 See http://unfccc.int/paris_agreement/items/9485.php. 2 See “Latin America is set to become a leader in alternative energy,” , http://www.economist.com/news/ americas/21711307-power- andean-sun-latin-america-set-become- leader-alternative-energy 3 See National Programme for the Rational and Efficient Use of Energy. 4 See “President Macri Launches Renewable Energy Plan ‘RenovAr,’ The Argentina Independent, May 18, 2016.”

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Other areas of the world, such as the completely exempt. In addition, ——Green vehicles Nordic and other European countries, subsidies are provided ——Green buildings continue to rank extremely high in for the purchase of photovoltaic- the effectiveness of their regulatory panels as well as for production of ——Water policies. Many of these countries have electricity from wind or solar sources. ——Material resources and the environmental resources (such The and also as ) and long-standing post high results. Germany provides —— and ecosystems tax policy to ensure the success of a value-added-tax (VAT) refund for ——Innovation renewable energy. , , the purchase of renewable energy Germany, the Netherlands, and equipment, as well as an energy ——Food rank in the top ten of the for the production of Who may be interested Environmental Performance Index electricity from renewable sources. Every country listed on the Index rating. Sweden and Finland rank in In the Netherlands, depreciation is has a green tax system that warrants the top ten for environmental policy available for qualifying environmentally attention. Countries with no green stringency. In addition, Denmark, friendly assets under the Willekeurige tax incentives or penalties are not Finland, and Sweden rank as the top Afschrijving Milieu-Investeringen included in the sample of countries three countries, evaluated as part program. reviewed here. Companies that of this review, in environmental tax On June 1, 2017, the operate or plan to operate in these revenues, which provides a measure withdrew from the Paris Agreement. It markets, particularly in those with a of how much revenue the government is still uncertain what steps the United significant number of incentives or receives from environment-related States government under the new penalties, are advised to fully evaluate policies. administration will take to encourage such policies, as well as the before Environmental policy began as far behavior, or whether sweeping and after tax effects, to create a back as the 1970s. At that time, changes to its system complete model. Denmark introduced a packaging tax will be enacted, either of which could to reduce waste and increase the change behavior. and recycle rate of packaging. In About the Index the early 1990s, Denmark introduced This Index is organized by country, a carbon tax. Finland taxes , providing various indices, as well as , peat, tall , and liquid a summary of various incentives or . Sulfur-free light fuel oil used penalties in effect, organized by the in heating and machinery is taxed following nine policy areas: at a lower rate than fuel containing sulfur. Sweden taxes many fuels ——Carbon and climate change used for transportation and heating, ——Renewable energy and fuels while some renewable fuels are

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 5 trademarks or trademarks of KPMG International. NDPPS 655445 The Index: country rankings The following rankings can be evaluated against each economy’s tax policy to determine the effectiveness of their actions.

Development of Environmentally Development of Diffusion of Relative advantage environment-related related government Energy public RD&D environment-related environment-related Country Rank Rank Rank Rank in environment- Rank Rank technologies, % all R&D budget, % total budget, % GDP technologies, % technologies, % all related technology technologies government R&D inventions worldwide technologies Argentina 36 6.22% 5 4.26% - - 36 0.62 16 0.62% 17 10.49% 22 9.16% 4 4.34% 14 0.02% 22 0.92 16 0.62% 24 9.30% 17 9.85% - - - - 17 0.99 21 0.18% 25 9.25% 15 10.12% 7 3.90% 8 0.03% 15 1. 01 7 2.14% - - Chile 1 19.36% 14 2.25% - - 1 1.94 28 0.07% 16 10.69% Colombia 34 6.61% - - - - 34 0.66 35 0.02% 22 9.49% 9 12.14% 17 1.87% 14 0.02% 9 1.21 22 0.15% 18 10.40% Denmark 2 18.36% 15 2.11% 4 0.05% 2 1.84 12 0.98% 1 21.60% Finland 13 10.72% 20 1.09% 1 0.11% 13 1.07 15 0.67% 2 15.13% 8 12.24% 10 3.00% 3 0.05% 8 1.23 5 4.48% 4 14.67% Germany 7 12.44% 9 3.11% 8 0.03% 7 1.25 3 12.69% 5 14.52% 25 8.84% - - - - 25 0.88 10 1.21% 32 4.88% Indonesia 5 12.87% - - - - 5 1.29 32 0.03% - - 35 6.40% 21 0.97% 13 0.02% 35 0.64 25 0.13% 6 14.29% 21 9.21% 11 2.91% 8 0.03% 22 0.92 8 1.68% 26 8.75% 16 10.06% 16 1.94% 2 0.06% 15 1. 01 1 23.53% 23 9.46% Malaysia 29 8.35% - - - - 28 0.84 26 0.09% 6 14.29% Mexico 22 9.16% 18 1.59% - - 19 0.96 26 0.09% 14 11.23% Netherlands 27 8.46% 22 0.58% 8 0.03% 27 0.85 11 1.13% - - 28 8.41% 1 9.41% 19 0.01% 28 0.84 23 0.14% 8 13.80% 4 13.13% 2 5.89% 14 0.02% 4 1.31 20 0.25% 10 12.12% 26 8.73% 6 4.04% 20 0.00% 26 0.87 29 0.06% 11 11.98% Romania 20 9.55% 3 4.92% - - 19 0.96 31 0.04% 9 13.16% 11 11.12% 25 0.14% - - 11 1. 11 18 0.32% 30 6.82% 24 9.13% - - - - 24 0.91 19 0.29% 27 8.53% South Africa 18 9.71% - - - - 18 0.97 24 0.13% 3 14.70% South 19 9.59% 12 2.35% 4 0.05% 19 0.96 4 9.32% 19 9.88% 3 13.28% 8 3.50% 18 0.01% 3 1.33 14 0.72% 12 11.71% Sweden 10 11.37% 19 1.48% 7 0.04% 10 1. 14 9 1.22% 13 11.51% 32 7.39% 24 0.22% 4 0.05% 32 0.74 13 0.83% 21 9.51% Taiwan ------29 7.66% Thailand 30 8.00% - - - - 30 0.80 32 0.03% - -

Ukraine 31 7.45% - - - - 31 0.75 30 0.05% 31 6.73% United Arab Emirates 6 12.67% - - - - 6 1.27 32 0.03% - - 12 11.02% 13 2.34% 17 0.02% 12 1. 10 6 3.17% 15 10.94% United States 14 10.40% 23 0.38% 8 0.03% 14 1.04 1 23.53% 28 8.41% Vietnam 33 7.19% - - - - 33 0.72 36 0.01% 20 9.52%

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated © 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 7 trademarks or trademarks of KPMG International. NDPPS 655445 trademarks or trademarks of KPMG International. NDPPS 655445 Environmental Renewable Energy CO2 Consumption GDP per Unit Country Rank Rank EPI Rank EPS Rank Emissions Rank Rank Rank GDP per Capita Rank CPI yr/yr (% of total tax (% of total of Energy Use (% YoY) revenue) consumption) Argentina 23 4.0% 23 79.84 - - 22 -1.3% 24 8.8% - - 24 12502.82 - - Australia 8 7.8% 9 87.22 7 3.12 24 0.7% 25 8.4% 27 7.67 6 51850.27 19 1.48% Brazil 26 1.9% 25 78.90 22 0.78 36 7.2% 2 43.6% 14 10.63 29 8726.90 3 6.29% Canada 24 3.7% 13 85.06 11 2.84 17 -1.2% 15 20.6% 33 5.86 10 42210.13 20 1.36% Chile 14 6.1% 26 77.67 - - 32 2.7% 8 30.3% 17 9.88 23 13576.00 10 2.75% Colombia 20 4.9% 27 75.93 - - 38 12.2% 10 26.3% 2 18.39 32 5792.18 4 5.75% Czech Republic 7 7.9% 15 84.67 16 2.30 11 -2.4% 22 10.9% 30 7.05 22 18286.33 12 2.01% Denmark 6 8.2% 3 89.21 1 4.18 34 4.6% 9 27.6% 6 13.79 4 53743.97 30 0.50% Finland 11 6.6% 1 90.68 3 3.35 8 -5.2% 3 39.1% 31 6.42 9 43169.22 25 1.10% France 21 4.4% 6 88.20 6 3.19 21 0.1% 18 12.6% 19 9.70 15 38127.65 28 0.66% Germany 17 5.4% 17 84.26 9 3.01 31 2.4% 19 12.4% 13 10.93 11 41902.28 16 1.70% India 1 13.4% 37 53.58 20 1. 15 26 0.8% 4 39.0% 22 8.40 37 1723.30 6 4.94% Indonesia - - 35 65.85 21 1. 10 1 -20.0% 5 37.1% 12 11.38 34 3604.29 9 3.03% Ireland 9 7.6% 12 86.60 19 2.05 12 -2.1% 27 7.0% 4 16.26 2 62562.27 35 -0.20% Italy 4 8.8% 16 84.48 12 2.77 6 -6.7% 20 12.1% 7 13.09 17 30507.18 31 0.50% Japan 19 5.1% 22 80.59 14 2.63 27 1.1% 30 4.5% 16 9.95 13 38917.29 32 0.34% Malaysia 27 1.5% 29 74.23 - - 37 8.1% 28 6.8% 24 7. 7 6 27 9360.47 13 1.83% Mexico 28 -1.8% 30 73.59 - - 30 1.6% 23 9.4% 15 10.45 30 8554.62 8 3.36% Netherlands 3 9.3% 20 82.03 2 3.63 22 0.4% 29 4.7% 18 9.85 8 45282.63 29 0.52% New Zealand 22 4.2% 7 88.00 - - 15 -1.6% 7 30.8% 25 7.68 14 38345.40 22 1.34% Poland 15 6.0% 21 81.26 10 2.99 25 0.8% 21 11.1% 20 9.03 25 12315.65 27 0.80% Portugal 13 6.4% 5 88.63 18 2.13 23 0.4% 11 25.6% 10 12.39 21 19831.61 26 0.88% Romania - - 19 83.24 - - 2 -13.4% 14 21.7% 11 11.63 26 9465.42 36 -0.53% Russia - - 18 83.52 24 0.60 10 -2.5% 32 3.3% 34 4.94 28 8928.70 5 5.37% Singapore - - 10 87.04 - - 5 -7.5% 35 0.5% 5 16.15 5 52960.73 33 0.03% South Africa 5 8.2% 32 70.52 22 0.78 19 -0.2% 16 16.9% 35 4.69 33 5260.90 2 6.72% 2 10.3% 31 70.61 13 2.63 29 1.4% 34 1.6% 32 6.22 18 27538.81 21 1.34% Spain 16 5.6% 4 88.91 17 2.22 3 -10.5% 17 15.8% 9 12.47 19 26608.87 18 1.57% Sweden 18 5.2% 2 90.43 8 3.10 7 -5.8% 1 49.9% 21 8.46 7 51164.51 15 1.73% Switzerland 12 6.6% 11 86.93 5 3.29 35 6.9% 13 22.7% 3 16.62 1 79242.28 34 -0.02% Taiwan - - 28 74.88 - - 20 0.0% 37 0.0% 37 0.00 20 22453.43 17 1.70% Thailand - - 33 69.54 - - 18 -0.7% 12 23.0% 28 7.50 31 5899.42 24 1.13% - - 24 79.69 - - 4 -8.3% 33 2.8% 36 3.27 35 2194.36 1 12.36% United Arab - - 34 69.35 - - 14 -1.9% 36 0.1% 23 8.07 16 37677.91 14 1.77% Emirates United Kingdom 10 7.2% 8 87.38 4 3.33 13 -2.1% 31 4.4% 8 12.53 12 40095.95 23 1.20% United States 25 2.8% 14 84.72 15 2.55 28 1.4% 26 7.9% 29 7.36 3 57436.41 11 2.20% Vietnam - - 36 58.50 - - 9 -3.5% 6 35.6% 26 7.67 36 2173.27 7 4.74%

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated © 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 9 trademarks or trademarks of KPMG International. NDPPS 655445 trademarks or trademarks of KPMG International. NDPPS 655445 CO2 CO2 emissions Industrial CO2 emission Real GDP Working age CO2 emissions emissions EPI global CO2 emission Country Rank Rank Rank Rank per capita Rank production Rank per capita growth pop (% of total) (kt) (10yr % rank global rank (metric tons) Yo Y global rank change) Argentina 36 -2.3 31 63.9% 13 377906 3 16.4 14 1.6% 22 12.4% 43rd 27th 75th Australia 14 2.5 21 66.3% 21 189819 29 4.5 27 -1.9% 27 40.5% 13th 16th 10th Brazil 37 -3.6 10 69.1% 7 503677 33 2.5 32 -8.2% 32 56.6% 46th 10th 105th Canada 25 1. 4 14 67.9% 10 475735 4 13.5 22 -0.8% 12 -14.0% 25th 13th 16th Chile 23 1. 6 11 68.9% 27 83171 26 4.7 21 -0.6% 29 49.6% 52nd 43rd 72nd Colombia 19 2.0 12 68.7% 26 89625 35 1. 9 11 1.7% 31 56.1% 57th 41st 118th Czech Republic 15 2.4 18 66.9% 25 98661 9 9.4 2 4.8% 8 -19.2% 27th 36th 26th Denmark 31 1. 1 31 64.2% 35 38067 19 6.8 12 1.7% 2 -32.0% 4th 70th 48th Finland 25 1. 4 34 63.2% 30 46300 13 8.5 24 -1.1% 1 -33.0% 1st 59th 33rd France 30 1. 2 36 62.4% 15 333191 24 5.1 15 1.5% 13 -12.4% 10th 18th 69th Germany 21 1. 8 23 65.9% 5 757313 11 9.2 16 1.2% 15 -8.0% 30th 6th 29th India 1 6.8 25 65.6% 2 2034752 37 1. 6 7 3.2% 35 85.0% 141st 3rd 128th Indonesia 4 5.0 17 67.1% 9 479365 34 1. 9 4 4.8% 30 51.3% 107th 12th 115th Ireland 3 5.2 28 65.1% 36 34965 17 7. 6 1 36.9% 10 -18.1% 19th 73rd 41st Italy 33 0.9 33 63.9% 14 344768 22 5.7 18 0.9% 4 -26.4% 29th 17th 61st Japan 32 1. 0 37 60.8% 4 1243384 8 9.8 25 -1.4% 19 0.1% 39th 5th 25th Malaysia 6 4.2 13 68.4% 20 236511 14 8.0 5 4.6% 28 49.4% 80th 8th 20th Mexico 16 2.3 22 65.9% 8 488602 31 4.0 17 1.0% 24 20.4% 63rd 25th 37th Netherlands 18 2.1 26 65.2% 22 169973 7 10.1 30 -3.3% 16 -2.8% 67th 11th 83rd New Zealand 7 4.0 29 64.9% 37 33960 16 7. 7 13 1.6% 17 -0.4% 36th 29th 23th Poland 11 2.8 9 69.5% 17 302333 15 8.0 3 4.8% 18 0.0% 11th 74th 40th Portugal 25 1. 4 27 65.2% 31 46263 30 4.4 10 1.7% 6 -24.4% 38th 21st 39th Romania 5 4.8 16 67.2% 28 70736 32 3.5 8 3.0% 3 -30.0% 7th 60th 76th Russia 35 -0.2 7 69.9% 3 1789074 5 12.5 29 -3.1% 21 11.5% 34th 45th 88th Singapore 19 2.0 4 72.8% 29 50557 10 9.4 31 -5.0% 34 62.4% 32nd 4th 18th South Africa 34 0.3 24 65.7% 11 471239 12 8.9 19 0.8% 23 16.5% 14th 56th 27th South Korea 11 2.8 3 72.9% 6 592499 6 11. 8 23 -0.9% 25 27.1% 81st 14th 30th Spain 9 3.2 19 66.3% 19 236969 23 5.1 6 3.3% 5 -26.2% 6th 24th 68th Sweden 8 3.3 35 62.8% 33 44327 27 4.6 9 2.3% 9 -19.1% 3rd 63rd 73rd Switzerland 29 1. 3 15 67.2% 34 40348 25 5.0 28 -2.4% 20 0.4% 16th 67th 70th Taiwan 25 1. 4 ------26 -1.7% - - 60th - - Thailand 9 3.2 5 71.8% 16 303118 28 4.5 20 0.3% 26 35.0% 91st 20th 74th Ukraine 16 2.3 8 69.8% 23 169122 1 18.7 33 -13.2% 33 58.3% 44th 22nd 58th United Arab 13 2.7 1 84.9% 12 457473 18 7. 1 - - 11 -15.3% 92nd 30th 6th Emirates United Kingdom 21 1. 8 30 64.5% 1 5186168 2 16.4 - - 14 -8.7% 12th 15th 45th United States 23 1. 6 20 66.3% 18 271101 21 6.0 - - 7 -23.1% 26th 2nd 9th Vietnam 2 6.2 6 70.2% 24 152624 36 1. 7 - - 36 93.8% 131st 33rd 125th

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Indicator Source Variable meaning

GDP per capita IMF 2016 GDP per capita (USD)

CPI yr/yr IMF Inflation in 2016

Real GDP growth IMF 2016 GDP growth

Working age pop (percent of total) UN Percentage of the population that is aged 16–64

EPI Yale Index of environmental policy effectiveness; measures the scale of environmental policies and how well they hit their environmental targets

EPS OECD Index of environmental policy stringency that measures the strictness and intensity of environmental policies; basic measure of the scale of incentives and penalties

Environmental tax revenue (percent of OECD Percentage of tax revenue that comes from total tax revenue) environmental initiatives/taxes

Renewable World Bank Percentage of total energy consumption from renewable sources

CO2 emissions (10yr percent change) World Bank Percentage change in emissions from 2003 to 2013

CO2 emissions per capita (metric tons) World Bank Metric tons of CO2 emissions per person

Development of environment-related OECD Percentage of patents in the country that are technologies (percent domestic environment related technologies)

Environmental R&D budget (percent OECD Percentage of R&D budget used for environmental total gov. R&D) technology, also available as percent GDP

Development of environment-related OECD Environmental technologies developed in the country as technologies (percent inventions a percentage of the worldwide environmental inventions worldwide)

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Key findings

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG name and logo The KPMG Green Tax Index 13 are registered trademarks or trademarks of KPMG International. NDPPS 655445 Argentina

Economic indicators

Indicator Rank* Actual GDP per capita 24 USD 12,503

CPI yr/yr - - Real GDP growth 36 -2.3%

Working age pop (percent of total) 32 63.9%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 23*/43** 79.84 EPS - - Environmental tax revenue (percent of total tax revenue) 23 4.02% Renewable energy consumption 24 8.77% CO2 emissions (10yr percent change) 22 12.4% CO2 emissions per capita (metric tons) 3*/75** 16.4 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies (percent 36 6.22% domestic technologies) Environmental R&D budget (percent total gov. R&D) 4 4.3% Development of environment-related technologies (percent 34 0.02% inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change beneficiaries of the regime during and PROFIET (Programa de Fomento Argentina does not have a formal the development of the project de la Inversion Emprendedora carbon tax. until it becomes operative. These en Tecnologia), which supports are granted by the Banco de the development and creation of Renewable energy and fuels la Nación Argentina. An exemption technology-based companies or R&D Argentina strives to increase for bioethanol and fuels is projects of existing ones, among consumption of electricity from also available. others. renewables to 20 percent by the end of year 2025, from the current 1.8 Argentina also has numerous Also at the national level, the Software percent. To assist in reaching this goal, provincial-level programs encouraging Promotion Law establishes a variety the Argentine Congress amended the research, development, generation, of tax benefits for companies “National Promotion Regime for the and production of energy from that develop software technology use of Renewable Energy Sources nonconventional renewable sources. solutions in which renewable energy for Production” to could apply. Material resources and waste offer various benefits for compliance, Each province has over its such as: own territory. For instance, Buenos ——VAT: Early refund of the tax in the Aires applies a tax to any kind of construction stage waste generated in private similar to those generated in shops, ——Income tax: offices, and services industries, –– Accelerated depreciation among others, capable of being of personal and subjected to organic . assets Pollution and ecosystems –– period to offset tax In Argentina, pollution is regulated, losses has been extended to though not through taxes or 10 years incentives. Violation of the regulations may trigger fines, suspension, or ——Minimum presumed income tax revocation of licenses/termination of exemption up to the eighth year activity. In addition, certain activities, subsequent to start-up on property such as mining and oil, are subject to involved in the renewable energy special canons. project subject to the promotion regime (Law 27260: it repeals the Innovation tax as from 01/01/2019) Programs to encourage innovation and development in Argentina —— exemption for the include FONARSEC (Fondo renewable energy project and the Argentino Sectorial), which manufacturer of capital assets supports the development of related to the project high-technology-intensive enterprises In addition, -term loans may be that generate sustained growth granted at a special rate to through diversification and finance the payment of VAT by the increased value-added production

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Economic indicators

Indicator Rank* Actual GDP per capita 6 USD 51,850

CPI yr/yr 19 1.5% Real GDP growth 14 2.5%

Working age pop (percent of total) 21 66.3%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 9*/13** 87.22 EPS 7 3.12 Environmental tax revenue (percent of total tax revenue) 8 7.77% Renewable energy consumption 25 8.44% CO2 emissions (10yr percent change) 27 40.5% CO2 emissions per capita (metric tons) 29*/10** 4.5 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies (percent 22 9.16% domestic technologies) Environmental R&D budget (percent total gov. R&D) 4 4.3% Development of environment-related technologies (percent 16 0.62% inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change gas, ethane, compressed found to recycle 96 percent of their In 2013, Australia’s Carbon Pricing natural gas, and refined petroleum construction and , Mechanism, which was expected products such as petrol and diesel. compared to the average 58 percent to drive innovation, investment for new construction projects. A large number of products are in clean tech/clean energy R&D, subject to duty of AUD 0.395 Water demonstration, deployment, and per liter (e.g., petroleum, diesel). LNG Apart from regional water restrictions uptake, was terminated by the and CNG are taxed at AUD 0.270 per and water allocations trading, state- incoming Coalition government and kilogram. based efficiency programs, national replaced by the Direct Action Policy. grant, and financing opportunities, The centerpiece of Direct Action, the The Clean Energy Finance Australia has a few national programs Emissions Reduction Fund, replaced seeks to act as a financial catalyst to to encourage water efficiencies and the Carbon Farming Initiative. support the commercialization of clean management. Examples include . The Australian Renewable energy and fuels accelerated depreciation for water and Renewable Energy Agency (ARENA) Currently, Australia’s Renewable fodder infrastructure and fencing for aims to improve the competitiveness Energy Target of 33,000 GWh (by farmers, providing deductions over of renewable energy technologies 2020) applies to the national grid. shorter time frames than required and increase the supply of renewable Several states have set their own under the general rules. energy in Australia and provides targets. For example, Victoria has In addition, immediate deductions funding grants for a range of projects stated that, by 2020, 25 percent of are allowable for certain capital ranging from R&D to demonstration electricity generated in the state will expenditures incurred primarily and and pre-commercial.5 come from renewable energy. By principally for conserving or conveying 2025, that will rise to 40 percent. Green vehicles water for use in a primary production A luxury tax is imposed on business on land in Australia. The Emissions Reduction Fund (ERF) based on a cost threshold. However, encourages the use of renewable Material resources and waste for fuel-efficient cars, the threshold is energy as well as fuel and energy Initiatives to promote recycling and increased. A diesel is efficiency by allocating Australian , such as container also available if certain environmental Units (ACCUs) to deposit schemes and restricted sale criteria are satisfied. approved projects by way of a reverse of plastic bags, are either in place process. In order to ensure Green buildings or are being introduced at the state net emissions reduction across the As of 2016, Australia has no national and territory level. In New South economy, baselines are established tax incentives specifically related to , a levy applies to each ton of for facilities that emit more than green buildings, though it does have coal washery rejects (coal fines and 100,000 tons of CO2-e (the a voluntary Green Star program, ash from the coal washing process). Mechanism). If a facility exceeds its which provides a rating system Cofunding opportunities for waste baseline for an extended period, it for buildings and communities. reduction initiatives (e.g., waste food must offset this by purchasing ACCUs Research has found that, on average, composting) exist at the state level. from accredited ERF projects. For Green Star certified buildings produce electricity generators, the baseline 62 percent fewer Mining site rehabilitation applies to the national grid. Carbon emissions and use 66 percent less For purposes, an sequestration is an approved electricity than average Australian immediate tax deduction is available methodology under the ERF. buildings. Green Star buildings for expenditures incurred for use 51 percent less potable water rehabilitating sites used for mining The government also taxes a variety than average buildings. Green Star and quarrying operations (including of fossil fuels, including crude oil and certified buildings also have been petroleum). condensate, natural gas, liquefied

5 See http://arena.gov.au/funding/

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© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Brazil

Economic indicators

Indicator Rank* Actual GDP per capita 29 USD 8,727

CPI yr/yr 3 6.3% Real GDP growth 37 -3.6%

Working age pop (percent of total) 10 69.1%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 25*/46** 78.9 EPS 22 0.78 Environmental tax revenue (percent of total tax revenue) 26 1.94% Renewable energy consumption 2 43.63% CO2 emissions (10yr percent change) 32 56.6% CO2 emissions per capita (metric tons) 33*/105** 2.5 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies (percent 17 9.85% domestic technologies) Environmental R&D budget (percent total gov. R&D) - - Development of environment-related technologies (percent 20 0.18% inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 19 trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change Water Innovation As of 2016, Brazil does not have a While there is no national or Brazil allows certain R&D expense national or subnational carbon tax or subnational tax or tax incentive deductions. Eligible projects qualify for an Emission Trading Scheme (ETS). relating to water usage or an additional deduction of 60 percent It ratified the Paris Agreement in contamination, there are numerous of expenditures in technological September 2016 and has pledged penalties at both levels. Also, at innovation from the income tax to reduce its green-house gas the national level, there is pending calculation (income tax and social emissions by 37 percent by 2025 and that would provide tax contribution on net profit)—the by 43 percent by 2030 from its 2005 exemptions for transactions involving deduction may reach 80 percent of emissions level. equipment designed for the filtration, R&D expenditures, plus an additional treatment, and reuse of rainwater or 5 percent of researchers that are Renewable energy and fuels brackish water.7 hired as regular employees or moved Nearly 40 percent of Brazil’s primary from a different internal area (if the comes from renewable Material resources and waste innovative project results in IP, the energy sources. Brazil has announced Since 2011, Brazil has provided a tax additional deduction is 20 percent); full a goal of 45 percent by 2030. credit for acquisitions of recycled depreciation of the assets acquired materials to be used in production Several subnational tax incentives to be exclusively used in the R&D processes.8 exist, including a solar investment activities; and accelerated amortization incentive in Ceara and a tax exemption Pollution and ecosystems for intangibles assets used in R&D. on of renewable In 2009, the Brazilian government In addition, Brazil offers as an R&D tax energy for self-consumption in Rio established the on credit a 50 percent reduction of federal Grande do Sul. Climate Change,9 which establishes excise tax (tax on manufactured capital subsidies and tax benefits The Brazilian Development Bank products), which is available for to accomplish the main goals of the (Banco Nacional de Desenvolvimento equipment, machinery, instruments, policy: Econômico e Social – BNDES) is one accessories, spare parts, and tools of the world’s largest development ——Protection of the climate system that accompany manufactured goods banks. In Brazil, it is the main while allowing for economic and used in research and technological instrument of the federal government social development innovation development. No tax for long-term financing and investment withholding applies on overseas ——Reduction of greenhouse gas in all segments of the Brazilian remittances for the registration and emissions economy, including renewable energy. maintenance of trademarks and IP The financing conditions are variable, ——Preservation, conservation and (patents and cultivars). and in the renewable energy segment restoration of environmental A bill10 that would incentivize water the financing can be up to 80 percent resources is pending approval. of the total amount. Transactions ——Consolidation and expansion of involving conventional fuels are taxed legally protected areas in Brazil. ——Encouragement of reforestation Green vehicles and restoration of vegetation in Subnational penalties exist on degraded areas vehicular pollution. Also, pending legislation would provide tax ——Stimulation of the Brazilian exemptions for transactions involving Market of Emissions Reduction production of green vehicles.6 (where negotiations for securities representing certified avoided greenhouse gas emissions shall take place).

6 Brazil Bill 174/2014 7 Brazil PL 2297/2015 8 Brazil n. 7,619/2011 9 Law n. 12,187/2009 10 PLS 259/2015

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Economic indicators

Indicator Rank* Actual GDP per capita 10 USD 42,210

CPI yr/yr 20 1.4% Real GDP growth 25 1.4%

Working age pop (percent of total) 14 67.9%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 13*/25** 85.06 EPS 11 2.84 Environmental tax revenue (percent of total tax revenue) 24 3.70% Renewable energy consumption 15 20.60% CO2 emissions (10yr percent change) 12 -14.0% CO2 emissions per capita (metric tons) 4*/16** 13.5 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies (percent 15 10.12% domestic technologies) Environmental R&D budget (percent total gov. R&D) 7 3.90% Development of environment-related technologies (percent 7 2.14% inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 21 trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change expenditure pool can be fully deducted Canada’s excise tax of CAD 0.10/liter As of 2016, there is no federal carbon in the year incurred, rather than applies to unleaded , and tax system in Canada; however, expensed over the asset’s estimated CAD 0.04/liter applies to . certain provinces have imposed useful life. In addition, the Accelerated As of 2016, various provinces provide carbon taxes on certain fuels. Capital Cost Allowance for “Efficient financial incentives for businesses For example, Québec (2013) and Equipment” and “Renewable Energy to assess the feasibility and/ (2017) have implemented Generation Equipment” provides or installation of energy-efficient a carbon cap and system for an accelerated rate of write-off equipment in their facilities. companies that emit 25,000 tons (30 percent and 50 percent per of CO2 eq. or more annually (e.g., year, respectively, on a declining Green vehicles aluminum smelters, cement factories, balance basis). The Energy Innovation Program has electricity producers), as well as received CAD 46.1 million in funding The ecoENERGY for Renewable Power distributors that must cover over two years through Budget program was launched in April 2007 to greenhouse gas (GHG) emissions 2016 to support innovation in the encourage the generation of electricity associated with all products they clean energy sector by providing from renewable energy sources such distribute in Québec (gasoline, diesel funding for RD&D projects, including as wind, low-impact hydro, , fuels, , natural gas, and next-generation photovoltaic, and . heating oil). Further to this, British charging infrastructure in Canada. In Although no new contribution Columbia, , Ontario, Québec, addition, the ecoENERGY Innovation agreements have been signed and belong to the Western Initiative (ecoEII) received funding after March 31, 2011, projects with Climate Initiative (WCI). for a comprehensive suite of RD&D contribution agreements receive a one projects within five strategic priority Renewable energy and fuels cent per kilowatt-hour (kWh) incentive areas, including the of Canada has various incentives specific for eligible production during their first transportation. to the use of renewable energy. 10 years of operation. The program Canada’s Clean Energy Fund (CEF) itself will end on March 31, 2021. Green buildings supports clean energy research, Canada has no national As of March 31, 2011, 104 projects development, and demonstration incentive programs as of 2016. qualified for funding under the (RD&D) projects, including carbon However, regional programs have program representing investments of capture and storage. The objective of been put in place, such as the about CAD 1.4 billion over 14 years the CEF is to support the development of Hamilton’s provision of a and almost 4,500 megawatts of of new, cutting-edge energy of up to 75 percent of the property renewable power capacity.11 technologies that are essential for tax expected to accrue on a new reducing GHG and other air emissions The ecoENERGY for Initiative green building. in energy production, transmission, program started in April 2008 to invest Water distribution, and use. CAD 1.5 billion over nine years to Generally, there are no water-specific boost Canada’s production of biofuels. The Energy Innovation Program is a incentive programs on a national level This is aimed at helping producers of new development, receiving funding in Canada. renewable alternative(s) to gasoline in budget 2016. The income tax and/or diesel (e.g., biofuels, including legislation allows for certain capital and biodiesel) by providing property to be claimed as “Renewable financial incentives based on and Conservation Expenses.” This production/sales levels.

11 http://www.nrcan.gc.ca/ecoaction/14145

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Economic indicators

Indicator Rank* Actual GDP per capita 23 USD 13,576

CPI yr/yr 10 2.8% Real GDP growth 23 1.6%

Working age pop (percent of total) 11 68.9%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 26*/52** 77.67 EPS - - Environmental tax revenue (percent of total tax revenue) 14 6.09% Renewable energy consumption 8 30.27% CO2 emissions (10yr percent change) 29 49.6% CO2 emissions per capita (metric tons) 26*/72** 4.7 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies (percent 1 19.36% domestic technologies) Environmental R&D budget (percent total gov. R&D) 14 2.3% Development of environment-related technologies (percent 27 0.07% inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change Green vehicles Pollution and ecosystems A carbon tax was established by the A “green tax” has been implemented A pollution tax was established as part government as part of the 2014 tax on all new vehicles sold in Chile of the government’s 2014 tax reform reform legislation, which covers power beginning in 2016. The tax is calculated legislation. This tax applies to power plants with 50 thermal MW or higher based on various factors, including plants with 50 thermal MW or higher of installed capacity. fuel consumption efficiency, cost of of installed capacity. vehicles, and NOx emissions. Renewable energy and fuels Innovation There is national legislation that Water There are indirect R&D incentives obligates power companies to Under the National Water Direction in the case of the carbon tax. All produce renewable energy reaching agency, Chile imposes penalties power plants covered by the tax a peak of 20 percent by 2025. related to the non-use of the water (higher than 50 thermic MW) working (This complements prior legislation rights given by the government with biomass are not subject to that required production of 5 percent and the overuse of water related to the carbon tax. from renewables during 2010–2014.) withdrawal amounts higher than the one established in the water rights/ environmental license.

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Economic indicators

Indicator Rank* Actual GDP per capita 32 USD 5,792

CPI yr/yr 4 5.7% Real GDP growth 19 2.0%

Working age pop (percent of total) 12 68.7%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 27*/57** 75.93 EPS - - Environmental tax revenue (percent of total tax revenue) 20 4.94% Renewable energy consumption 10 26.27% CO2 emissions (10yr percent change) 31 56.1% CO2 emissions per capita (metric tons) 35*/118** 1. 9 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies (percent 34 6.61% domestic technologies) Environmental R&D budget (percent total gov. R&D) - - Development of environment-related technologies (percent 34 0.02% inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change energy efficiency. There is also an of water and energy savings. There is Colombia’s Scheme income tax deduction for goods, also a project to establish guidelines (MVC Colombia) established a equipment, or machinery for projects for the National Policy for Sustainable technological and institutional platform and programs or activities that Construction to give economic that could be used as a basis for the correspond to these activities. benefits and financial incentives and adoption of a Voluntary Emissions other kinds of incentives that can Incentives are also available for Reduction (VER) market mechanism be created to promote sustainable the generation of nonconventional and to facilitate voluntary greenhouse construction in Colombia. renewable for the national gases emission reduction activities , specifically, Water in Colombia. a 50 percent income tax deduction Colombian There are no incentives for the general of the investment (for the next five ordered the government to create /capture and years) and exclusion from VAT for the a charge for water use, promoting storage; however, two incentives, equipment, elements, machinery, and efficient use. In addition, due to the Forestry Incentive Certificate for services designated for this specific the weather variability presented Reforestation (CIFrh) and Forestry purpose. in Colombia during the ”El Niño” Incentive Certificate for Conservation phenomena, which results in water Also, some national funds have been (CIFc), include 5- or 10-year economic scarcity in some areas of the country, established to provide economical benefits for certain tree plantation the Water Commission in resources to the projects where owners helping to conserve or Colombia regulates water use. nonconventional renewable energy reforest land that can be used as a is involved. Material resources and waste carbon sink. There are some penalties regarding Green vehicles Renewable energy and fuels the disposal of certain waste, Colombia has several incentives The National Programme for the including material construction, related to the purchase of green Rational and Efficient Use of Energy biological , and industrial and vehicles, including a reduction in (PROURE) established an action plan commercial waste. taxes from 35 percent to 0 percent in 2015 with a vision to 2020, with for certain vehicles and chassis with Pollution and ecosystems strategies and commitments from an electric motor, a hybrid engine or Colombian Environmental Law public and private sectors, to achieve an engine operating on only natural ordered the government to create a expected impacts on productivity, gas, and several deductions related charge for . In cases of including competitiveness, reduction to developing strategies, plans, and noncompliance, sanctions include tax of environmental impacts, improving programs for , penalties, suspension of activities, or quality of life, and access to clean and savings, and energy efficiency even closure of certain sites. renewable sources for all citizens. established by the Ministry of Mines Innovation Included in the plan are strategic and Energy. Colombia has financial resources subprograms for promoting the use of The exclusion from VAT (described available through COLCIENCIAS, the nonconventional energy sources and above) applies to the technological Science, Technology, and Innovation incentives for the generation of energy conversion of vehicles. Management Department, to promote from nonconventional sources. These research, technological development, subprograms include exclusion from Green buildings and innovation projects, such as VAT for equipment, components, and Colombia has established minimum green technology, carbon capture machinery for projects, activities for of water and energy savings and storage, and energy efficiency, reducing energy consumption and/or per year that new construction has that provide a deduction of income increasing energy efficiency that to achieve according to location. tax for 175 percent of the investment correspond to developing strategies, and districts are also made in R&D. and plans and national programs encouraged to establish incentives for cleaner production, savings, and for increasing those minimum rates

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Economic indicators

Indicator Rank* Actual GDP per capita 22 USD 18,286

CPI yr/yr 12 2.0% Real GDP growth 15 2.4%

Working age pop (percent of total) 18 66.9%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 15*/27** 84.67 EPS 16 2.30 Environmental tax revenue (percent of total tax revenue) 7 7.93% Renewable energy consumption 22 10.93% CO2 emissions (10yr percent change) 8 -19.2% CO2 emissions per capita (metric tons) 9*/26** 9.4

* = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies (percent 9 12.14% domestic technologies) Environmental R&D budget (percent total gov. R&D) 17 1.9% Development of environment-related technologies (percent 21 0.15% inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change Water Pollution and ecosystems The Czech Republic participates in the Though no tax incentives are currently There are no specific tax penalties EU Emissions Trading Scheme. enacted, it is expected that in 2017 imposed for pollution. However, the specific subsidies will be available for Ministry of Environment imposes a Renewable energy and fuels water retention and reuse activities. penalty for pollution exceeding certain The Czech Republic has various Such incentives will be regulated by limits (e.g., power plants, iron mills), incentives and duties specific to the Ministry of the Environment. while the Ministry of Agriculture energy and fuel use. For example, provides incentives for reforestation. excise taxes are payable on Material resources and waste hydrocarbon fuels, while certain The Ministry of Industry and Trade Innovation exemptions may apply. In addition, the provides subsidies to small and R&D activities may be claimed as a price of electricity produced by solar medium-sized businesses for the tax deduction. This is common for energy power stations, wind power purchase of new energy-efficient all R&D projects and is not limited stations, and power stations is equipment and machinery. In to green initiatives. Generally, guaranteed above the normal market addition, certain scarce , R&D expenses are tax deductible price of traded electricity (governed by such as oil and coal, are taxed as a twice (e.g., R&D expense = 100, the Energy Regulatory Office). percentage of sales revenue from tax-deductible expense = 200). such . Various local Green buildings also impose taxes and Green building incentives are limited to fees on waste. the residential and public sector only.

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Economic indicators

Indicator Rank* Actual GDP per capita 4 USD 53,744

CPI yr/yr 30 0.5% Real GDP growth 31 1.1%

Working age pop (percent of total) 31 64.2%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 3*/4** 89.21 EPS 1 4.18 Environmental tax revenue (percent of total tax revenue) 6 8.18% Renewable energy consumption 9 27.56% CO2 emissions (10yr percent change) 2 -32.0% CO2 emissions per capita (metric tons) 19*/48** 6.8 * = Rank within sample of 37 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies (percent 2 18.36% domestic technologies) Environmental R&D budget (percent total gov. R&D) 15 2.1% Development of environment-related technologies (percent 12 0.98% inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change Renewable energy and fuels In addition, there is currently a According to the EU Climate and Since 1977, successive Danish green owner tax, which provides Energy Package Effort Sharing targets have been using a benefit to use smaller, energy- for 2013–2020, Denmark has set the energy taxes and incentives to efficient vehicles. The amount of tax goal to decrease its CO2 emissions encourage energy efficiency and to is based on how energy efficient by 20 percent below the 2005 level. raise revenue. In March 2012, a new the motor vehicle is, providing an In addition, Denmark has a target to Energy Agreement was finalized. The incentive to choose smaller and more become 100 percent fossil fuels free expansion of renewables in electricity energy-efficient cars. by 2050. The country is also one of production was to be financed through Water the few countries that has managed the Obligation (PSO) Denmark imposes various water to cut carbon emissions from energy schemes, which are a supplement taxes on drinking water, piped water, combustion below 1990 levels. to the price of electricity paid by the and water charges for high water consumers. The PSO tax will gradually The Danish carbon tax system, consumers (industries). be abolished during the period 2017– which started in 1991, covers all 2022, and by January 1, 2022 it will be Material resources and waste consumption of fossil fuels (natural fully abolished. Denmark has enacted both incentives gas, oil, and coal), with partial and penalties specific to material exemption and refund provisions for In addition, a new act, Act 70, was resources and waste. sectors covered by the EU-Emissions adopted in January 2013. The Act Trading Scheme (EU-ETS), energy- introduced a security of supply tax on As far back as 1978, the country intensive processes, exported all fuels—such as biomass and fossil— introduced a packaging tax to reduce goods, fuels in refineries, and many used for space heating. waste and increase the reuse and -related activities. Fuels used recycle rate of packaging. Incentives and grants also exist. As for electricity production are also an example, in 2012, an investment In 1990, Denmark introduced a tax on not subject to the carbon tax (only scheme was designed to bridge the extracted raw materials (sand, gravel, applicable to producers covered by price gap between renewable and stones, peat, clay, and limestone) in the EU-ETS), but instead, a tax on fossil fuels. The subsidy supports conjunction with a waste tax to reduce electricity production applies. industries to convert to renewable the use of natural materials and to The Danish government provides energy sources (such as wind, promote the use of recycled products. incentives for companies to put in solar, biogas, or biomass to power Denmark also bans waste place more sustainable practices manufacturing processes) or district suitable for . Only waste similar to a cap and trade program heating. In addition, in 2013, subsidies that cannot be reused, recycled, on (e.g., an incentive were made available for energy or incinerated may be landfilled. tax to encourage Danish enterprises optimization projects that support the Incineration of waste is covered by an to invest in environmental innovation country’s energy targets. energy tax, while there is a waste tax or sign an energy savings agreement In addition, the Green Investment on landfilled waste. with the Ministry of Transportation Fund provides loans on reasonable and Energy). Pollution and ecosystems terms for investments by companies There are no national pollution and Denmark implemented the world’s in energy savings, renewable energy, ecosystem taxes, though regional first carbon trading scheme in 2001. and resource efficiency. taxes and incentives do exist. The Danish government also imposes Green vehicles In addition, there are grant programs, both SO2 and NOx taxes. As of 2016, two types of taxes related such as the program available to to vehicles are imposed in Denmark. Under special circumstances, incentivize the transformation of One is a registration purchase tax. companies may be entitled to a privately owned cultivated forest areas reduction of the SO2 and NOx taxes. into “untouched” forest areas.

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Economic indicators

Indicator Rank* Actual GDP per capita 9 USD 43,169

CPI yr/yr 25 1.1% Real GDP growth 25 1.4%

Working age pop (percent of total) 34 63.2%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 1*/1** 90.68 EPS 3 3.35 Environmental tax revenue (percent of total tax revenue) 11 6.58% Renewable energy consumption 3 39.12% CO2 emissions (10yr percent change) 1 -33.0% CO2 emissions per capita (metric tons) 13*/33** 8.5 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies (percent 13 10.72% domestic technologies) Environmental R&D budget (percent total gov. R&D) 20 1.1% Development of environment-related technologies (percent 15 0.67% inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 33 trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change Finland. Businesses are penalized The basic tax for passenger cars and In Finland, energy taxes are levied on if they do not surrender enough vans is based on the levels of CO2 coal, natural gas, fuel peat, tall oil, and allowances to cover their emissions emissions reported by the vehicle liquid fuels. Since January 2011, the and have to buy allowances to make manufacturer. taxation of liquid fuels is carried out as up the shortfall, are “named and There are no incentives for production taxation of fuel components referred shamed” by having their names of electric vehicles, but the Finnish to in the table. The energy published, and pay a dissuasive fine government supports owners of tax consists of (1) energy content (EUR 100 per ton of CO2 in 2013– electric vehicles by giving them a tax, (2) CO2 tax, and (3) stockpile fee. 2020 period) for each excess ton of certain amount of money (available Liquid biofuels are to comply with the greenhouse gas emitted. until the end of 2017 with some criteria of sustainable development Renewable energy and fuels qualifications). prescribed by the EU Directive Within the EU, the energy efficiency 2009/28/EC (RES Directive). Also since Green buildings of products is enhanced by setting 2011, carbon dioxide levies for fossil Finland has several that regulate requirements concerning their fuels used in combined electricity buildings, housing, and related production and by steering consumers and production were lowered by issues. The Act on Energy Certificates to opt for energy-efficient products 50 percent. for buildings oversees the energy (e.g., energy labeling, Energy certificate program, which requires As an EU Member State, Finland Star program). owners to obtain an energy certificate is part of the EU Emission Trading Investments in renewable energy in conjunction with the building permit Scheme. Finland’s goal for its long- sources are supported through state proceedings for new buildings. term climate and energy strategy is subsidies. Production of renewable to reduce carbon (CO2) emissions energy and fuels is considered in from transport by 15 percent by national Energy Support (granting 2020 (compared to 2005 emissions Finland is an internationally system) and Investment aid for key level—about 4 million tons of CO2). appreciated pioneer with energy projects. For example, the Finland has set a target for the share regard to energy auditing and 2014 Cabinet Budget Framework of renewable energy in the transport has shared its experiences session reserved EUR 20 million for sector more stringent than the EU and know-how with other a demonstration project for offshore aiming to reach a 20 percent share countries establishing energy wind power. Finland also has a specific in 2020. audit programs. (Finland feed-in for renewable energy. coordinated two large European Finland’s Energy Authority awards Green vehicles Commission SAVE II program emission permits and keeps an Finland has a national car tax, projects and in 2006 organized Emission Trading Register, monitoring collected upon registration, that an international AUDIT ‘06 the responsibilities resulting from is scaled on the basis of the CO2 conference.) emissions trading and approval emissions corresponding to the of emissions trading verifiers. The Finland’s long-term objective specific fuel consumption of the car. emissions trading scheme covers is to be a carbon-neutral The car tax for cars leased temporarily CO2 emissions of large industrial society. Currently, Finland is from outside Finland is similarly installations and combustion one of the world’s leading assessed. installations with a rated thermal users of renewable sources of input exceeding 20 MW. In Finland, There is also a national vehicle tax, energy, especially . the scheme also includes installations collected annually, which consists of a Renewable energy sources that produce district heat at less basic tax and a tax on driving power. A provide one-fourth of Finland’s than 20 MW. The emissions trading vehicle tax must be paid for passenger total energy consumption and scheme covers more than 40 percent cars, vans, buses, and lorries that account for more than one- of greenhouse gas emissions within have been entered in the Vehicular fourth of its power generation. the EU and approximately half of the and Driver Data Register (vehicles greenhouse gas emissions within belonging to classes M and N).

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Innovation is one of the core areas of The Ministry of Public funding for research, development, and Employment and Economy in Finland. innovation activity is being targeted accordingly. Finland’s innovation policy has four focus areas for The public sector tries to motivate companies to spurring renewal and growth in the Finnish business engage and invest in innovation activity through various and industry: bioeconomy, clean tech, digitalization, and measures, e.g., public research funding and other the health sector. The government is also increasing incentives, legislation, access to international markets, emphasis on the importance of service and creative and the functioning of the EU’s internal market. Such sectors (including marketing, design, branding, and incentive systems, and the institutions planning and other consumer-focused, value-creating activities and implementing them, constitute the Finnish national business models as sources for ) innovation system, which has been ranked among the and increasing competences in utilizing the IP rights. best in the world.

A certificate must also be obtained resources; however, conducting to reimburse the costs of oil spill when a building, or part thereof, is business in some industries may response on land and at sea, when sold or rented out. In the future, an require a permit/license subject to a the cause of the incident is unknown energy certificate will also be required charge (e.g., mining permit). or the culpable party is unable to pay when selling or renting out an old the compensation in question. Land A national excise duty is levied small residential building, as is the planning and building are subject on retail containers of alcoholic case with other buildings. In addition, to permits/licenses from different beverages and soft drinks, and there the Land Use and Building Act authorities, depending on the purpose is a container deposit system that ensures that the use of land and water of the land use. If the purpose of the has incentives for consumers to areas, and building activities on them, land use changes from one where a recycle drink containers. There are no creates preconditions for favorable permit was previously granted, a new direct taxes targeted at consumption living environments and promotes permit must be obtained. Permits other than the VAT. However, water ecologically, economically, socially, and may cause additional expenses, and consumption, electricity, and waste culturally sustainable development. acting without the respective permit/ are subject to general charges/fees. license may result in fines/. Water The waste tax is levied from When the change of land use includes Owners of are liable authorized landfill operators on certain the sale of the land, a to pay a wastewater fee when types of waste. A tax liability is (4 percent of the purchase price) wastewater of the real property is generated when the landfill operates becomes due. led to a sewer system operated by as the final placement for the waste. a . The wastewater fee Innovation For 2016, the tax was EUR 70 per varies depending on the operator. Investments in R&D activity totaled received ton. almost EUR 6.68 billion in 2013; in Industrial operations with wastewater Pollution and ecosystems 2012–2014, public funding addressed that has a significant impact on Oil waste duty, comparable to excise to R&D amounted to EUR 2 billion, municipal wastewater treatment (i.e., duty, is levied on lubricating and and in 2016, EUR 129.3 million was wastewater that is not in compliance preparations to cover the expenses budgeted to energy research. with certain threshold value) are of treating oil waste. Oil damage subject to penalty fees from the duty is levied on oil that is imported municipal operators. into or transported through Finland Material resources and waste and subject to the duty. The Finnish There are no taxes in the strict sense Oil Pollution Compensation Fund directed at the use of material assesses the duties that are used

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 35 trademarks or trademarks of KPMG International. NDPPS 655445 France

Economic indicators

Indicator Rank* Actual GDP per capita 15 USD 38,128

CPI yr/yr 28 0.7% Real GDP growth 30 1.2%

Working age pop (percent of total) 36 62.4%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 6*/10** 88.2 EPS 6 3.19 Environmental tax revenue (percent of total tax revenue) 21 4.36% Renewable energy consumption 18 12.59% CO2 emissions (10yr percent change) 13 -12.4% CO2 emissions per capita (metric tons) 24*/69** 5.1 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies (percent 8 12.24% domestic technologies) Environmental R&D budget (percent total gov. R&D) 10 3.0% Development of environment-related technologies (percent 5 4.48% inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change applicable to new vehicles issuing introduce commercial packaging on France participates in the EU more than 130g of CO2/km. the market pay an “eco-contribution” Emissions Trading Scheme. based on the type of material, total A conversion bonus for the weight, and number of units. Renewable energy and fuels replacement of a diesel vehicle placed France has an objective to have into circulation before 2001 by a clean In addition, removal 23 percent of renewable energies in vehicle is cumulative with the bonus. and elimination is subject to the TGAP its total consumption in 2020 (heat (general tax on polluting activities). Company cars are also taxed. The taxe 30 percent, electricity 27 percent, sur les véhicules de sociétés (TVTS) Waste from electric and electronic and transport 10.5 percent). To is an annual tax payable by companies equipment, printed paper, tires, light reach this goal, various incentives that have their registered headquarters bulbs, furniture, medical waste and are available specific to renewable in France or an establishment in France. drugs, and batteries is also taxed. energy. Examples include the Tax The tax is calculated based on the Credit for Energy Transition (Crédit Pollution and ecosystems vehicle’s CO2 emission rates (g/km) d’impôt transition énergétique), which France imposes penalties on certain and the level of pollution according to provides a 30 percent credit on the polluting activities. As an example, the type of combustion. amount of expenditures on equipment the general tax on polluting activities or renovation work for improving the Green buildings (taxe générale sur les activités energy performance of buildings. In A few incentives exist in France polluantes) applies to waste, emitting addition, the Certificates of Energy specific to green construction. pollutants, lubricating oils, washing Savings (Certificats d’économie Buildings that have received a powder, extracting materials, classified d’énergie) program provides Building Low Energy Consumption installations, papers, and biofuels. certificates proving that an energy label (bâtiment basse consommation The amount of the tax is obtained by savings action has been undertaken énergétique, BBC 2005) are partially applying a specific rate (depending by a company, an , or or wholly exempt from . on the activity) per ton of polluting a local authority. Such exemption applies up to 50 substance produced/processed. percent or 100 percent, depending As well as incentives, France Innovation upon the decision of local authorities, imposes a tax on consumption of France provides a credit equal to which also determines the period energy products (taxe intérieure 30 percent of the eligible research of exemption. de consommation sur les produits expenses that do not exceed EUR énergétiques, TICPE). Petroleum Water 100 million and to 5 percent for the products are subject to this tax. French municipalities tax potable water, eligible R&D expenses exceeding This tax targets a certain number of while the national government provides EUR 100 million. Though the credit products, a list of which is common to a reduced VAT rate for the purchase is not specifically applicable to all the member states of the EU. of rain water recuperation systems sustainable development, it may apply (reduced from 20 to 10 percent). to such activities. Green vehicles Incentives specific to the purchase of Material resources and waste green vehicles are also available. For France imposes various penalties on example, as of 2016, France provides the use of material resources and a bonus for the purchase of electric waste. As an example, the French and hybrid vehicles issuing less than law Articles 197 and 199 of Grenelle 110g of CO2/km, as well as a penalty II provides that companies that

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 37 trademarks or trademarks of KPMG International. NDPPS 655445 Germany

Economic indicators

Indicator Rank* Actual GDP per capita 11 USD 41,902

CPI yr/yr 16 1.7% Real GDP growth 21 1.8%

Working age pop (percent of total) 23 65.9%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 17*/30** 84.26 EPS 9 3.01 Environmental tax revenue (percent of total tax revenue) 17 5.38% Renewable energy consumption 19 12.38% CO2 emissions (10yr percent change) 15 -8.0% CO2 emissions per capita (metric tons) 11*/29** 9.2 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies (percent 7 12.44% domestic technologies) Environmental R&D budget (percent total gov. R&D) 9 3.1% Development of environment-related technologies (percent 3 12.69% inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change Companies in energy-intensive January 1, 2016 and December 31, Germany’s cap and trade system productive sectors can apply for 2020 have a 5-year exemption, is based on the tax relief if they meet certain whereas electric vehicles first-time directive, and implemented into requirements, such as the registered between May 18, 2011 and German law in 2004. The system establishment of an environmental December 31, 2015 are exempt from includes operators of installations management system (in accordance the vehicle tax for 10 years. After the of all large combustion plants (with with German law or a registered exemption period, the vehicle tax is more than 20 megawatts of thermal organization of the EU) and the reduced by 50 percent. This exemption output) and large installations of improvement of their energy does not apply to hybrid vehicles. energy-intensive industries, such as efficiency. Smaller companies can Water steelworks, refineries, and cement establish a system to improve Thirteen of the sixteen German states works. In 2012, air traffic was added to their energy efficiency without an impose charges on the extraction of the emissions trading scheme. environmental management system. water, called the “Watercent.” Renewable energy and fuels Finally, fossil energy resources are Entrepreneurs or small companies taxed at different rates, depending on that provide at least 10 percent of the source. electricity from renewable energy Green vehicles equipment into the national grid are Germany’s vehicle tax is a variable eligible for deduction of Germany’s value depending on the CO2 emission input tax. The VAT for the purchase of of each registered car. Vehicle types the equipment will also be refunded with a high CO2 emission are taxed by the tax authority. more heavily than car types with a Additionally, the purchase price of lower CO2 emission (applicable to a renewable energy source can be cars registered in 2009 or later). subject to degressive depreciation for In addition, the purchase of a period of 20 years (instead of linear environmentally friendly vehicles depreciation), providing a tax benefit is rewarded with a premium of (e.g., buyers can claim 20 percent of EUR 4,000 for electric vehicles and the acquisition cost as a tax loss and EUR 3,000 for hybrid vehicles with offset it against earnings in a financial a net listed price under EUR 60,000. year leading to lower ). The funding pool is supported by The extraction of electricity from the state (50 percent) and by the renewable energy sources is fully tax car manufacturers (50 percent) and exempt if the electricity stems from is offered to persons purchasing a a power supply or a power supply car from one of the participating line exclusively fed with renewable manufacturers. energy. Renewable energy in this Electric vehicles also benefit from case is defined as hydro, wind, solar, an exemption from the vehicle tax. geothermal, , gas, Electric vehicles first-time registered and biomass energy. before May 17, 2011 or between

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 39 trademarks or trademarks of KPMG International. NDPPS 655445 India

Economic indicators

Indicator Rank* Actual GDP per capita 37 USD 1,723

CPI yr/yr 6 4.9% Real GDP growth 1 6.8%

Working age pop (percent of total) 25 65.6%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 37*/141** 53.58 EPS 20 1. 15 Environmental tax revenue (percent of total tax revenue) 1 13.37% Renewable energy consumption 4 38.99% CO2 emissions (10yr percent change) 35 85.0% CO2 emissions per capita (metric tons) 37*/128** 1. 6 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies (percent 25 8.84% domestic technologies) Environmental R&D budget (percent total gov. R&D) - - Development of environment-related technologies (percent 10 1.21% inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change with facilities that are having trouble setting up of new projects with non- India has several carbon and climate meeting their targets, or banked for ODS technologies (a basic change taxes/incentives in place. future use. duty exemption is also available on the same). The clean environment “cess” (a Renewable Energy Certificates tax levied by the government for a are provided when a generator In addition, India has implemented a specific purpose) is applied to all has produced a certain amount of Generation-Based Incentive scheme, goods specified in chapter 2701, electricity from a renewable energy offering wind electricity producers 2702, and 2703 except coal, lignite, resource. These can be traded in INR 0.50 per unit of electricity fed into and peat subject to the condition that the market to meet a company’s the grid for a period of not less than cess has been paid at the stage of raw “Renewable Purchase Obligation.” 4 years and not more than 10 years coal, raw lignite, and raw peat from (capping at INR 100 lakhs per MW) Renewable energy and fuels which such goods are produced or with some limitations. India continues to offer many manufactured. incentives/deductions to encourage In addition, the Ministry of New and Additional taxes include a cess on the use and innovation of renewable Renewable Energy provides financial coal and coke (INR 10 per ton) under energy and fuels. Incentives include support for costs related to grid- the Coal Mines Conservation and accelerated depreciation rates of up connected rooftop solar and small Development Act, 1974 and an oil to 100 percent for new machinery plants. industry development cess on crude or plants that are acquired and An income of 10 years is oil (INR 2500 per ton) and natural gas installed after March 31, 2005 by offered for businesses engaged in (INR 300 per thousand cubic meters) a power generator or distributor the generation and/or distribution of under the Oil Industry (Development) on certain energy-saving devices, power if generation begins before Act, 1974. Additionally, there is an such as specialized and March 31, 2017 (solar included). excise duty on petrol and high-speed furnaces, instrumentation and diesel oil. monitoring systems for monitoring India also has various customs duty energy flows, recovery and VAT exemptions and reduced In addition to these taxes, India has equipment, systems, rates specific to the import of a market-based trading scheme electrical equipment, burners, and renewable energy equipment. (Perform Achieve Trade) that aims to other equipment. An 80 percent improve energy efficiency in industries Green vehicles depreciation rate also applies to many by trading in energy efficiency India uses both incentives and renewable energy devices, such as flat certificates in energy-intensive penalties to encourage the use of plate solar collectors, concentrating sectors. Participation in the scheme is green vehicles. In 2012, India provided and pipe type solar collectors, solar mandatory for Designated Consumers reduced excise and customs duty cookers, and solar water heaters under the Act. rates and customs duty reductions for and systems. specified parts of hybrid vehicles and The Bureau of Energy Efficiency There is an additional 20 percent for lithium-ion battery packs for supply sets mandatory, specific targets depreciation on any new plant and to electric vehicle or for energy consumption for larger, machinery (acquired and installed after manufacturers. energy-intensive facilities. The scheme March 31, 2005) for businesses that is being implemented in three In addition, the Faster Adoption manufacture components to generate/ phases. Phase one ran from 2012 and Manufacturing of Hybrid and distribute power. Total depreciation to 2015 and covered 478 facilities Electric (FAME) program was recently allowance is halved if the asset is from eight energy-intensive sectors launched, offering incentives on hybrid used for less than 180 days in the year (such as aluminum, cement, chor- and electric vehicles. of acquisition. alkali, fertilizer). It targets energy Under the scheme, the government consumption reductions of 6.886 Also, concessional excise duties at the will offer incentives on hybrid and million tons of oil equivalent in the rate of 6 percent are applicable with electric vehicles of up to INR 29,000 covered facilities. Facilities making CENVAT (Central VAT tax) credit in areas for two-wheelers and INR 1.38 lakh for greater reductions than their targets such as biogas lights, manufacture cars. The government will spend INR receive “EsCerts” (energy saving of goods required for substitution of 795 crore in the first two fiscal years certificates), which can be traded -depleting substances (ODS), and under this scheme.

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 41 trademarks or trademarks of KPMG International. NDPPS 655445 Generally, India as a country is put to use for less than 180 days in recovery systems. Depreciation discouraging use of old vehicles and the year of acquisition. allowance is halved (i.e., allowed at diesel vehicles and levies penalties rate of 20 percent of WDV) if the asset An income tax holiday of 10 years on certain nongreen vehicles. These is put to use for less than 180 days in (out of 20 years) was provided for any penalties include an infrastructure the year of acquisition. operation started before March 31, cess in the form of excise duty 2017 for (i) developing or (ii) operating Pollution and ecosystems (payable on the transaction value of and maintaining or (iii) developing, A 100 percent depreciation goods as per excise laws in India) of operating, and maintaining any (40 percent w.e.f. April 1, 2017) is 1 percent applied to owners of small infrastructure facility water supply available for air pollution control petrol, LPG, and CNG cars (less than project, water treatment system, and equipment, such as electrostatic 4 meters in size with engines up to irrigation project. precipitation systems, felt-filter 1200c), 2.5 percent on diesel cars systems, dust collector systems, of certain capacity vehicles (length Material resources and waste scrubber-counter current/venturi/ not exceeding 4 meters and engine India has numerous incentives related packed bed/cyclonic scrubbers, and capacity not exceeding 1500cc), and to material resources and waste. Not ash handling and evacuation systems. 4 percent on other higher engine only are income tax holidays available Depreciation allowance is halved (i.e., capacity vehicles and SUVs. for undertakings related to sanitation allowed at a rate of 20 percent of and sewage system or solid waste Water WDV) in cases where the asset is put management system facilities, but India has numerous incentives to use for less than 180 days in the they are also available for businesses specific to water. Depreciation on year of acquisition. that derive profits from the business such equipment is allowed at the rate of collecting and processing or treating Innovation of 40 percent of written-down value. of for generating India provides a 100 percent deduction It is allowed from the year in which power or producing biofertilizers, for revenue and capital expenditures the asset is put to use. Depreciation biopesticides, or other biological (other than land) incurred by a allowance is halved (i.e., allowed at agents, or for producing biogas or company on scientific research related rate of 20 percent of WDV) in cases making pellets or briquettes for fuel or to the business of the company. where the asset is used for less than organic manure. The tax holiday is not 180 days in the year of acquisition. In addition, a weighted deduction available for enterprises that start the In addition, there is an exemption of 200 percent (150 percent from development/operation/maintenance from excise duties on all items of April 1, 2017 and after April 1, 2020, after March 31, 2017. However, machinery, including instruments, 100 percent of expenditure incurred) under section 35AD, a 100 percent apparatus and appliances or parts, and of expense incurred on in-house deduction of capital expenditure is pipes and fittings required for setting R&D (except expense incurred on allowed for business of infrastructure up of certain water treatment plants. land and building) is available to a facility. Infrastructure facility includes a company engaged in the business Other incentives include 100 percent sanitation and sewage system or solid of or in any business depreciation (40 percent w.e.f. system. of manufacture or production of any April 1, 2017) on machinery installed Another incentive example is article or thing. as part of a water supply project/water 40 percent (w.e.f. April 1, 2017) treatment system and used for the depreciation for solid waste control purpose of providing infrastructure equipment (caustic/lime/chrome/ facilities. Depreciation allowance is mineral/cryolite recovery systems) and halved in cases where the asset is solid waste recycling and resource

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Indonesia

Economic indicators

Indicator Rank* Actual GDP per capita 34 USD 3,604

CPI yr/yr 9 3.0% Real GDP growth 4 5.0%

Working age pop (percent of total) 17 67.1%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 35*/107** 65.85 EPS 21 1. 10 Environmental tax revenue (percent of total tax revenue) - - Renewable energy consumption 5 37.06% CO2 emissions (10yr percent change) 30 51.3% CO2 emissions per capita (metric tons) 34*/115** 1. 9 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies 5 12.87% (percent domestic technologies) Environmental R&D budget (percent total gov. R&D) - - Development of environment-related technologies 31 0.03% (percent inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 43 trademarks or trademarks of KPMG International. NDPPS 655445 Renewable energy and fuels Green buildings against the environmental regulatory Various incentives are available in A 2011 Indonesian Presidential standards are ranked. An import Indonesia specific to the purchase, Instruction provided that leaders of duty exemption is also available use, and production of energy- government institutions in the central for the purchase of equipment and efficient equipment. Incentives range and local governments save water material used in the prevention of from duty exemptions, accelerated and energy within their institutional environmental pollution. depreciation, and tax reductions. domain. It provides reduction targets for electricity of 20 percent, fuel of Finance Regulation No. 3/2012 10 percent, and water use of 10 percent. provides the framework and support for the use of geothermal energy, Water while a solar auction program is also Indonesia imposes taxes on the available under Ministerial Regulation use of water, both surface and No. 17/2013 for the purchase of underground. Both taxes are levied electricity from solar PV power plants. by the subnational governments. Green vehicles Pollution and ecosystems Indonesia provides a luxury goods Though Indonesia does not have a tax exemption for the purchase penalty specific to pollution, it does of green vehicles. have a reputational incentive whereby companies/factories’ performance

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Ireland

Economic indicators

Indicator Rank* Actual GDP per capita 2 USD 62,562

CPI yr/yr 35 -0.2% Real GDP growth 3 5.2%

Working age pop (percent of total) 28 65.1%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 12*/19** 86.6 EPS 19 2.05 Environmental tax revenue (percent of total tax revenue) 9 7.61% Renewable energy consumption 27 6.96% CO2 emissions (10yr percent change) 10 -18.1% CO2 Emissions per capita (metric tons) 17*/41** 7. 6 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies 35 6.4% (percent domestic technologies) Environmental R&D budget ( percent total gov. R&D) 21 1% Development of environment-related technologies 24 0.13% (percent inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 45 trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change A separate relief for expenditures Further political pressure resulted Ireland participates in the EU incurred by companies in acquiring in the suspension of the charges Emissions Trading Scheme, which new ordinary shares of Irish at least until mid-2017 and may be allows for the trading of emission companies engaged solely in suspended further. These charges allowances designed to limit industrial renewable energy projects expired on are not imposed by the Irish Revenue GHG emissions. December 31, 2014, and investments Commissioners, but rather by a made after this date will not qualify for separate body. Solid Fuel Carbon Tax (SFCT) is a self- the relief. assessment tax on the first supply Material resources and waste of solid fuel into Ireland. It applies to Carbon tax is levied on petrol and auto Ireland introduced a carbon tax in peat and coal and is charged at a rate diesel at the rate of EUR 20 per ton of 2010. This tax applies to certain fuels of EUR 20 per ton of CO2 emitted CO2 emitted. There is also a solid fuel that are burned for heating (natural (effective May 1, 2014). Certain relieves carbon tax levied at the rate of EUR gas and heating oil) and for transport are available from the charge, including 20 per ton of CO2 emitted. purposes (petrol and diesel). full relief for fuels used solely for the Green vehicles Mineral tax applies to transport and generation of electricity and peat Ireland allows an accelerated capital heating and process use industries used in installations covered by an allowance regime (100 percent (includes coal). The carbon tax above for EPA-issued GHG emissions permit, in the year of the expense) for fuels also applies to kerosene. A higher and partial relief for coal used in an companies that purchase equipment rate of corporation tax (25 percent) installation covered by a GHG permit. to manufacture certain vehicles and applies to developments on mineral Renewable energy and fuels purchase certain types of vehicles extractions (including petroleum). The tax on consumption of electricity (electric, plug-in, lean burn, hybrid). The Department of Housing, Planning, continues, and the rate for industrial Vehicle Registration Tax (VRT) applies Community and and commercial use of electricity is half on first registration to all motor regulates plastic bags, and a levy is the rate for residential use. Fuels used vehicles in Ireland. There is a reduced collected from retailers where plastic to generate electricity are exempt. VRT rate for certain vehicles based on bags are used. Local authorities CO2 emissions. The rates for cars are Accelerated cap allowances (100 ensure compliance with this levy, based on CO2 emissions of vehicles percent in the year of the expense) are which currently stands at 22c per such that lower level of emissions available to companies for purchases bag. A reduced VAT rate (13.5 percent have less VRT liability. of certain energy-efficient equipment, instead of 23 percent) applies on including certain lighting; efficient In addition, hybrid and plug-in hybrid charges by a recycling company, HVAC systems; efficient motors; electric vehicles may qualify for a including collection of waste. certain and cooling repayment of VRT of up to EUR 1,500/ Innovation systems; electromechanical systems; EUR 2,500, respectively. There is a 25 percent for and solar, wind, and biomass systems, A company’s maximum claim for qualifying R&D expenditures (those which are used in the trade of the capital allowances for owned vehicles incurred wholly and exclusively in company. This scheme has been is linked to the emissions of the car carrying out R&D activities), which extended until December 31, 2017. (e.g., cars with lower emissions have include R&D activities on green can claim relief against higher maximum values for capital technologies. There are no credits tied their income tax liability for certain allowance purposes). directly to specific green technologies. investments in companies engaged Water in energy activities under the Water charges were introduced in Employment and Investment Incentive 2014 for residential customers at a Scheme (EIIS). The legislation includes rate of EUR 1.85 per cubic meter. Due some helpful provisions designed to to political pressure, charges were ensure that renewable energy projects subsequently capped at a maximum of meet the qualifying criteria. EUR 260 per year until the end of 2018.

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Italy

Economic indicators

Indicator Rank* Actual GDP per capita 17 USD 30,507

CPI yr/yr 31 0.5% Real GDP growth 33 0.9%

Working age pop (percent of total) 33 63.9%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 16*/29** 84.48 EPS 12 2.77 Environmental tax revenue (percent of total tax revenue) 4 8.80% Renewable energy consumption 20 12.09% CO2 emissions (10yr percent change) 4 -26.4% CO2 emissions per capita (metric tons) 22*/61** 5.7 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies 21 9.21% (percent domestic technologies) Environmental R&D budget (percent total gov. R&D) 11 2.9% Development of environment-related technologies 8 1.68% (percent inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 47 trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change Green vehicles In addition, every commercial waste Italy participates in the EU Emission Different incentives have been activity is subject to VAT taxation, Trading Scheme. enacted to purchase and manage and in the case of , hybrid, electric, and vehicles, every producer, carrier, and disposal Renewable energy and fuels such as tax exemption and financial operator must register with the Italian Italian incentives specific to renewable support. These incentives are monitoring system. energy and fuels include those applied regulated by different local authorities. to solar electric energy production and Pollution and ecosystems general energy efficiency initiatives. Water Italy has a national tariff method for Italy has a national water tariff that pollution and ecosystems that is First, Italian regulators have developed is applied by local authorities. Also, applied by local authorities. There are an “Eco Bonus” program to support incentives exist with regard to energy also diversified incentives at EU, the installment of energy efficiency efficiencies for hot water production. national, and local levels. equipment, such as the installation of efficient refrigeration, air conditioning, Material resources and waste Innovation and heating. The Eco Bonus is Packaging is regulated by the national Italy offers R&D incentives through redefined/refinanced each year. waste packaging collecting system, the Horizon 2020 program (the largest which defines a taxation rate for every EU research and innovation program Also recently introduced (October package produced or imported in Italy. with close to EUR 80 billion in funding 2016) is an incentive program for which is applied by national, regional, the production of electricity by Producers and users must bear (a) the and local authorities. photovoltaic solar panels installed in cost of collecting used packaging and renovated buildings. waste packaging, (b) extra costs associated with the separated collection In addition, and in compliance with EU of waste packaging, (c) the cost of directives, the Italian Regulator has reusing used packaging, (d) the cost introduced a minimum annual quantity of recycling and salvaging waste of biofuels that gasoline suppliers packaging, and (e) the cost of (“obligated persons”) must introduce disposing of waste packaging. into consumption.

Horizon 2020 is the implementing Horizon 2020 couples research and innovation to the Innovation Union, a Europe 2020 flagship initiative ensure Europe produces world-class science, removes aimed at securing Europe’s global competitiveness. barriers to innovation, and makes it easier for the public Seen as a means to drive economic growth and create and private sectors to work together in delivering jobs, Horizon 2020 has the political backing of Europe’s innovation.12 leaders and the members of the European Parliament who agree that research is an investment in our future and put it at the heart of the EU’s blueprint for smart, sustainable, and inclusive growth and jobs.

12 See https://ec.europa.eu/programmes/horizon2020/en/what-horizon-2020.

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Japan

Economic indicators

Indicator Rank* Actual GDP per capita 13 USD 38,917

CPI yr/yr 32 0.3% Real GDP growth 32 1.0%

Working age pop (percent of total) 37 60.8%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 22*/39** 80.59 EPS 14 2.63 Environmental tax revenue (percent of total tax revenue) 19 5.09% Renewable energy consumption 30 4.48% CO2 emissions (10yr percent change) 19 0.1% CO2 emissions per capita (metric tons) 8*/25** 9.8 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies 16 10.06% (percent domestic technologies) Environmental R&D budget (percent total gov. R&D) 16 1.9% Development of environment-related technologies 1 23.53% (percent inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 49 trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change Regional cap and trade programs equipment (including plug-in hybrid The Ministry of the Environment also exist. As an example, the Tokyo motor vehicles, energy regenerative (MOE) introduced the Japan Voluntary Metropolitan Government Cap-and- type hybrid motor vehicles, and Emissions Trading Scheme (JVETS) Trade Program (Tokyo-ETS) was electric-powered vehicles), meeting in 2005 to support cost-effective introduced in April 2010. Participants certain conditions. greenhouse gas emission reductions to the scheme, such as large office The automobile tax, imposed on and emissions trading. Voluntary buildings and factories, have to standard-sized cars and trucks every participants setting emission reduction achieve targets (cap setting) by year, is reduced by 50–75 percent targets may obtain subsidies for their reducing their CO2 emissions, and for the first year on environmentally facilities for CO2 reduction and earn if necessary, offsetting the excess friendly vehicles. The light vehicle profits from transferring originally emissions with credits purchased tax, also imposed yearly, is reduced assigned emission allowances (Japan from other participants, credits by 25–75 percent for the first year Allowances or JPA) when they achieve obtained from small to medium-sized on environmentally friendly vehicles. the targets. In 2008, an integrated facilities in Tokyo, credits obtained The motor vehicle weight tax, imposed domestic market for emissions trading from entities outside Tokyo, or when a motor vehicle inspection was introduced as an experiment to renewable energy certificates. If a certificate is obtained or a registration facilitate technology development and participant successfully reduces its number for a light motor vehicle emission reduction efforts. emissions and the reduction exceeds is obtained, is reduced by 25–100 the yearly target, it is entitled to The government is developing a percent on environmentally friendly carbon credits certified by Tokyo Joint Crediting Mechanism/Bilateral vehicles. The automobile acquisition metropolitan government. Offset Credit Mechanism (JCM/ tax, imposed when a car is acquired, BOCM) program to incentivize carbon Renewable energy and fuels is reduced by 20–100 percent on mitigation projects, such as utilizing Both incentives and penalties exist environmentally friendly vehicles. leading low-carbon technologies and specific to the renewable energy and Material resources and waste infrastructure. fuel space. Some local governments have The scheme aims to achieve its As an example, a company may introduced an industrial waste tax with objectives with simplicity and claim increased initial depreciation the aim of reducing industrial waste practicality compared with the CDM of 30 percent of the acquisition cost and improving waste recycling. scheme under the Kyoto Protocol, but of certain new assets such as new Innovation to maintain environmental integrity energy utilization equipment and CO2 Companies are eligible for R&D tax and transparency as well. discharge control equipment meeting credits, the amount of which depends certain conditions. A petroleum and coal tax is applied to on several factors including total R&D those who ship crude oil, petroleum Taxes are imposed on gasoline expenditure for a , R&D ratio products, gaseous hydrocarbons, collected from manufacturing facilities (calculated by ), and size of or coal from extracting stations or picked up from the bonded areas, company. The R&D credit is not limited or withdraw crude oil, petroleum oil and gas (for cars) collected from to “green” specific activities but must products, gaseous hydrocarbons, or the filled fields or picked up from the be technological and scientific in coal from bonded areas. In addition, bonded areas, and diesel oil picked nature to qualify. there is a special provision/rate up from the primary distributors or for climate change (additional tax) exclusive agencies. for crude oil, petroleum products, Green vehicles gaseous hydrocarbons, or coal based A company may claim increased on the 2012 introduction of “Carbon initial depreciation of 30 percent of Dioxide Tax of Global Warming the acquisition cost of certain new Countermeasure,” which aims to assets such as new energy utilization control the emission of energy- equipment and CO2 discharge control originated CO2.

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Malaysia

Economic indicators

Indicator Rank* Actual GDP per capita 27 USD 9,360

CPI yr/yr 13 1.8% Real GDP growth 6 4.2%

Working age pop (percent of total) 13 68.4%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 29*/63** 74.23 EPS - - Environmental tax revenue (percent of total tax revenue) 27 1.45% Renewable energy consumption 28 6.80% CO2 emissions (10yr percent change) 28 49.4% CO2 emissions per capita (metric tons) 14*/37** 8.0 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies 29 8.35% (percent domestic technologies) Environmental R&D budget ( percent total gov. R&D) - - Development of environment-related technologies 25 0.09% (percent inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 51 trademarks or trademarks of KPMG International. NDPPS 655445 Renewable energy and fuels In addition, certain locally and income tax exemption equivalent Malaysia offers various incentives nonlocally produced machinery to 100 percent of qualifying capital related to renewable energy. As an and equipment purchased for the expenditures (Investment Tax example, an Investment Tax Allowance generation of energy using biomass Allowance) incurred within a period of 100 percent of qualifying capital are exempt from import duty and of 5 years). The allowance can be expenditures incurred for certain sales tax. offset against 70 percent of statutory activities/projects, including green income for each year of assessment Material resources and waste technology assets (for calendar year for companies located in WEP and To reduce operation costs and 2013–2020), is available. The allowance undertaking qualifying activities. promote environmental preservation, can be offset against 70 percent of Any unutilized allowances can be companies providing energy statutory income. Green technology carried forward to subsequent years conservation services are eligible assets are defined in the MyHijau until fully utilized. for various incentives including the Directory (which is approved by Pioneer and Investment Tax Pollution and ecosystems the Minister of Finance) as a green Allowance described above. Companies that undertake forest technology product, equipment, or plantation projects are eligible for system used to conserve the natural In addition, incentives are available to Pioneer Status and Investment Tax environment and resources that Waste Eco Parks (WEP) developers in Allowance incentives under the minimize and reduce the negative the form of an income tax exemption Promotion of Investments Acts of impact of human activities. Unutilized of 70 percent on statutory income 1986. Also, companies that undertake allowances can be carried forward to derived from rental of buildings, fees forest plantation projects can apply subsequent years until fully utilized. received from the usage of waste for incentives, such as a tax deduction receiving and separation facilities, In addition, companies undertaking equivalent to the amount invested in a and wastewater treatment facilities generation of energy from renewable company that undertakes an approved located in WEP from 2016 until resources are eligible for Pioneer forest plantation project. 2025, if developers design/develop Status incentives, which provide the infrastructure within the WEP income tax exemption of 100 percent incorporating certain criteria project. of statutory income for 10 years (unabsorbed capital allowances as There is also an incentive for WEP well as accumulated losses incurred managers (70 percent tax exemption during the pioneer period can be on statutory income derived carried forward and deducted from the from services activities related post-pioneer income of the company) to management, maintenance, or Investment Tax Allowances of supervision, and marketing of WEP) 100 percent on qualifying capital and an incentive for WEP operators expenditures incurred within a (100 percent tax exemption on period of 5 years (which can offset statutory income for a period of 100 percent of the statutory income 5 years, derived from qualifying for the year of assessment). activities undertaken in WEP or

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Mexico

Economic indicators

Indicator Rank* Actual GDP per capita 30 USD 8,555

CPI yr/yr 8 3.4% Real GDP growth 16 2.3%

Working age pop (percent of total) 22 65.9%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 30*/67** 73.59 EPS - - Environmental tax revenue (percent of total tax revenue) 28 -1.78% Renewable energy consumption 23 9.35% CO2 emissions (10yr percent change) 24 20.4% CO2 emissions per capita (metric tons) 31*/83** 4.0 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies 22 9.16% (percent domestic technologies) Environmental R&D budget (percent total gov. R&D) 18 1.6% Development of environment-related technologies 25 0.09% (percent inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 53 trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change (whether kinetic or potential, from any Pollution and ecosystems Mexico has recently refocused its natural or manmade body of water), Though no national tax revenue attention on environmental protection. ocean power in its various forms, incentives and penalties exist, First, in 2016, Mexico passed the , and power from municipal programs are available. General Law for Environmental biomass or waste. As an example, Mexico City provides Protection (“Ley General de Equilibrio that have a certified In addition, Mexico imposes an excise Ecológico y la Protección al Ambiente” agenda to mitigate their environmental tax on the commercialization of fossil or “LGEEPA”), which established impact with tax reductions. fuel derivatives. a National Emission and Pollution In addition, tax credits are available to Agents Transfer Registry (RETC) and Green vehicles corporations that recycle or reprocess imposes penalties on entities that The federal government published part of their solid waste. create environmental damage (not new provisions providing a credit for Innovation just as a result of carbon emissions). investments in power supply units Mexican agencies, such as the Second, the General Law for Climate for electric vehicles. Also, in the new National Council of Science and Change (“Ley General de Cambio income tax provisions, deducibility Technology (CONACYT), provide Climático” or “LGCC”) was enacted. limits were increased for green grants for various R&D projects, This law establishes an additional vehicles for acquisition and leasing, some specific to green technology. National Registry of Emissions (RENE) compared to the limits on standard As an example, the CONACYT and where entities with yearly emissions vehicles. Furthermore, state vehicle the Ministry of Energy established greater than 25,000 tons of CO2 tenure tax is usually imposed for a sectorial fund, allocated each year equivalents report annual emissions. both the acquisition and through tender bids, which specifies of vehicles. The rates and mechanics In addition, Mexico established a the required specific activities for for calculation vary from state to Clean Energy Certificate Program that particular year. The subjects state. Hybrids and plug-in vehicles are (“Certificados de Energía Limpia” or covered by these tender bids are, usually exempt from this state tax. “CELs”). This cap and trade program among others, renewable sources of provides that entities dedicated to the Green buildings energy, energy efficiency, use of clean generation of electricity will be able There are no national tax incentives technologies, and diversification of to obtain CELs, while a market will in the green building space, though primary sources of energy. be established for those CELs, which local incentives do exist. As an would provide entities with additional example, Mexico City offers real revenues to produce efficient forms tax reductions for certified of energy generation. The market is sustainable buildings. expected to be launched in 2018. Water Renewable energy and fuels Water service is the responsibility of Mexican Income provides each Mexican state. As such, there are a 100 percent immediate deduction no federal tax penalties on water use. for investment in renewable energy Material resources and waste equipment. Examples of renewable Mexico provides a limitation on the energy sources include solar deductibility of perishable goods for power, wind power, hydro power income tax purposes.

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 The Netherlands

Economic indicators

Indicator Rank* Actual GDP per capita 8 USD 45,283

CPI yr/yr 29 0.5% Real GDP growth 18 2.1%

Working age pop (percent of total) 26 65.2%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 20*/36** 82.03 EPS 2 3.63 Environmental tax revenue (percent of total tax revenue) 3 9.30% Renewable energy consumption 29 4.65% CO2 emissions (10yr percent change) 16 -2.8% CO2 emissions per capita (metric tons) 7*/23** 10.1 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies 27 8.46% (percent domestic technologies) Environmental R&D budget (percent total gov. R&D) 22 0.6% Development of environment-related technologies 11 1.13% (percent inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 55 trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change electrical machines, improved safety The Netherlands also offers an Early The Netherlands continues to of storage of chemicals, , Adopter Project (EAP) for companies participate in the EU Emissions recycling, and waste. They should adopting an energy efficiency Trading Scheme. also be more expensive than the less technology provided by either small eco-friendly alternatives. Voluntary or medium-size enterprises or Renewable energy and fuels depreciation through VAMIL is not for a consortium with a research The Environmental Investment limited, and 100 percent of the cost organization adopting an energy Deduction scheme (MIA) and the of the qualifying asset (the maximum efficiency technology. The program Random Deductions for Environmental investment costs that are taken is aimed at improving industrial Investments (VAMIL) programs are into account are EUR 25 million/ energy efficiency. intended to stimulate environmentally qualifying asset) can be depreciated, friendly investments by businesses Other incentive programs available provided that no prior use of the and entrepreneurs through providing include the Stimulering Duurzame asset has occurred, and certain incentives to choose the least polluting Energieproductie/Encouraging formal conditions that are not directly alternative when an investment is Production applicable to renewable energy are made. All businesses and entrepreneurs (SDE+), which consists of an operating met. Note that assets for which this paying income tax or corporate income grant, subsidizing renewable energy tax incentive is applicable can be used tax in the Netherlands are eligible to projects based on energy prices for as part of the production of energy participate in the MIA and/or VAMIL 15 years, as well as a tax incentive from renewable sources. schemes. Eligible technologies are listed to invest in “green funds” available on the “Environmental List” drawn up An additional 58 percent deduction to individuals and private investors. by the Ministry of Infrastructure and (up from 41.5 percent in 2013) for the Private investors are not taxed on Environment, which is updated annually. amount invested in qualifying assets is capital invested in green funds, and available under the energy investment the maximum amount of invested MIA offers a tax deduction of allowance (Energie-investeringsaftrek, capital exempted on an individual 36 percent of the amount invested EIA) if certain criteria are met, basis is EUR 57,213. in qualifying environmentally friendly including (i) investments must be assets, and VAMIL provides voluntary The Netherlands also levies various included on the “energy list”; (ii) the depreciation on environmentally taxes, such as an energy tax on maximum amount of investment for friendly investments. In doing so, energy providers of natural gas and which EIA can be claimed per calendar MIA and VAMIL allow the investor electricity (since 1996). year per is EUR 120 million to decide when to write off the (pro rata calculation applies in the case The 2016 energy tax rates are investment costs, offering liquidity of transparent entities); and (iii) the different for natural gas and electricity (cash flow) and interest advantages total amount of qualifying investments and vary for consumer/industrial/ to investors. must be more than EUR 2,500 per vehicle use. The yearly energy tax is To be eligible for the VAMIL scheme, calendar year. reduced by EUR 310.81 per electricity assets must be included on the connection for homes and offices Also, the additional 36 percent “Environmental List”. This list has since energy consumption is viewed deduction of the amount invested in qualified assets (now 270 investments). as a basic need. qualifying environmentally friendly A request to include an eco-friendly assets under the MIA has similar A coal tax is levied on producers technology on this list can also be criteria as the EIA. The EIA and the and importers of coal, and a tax on submitted. Qualifying assets generally MIA cannot be applied to the same transportation fuels is also levied. are business assets aimed at more asset simultaneously. efficient production, less emissions, less pollution, efficient material use,

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Green vehicles Water Innovation The Netherlands has several tax Various subnational water levies exist. A special regime, referred to as the benefits in place for electric/green “innovation box” (formerly known as Material resources and waste vehicles. The MIA can be used by the patents box), was introduced in control levy companies to invest in electric or 2007, largely designed to stimulate The packaging tax was abolished in hybrid vehicles, or a charging station. R&D activity by Dutch businesses. 2013 and replaced by a packaging The regime, which does not apply to In addition, vehicles emitting 0 CO2 waste control levy. Companies that trademarks and logos, was extended per kilometer are exempted from introduce more than 50,000 kilos of in 2008 to cover intangible assets motorway tax in 2016. Vehicles packaging on the Dutch market need generally derived from R&D that emitting 1 to 50 grams per kilometer to pay a certain amount p/kg to the benefit from the R&D incentive (mostly plug-in hybrids or semielectric) Waste Fund Packaging depending on regime for . Under the pay half of the normal motorway taxes the packaging material. innovation box regime, income due in 2016. In addition, leased electric attributable to qualifying assets vehicles have a reduced tax rate that Municipal waste levy in excess of development costs is based on CO2 emissions per km There are municipal levies for the benefit from an effective tax rate and the year in which the license collection and processing of waste. of approximately 5 percent. Even if plate is registered in the Netherlands. The rates differ for individuals and part of the development activity is The rate is 4 percent of the catalog businesses and per municipality. For outsourced, it may still be possible to price for electric vehicles, 15 percent example, the 2016 rate in Amsterdam tax the results at the low 5 percent for vehicles emitting 1 to 50 grams for individuals is EUR 235 ( rate. Currently there are plans to (and registered in 2016), and goes up to occupant) and EUR 313 (multiple change the innovation box in order 25 percent for vehicles emitting more occupants), and for businesses is EUR to meet international standards. than 106 CO2/km. There is no BPM 312 (small businesses, <176 liters) However, taxpayers may be limited in (tax on new car purchases) for electric and EUR 662 (large businesses, up to the use of the innovation box due to vehicles in 2016 and 2017. The tax for 396 liters). the introduction of the nexus approach other types of vehicles depends on and potential exclusion of certain the CO2 emissions per km. Food The Verduurzamen voedselproductie innovations. Local governments (provinces or (SBIR) is a sustainable food production There are several other R&D municipalities) have different subsidy program aimed at more efficient use of incentives, such as the Demonstration schemes in place for companies resources and use of residual streams Energy-Innovation (DEI) program, purchasing electric vehicles. For for more sustainable food production. which targets energy innovation instance, Amsterdam provides up to It encourages more efficient use by investment projects that have EUR 5,000 for electric passenger cars implementing innovations in systems surpassed the prototype phase and (used for business), vans, and taxis, and processes, countering the amount are applied into the market just before and also up to EUR 40,000 for plug-in of waste and more efficient use of the large-scale market introduction. trucks or buses. residual streams within the agri-food The Green Deal program allows Green buildings chain. Companies involved in this organizations to work together with Depreciation is granted on qualifying program receive an initial subsidy of the government upon successfully environmentally friendly assets under EUR 50,000 to perform a feasibility implementing a sustainability project, the VAMIL program. study. If their project seems feasible, a further subsidy could be granted. alleviating barriers for companies and citizens to cooperate to stimulate transition to a sustainable economy.

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 57 trademarks or trademarks of KPMG International. NDPPS 655445 New Zealand

Economic indicators

Indicator Rank* Actual GDP per capita 14 USD 38,345

CPI yr/yr 22 1.3% Real GDP growth 7 4.0%

Working age pop (percent of total) 29 64.9%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 7*/11** 88 EPS - - Environmental tax revenue (percent of total tax revenue) 22 4.19% Renewable energy consumption 7 30.78% CO2 emissions (10yr percent change) 17 -0.4% CO2 emissions per capita (metric tons) 16*/40** 7. 7 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies 28 8.41% (percent domestic technologies) Environmental R&D budget (percent total gov. R&D) 1 9.4% Development of environment-related technologies 22 0.14% (percent inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change systems, the program uses SEANZ or charging infrastructure in areas The New Zealand Emissions Trading installer/system integrator members where demand is not fully developed, Scheme (NZ ETS) is the government’s only, who can analyze profiles and increasing demand for EVs, or principal policy response needs, design, supply, install, and developing innovative products or to climate change. commission systems. systems to take advantage of growing EV usage. It supports global efforts to reduce In addition, the Energy Efficiency greenhouse gas emissions while and Conservation Authority (EECA) is Green buildings maintaining economic productivity. the government agency that works There are no central government The scheme is in its early phases and to improve the energy efficiency of incentives for building or occupying the government is looking for ways to New Zealand homes and businesses green buildings in New Zealand. improve it. The NZ ETS puts a price on and encourage the uptake of Local governments must take a greenhouse gas emissions, providing renewable energy. The program “sustainable approach” to town an incentive for people to reduce encourages people to be more energy planning and buildings; however, there emissions and plant forests to absorb efficient, reduce carbon emissions, is no further guidance or structure. carbon dioxide. The forestry industry and to renewable energy at The NZ Building Council provides was the first to enter into the scheme , at work, and on the . resources and rating schemes rather in 2008, followed by energy, fishing, Grants are available through Warm than incentives. industry, and liquid fossil fuels in 2010 Up New Zealand: Healthy Homes, and, finally, synthetic gases and waste for ceiling and underfloor insulation Water in 2013. The Environmental Projection for rental occupied by There are local charges for water Authority (EPA) ensures compliance low-income tenants. use and wastewater. In addition, under the Climate Change Response the New Zealand Water Efficiency Green vehicles Act 2002. Labeling Scheme (WELS) is designed New Zealand does not manufacture to provide information, through Certain sectors are required to acquire vehicles, but the government announced labeling at the point of sale, to and surrender emission units to in May 2016 its electric vehicles (EVs) consumers buying products that use account for their direct greenhouse program, aimed at increasing the uptake water. The labeling provides clear gas emissions or the emissions of EVs in New Zealand. The program information on a product’s water associated with their products. includes a review of tax depreciation efficiency and water consumption in a rates and the method for calculating An emission unit represents one standardized form. The WELS applies fringe benefit tax for EVs to ensure EVs metric ton of carbon dioxide, or the to washing machines, dishwashers, are not being unfairly disadvantaged. equivalent of any other greenhouse lavatories, showers, taps, and urinals. gas (carbon dioxide equivalent). In addition, a Low Emission Vehicles Material resources and waste Contestable Fund was established as Renewable energy and fuels The Act part of the government’s ambitious There are no central government encourages a reduction in the amount EVs program announced in May 2016 incentives to assist consumers of waste generated and disposed to help accelerate the uptake of EVs or businesses in New Zealand to of, and is aimed at reducing the in New Zealand. The fund will provide implement solar or other on-site environmental harm of waste and up to NZD 6 million per year (up to renewable generation technologies. providing economic, social, and NZD 4 million in 2016/17) to cofund, The majority of NZ’s energy is already cultural benefits for New Zealand. up to 50 percent, projects with private sourced by renewable energy from The Act also allows for regulations and public sector partners in areas hydro, geothermal, and wind power. controlling the disposal of certain where commercial returns are not products. Other local initiatives include Kiwibank, a state-owned bank, strong enough yet to justify full private free household waste and recycling officially launched its Sustainable investment. These projects will need collection, free recycling drop-off Energy Program in November to contribute to at least one of the facilities, and free inorganic and 2012—a first in New Zealand. following objectives: increasing the e-waste collections. Designed to assist consumers to variety and supply of EVs available, install and implement their own improving the availability of servicing

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 59 trademarks or trademarks of KPMG International. NDPPS 655445 Food Pollution and ecosystems (ERA) scheme allows businesses that Some local governments have set The Resource Management Act cause environmental damage when up waste minimization plans, which 1991 promotes the sustainable they discharge a contaminant to set include goals around organic waste; management of natural and money aside to cover their monitoring however, there are no penalties or physical resources. In addition, the or restoration costs. taxes built into these plans. Environmental Restoration Account

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Poland

Economic indicators

Indicator Rank* Actual GDP per capita 25 USD 12,316

CPI yr/yr 27 0.8% Real GDP growth 11 2.8%

Working age pop (percent of total) 9 69.5%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 21*/38** 81.26 EPS 10 2.99 Environmental tax revenue (percent of total tax revenue) 15 6.01% Renewable energy consumption 21 11.08% CO2 emissions (10yr percent change) 18 0.0% CO2 emissions per capita (metric tons) 15*/39** 8.0 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies 4 13.13% (percent domestic technologies) Environmental R&D budget (percent total gov. R&D) 3 6.1% Development of environment-related technologies 19 0.25% (percent inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 61 trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change Water recycling of packaging waste. The fee Poland has no explicit carbon tax, but The Polish government plans to is charged by municipalities and as a member of the EU, it participates implement new water regulations regulated at the national level. in the EU Emissions Trading Scheme. (similar to EU regulations) that will Incentives are also available, such as require everyone (including power Renewable energy and fuels the National Fund for Environmental plants) to pay a fee for water. Poland’s program, maintained by Protection and Water Management the National Fund for Environmental Currently, there is a national program Rational waste management or Protection and Water Management, for Environmental Protection and Water Rational recycling management grants subsidies for entrepreneurs Management. Wastewater is managed (Racjonalna Gospodarka Odpadami) in the construction, expansion or under the National Programme of programs, which offer incentives in the reconstruction, or the installation of Municipal , which form of loans and grants for various renewable energy projects (e.g., wind aims to improve the status of surface uses, such as the construction of new farms, small hydro power plants, and water and ground water by sewage and modernized facilities related to solar). In addition, the country taxes treatment. There are grants available recovery and recycling. the extraction of certain minerals, for the construction, expansion, or Food such as copper, silver, natural gas, and modernization of municipal wastewater The Polish parliament is currently crude oil, and imposes an excise duty treatment plants. drafting a law that aims to prevent on operations (e.g., purchase and sale) Operational Programme Infrastructure local retailers from discarding unsold connected with gas and coal products. and Environment is another national food that is still fit for consumption. Green vehicles program to support a low-carbon Under the plan, owners of certain The National Fund for Environmental economy, environment protection, retail outlets will be required to donate Protection and Water Management prevention and adaptation to climate such food to charity organizations, offers low-emission urban public change, and transport and energy with intentional discards punishable transport subsidies for the purchase security. There are also funds by financial penalties. of new trolleybuses, trams, or buses available for the efficient use of water Pollution and ecosystems with hybrid electric or gas drives. projects, such as for the construction, Enterprises with the status of an reconstruction, or repair of water Green buildings R&D center are exempt from Poland’s equipment to help reduce the effects Incentive/Subsidy programs for forest tax if the forest is used for of floods and drought, implementation building energy-efficient homes purposes of R&D. Also, of rainwater management systems, or buying energy-efficient flats may be exempt from some personal and construction or modernization of are offered by National Fund for income tax on the basis of thermo- sewage treatment plants. Environmental Protection and Water modernization bonus of buildings Management. The subsidies are in the Material resources and waste (repaying part of the loan taken for form of partial repayment of the bank Poland imposes taxes on entities thermal modernization if energy loan for the construction/purchase of involved with the mineral extraction of consumption is reduced). In addition, a house or an apartment. There are copper, silver, oil, or natural gas. if an investment in renewable energy also incentives for the construction of sources is made, an agricultural tax Another example of taxes on waste new energy-efficient public buildings deduction may be available. is Poland’s product fee, which is an and collective residence, as well as environmental fee placed on domestic Innovation improvement and market packaged products. The need Several national programs encourage energy-saving investments. to pay a product fee arises when R&D in Poland, such as the GreenEvo an introductory (i.e., manufacturer) project, which promotes innovative package does not comply with the environmental technologies (green statutory requirement of recovery and technologies).

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Economic indicators

Indicator Rank* Actual GDP per capita 21 USD 19,832

CPI yr/yr 26 0.9% Real GDP growth 25 1.4%

Working age pop (percent of total) 27 65.2%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 5*/7** 88.63 EPS 18 2.13 Environmental tax revenue (percent of total tax revenue) 13 6.41% Renewable energy consumption 11 25.56% CO2 emissions (10yr percent change) 6 -24.4% CO2 emissions per capita (metric tons) 30*/76** 4.4 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies 26 8.73% (percent domestic technologies) Environmental R&D budget (percent total gov. R&D) 6 4.0% Development of environment-related technologies 28 0.06% (percent inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 63 trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change Green vehicles Pollution and ecosystems Portugal participates in the EU Various incentives and penalties are Portugal imposes a waste Emission Trading Scheme (EU-ETS). available specific to use of vehicles in management tax specific to waste Portugal also has a carbon tax that Portugal. As an example, a vehicle tax, management facilities. applies to sectors that are not covered based on engine capacity and level of The government also provides an by the EU-ETS. CO2 emissions, is levied on vehicles. exemption from income tax for real In addition, an annual circulation tax, Renewable energy and fuels estate investment funds that invest an ownership-based tax, is applied Portugal encourages renewable a specific portion of their funds in to vehicles, including passenger energy and fuel reduction programs forestry assets, as well as a reduced vehicles, vehicles used for passenger through various incentives, such income tax rate for the investors in and goods transport, for private as a 50 percent reduction of the those funds. Municipal property tax transport of goods and for transport municipal property tax rate applicable and transfer taxes may services, motorcycles, boats, and to buildings used for the production also be exempt, if certain buildings private aircrafts. The tax amount varies of renewable energy and for rustic are classified as forest intervention depending on the engine capacity and buildings located in classified areas areas (zif), or buildings are integrated the level of the CO2 emissions. (ecosystem services). Also, there in land exchange programs or is an exemption from the Special Green buildings used for agricultural, forestry, or Contribution on the Energy Sector for Real estate transfer taxes may be forestry-grazing purposes. companies operating wind, solar, and exempted if building energy efficiency small hydro power plants. is updated in certain urban properties. Penalties are also imposed, such as Municipalities may also apply a a tax on oil products used as fuel or reduction to the municipal property carburant in any type of nonstationary tax rate applicable to urban engine, and on the other hydrocarbons properties considered “green” or destined to be used, sold, or to be “energy efficient,” based on energy consumed in use as fuel (with the consumption. exception of peat and natural gas). Material resources and waste Since 2015, an additional contribution Portugal applies a special contribution is due relating to CO2 emissions. This (not a tax) to lightweight plastic bags contribution is levied on gasoline, oil, (EUR 0.08/bag). diesel, (LPG), natural gas, fuel oil, coke and coal.

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Economic indicators

Indicator Rank* Actual GDP per capita 26 USD 9,465

CPI yr/yr 36 -0.5%

Real GDP growth 5 4.8%

Working age pop (percent of total) 16 67.2% * = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 19*/34** 83.24 EPS - - Environmental tax revenue (percent of total tax revenue) - - Renewable energy consumption 14 21.68% CO2 emissions (10yr percent change) 3 -30.0% CO2 emissions per capita (metric tons) 32*/88** 3.5 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies 20 9.55% (percent domestic technologies) Environmental R&D budget (percent total gov. R&D) 3 4.9% Development of environment-related technologies 30 0.04% (percent inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 65 trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change In addition, there are incentives of 2 percent of income resulting Romania does not currently have a for biofuels. from selling wood mass (excepting carbon tax. Draft regulations proposing the ones used for household heating Green vehicles such a tax did not pass. Romania and ornamental trees) is payable by The other major Romanian funding participates in the EU cap and the forestry administrator or owner source for green projects is the trade program. to the EFA. Environment Fund Administration Renewable energy and fuels (EFA). The nonreimbursable funds Producers of packaging and packed One of the two major sources of managed by EFA cover: products, as well as importers of funding for purchasing energy-efficient packed products, are required to reach ——Incentives for acquisition of electric equipment in Romania is the Structural annual recovery and recycling targets vehicles and Cohesion Funds 2014–2020 (SCF). for packaging waste. If the targets are ——Incentives for acquisition of not reached, a tax is applied to the not With respect to the SCF, there is a new vehicles. reached target and paid to the EFA. wide range of intervention topics (e.g., R&D projects and projects that An “environmental stamp” tax is In addition, a contribution of 3 percent increase production capacity) that, payable to the EFA at the time a of the income/earnings from ferrous indirectly, have a focus on sustainable vehicle is registered for the first time and non-ferrous metallic waste, development represented also by to circulate in Romania. The value including the dismantled goods, should the acquisition of energy-efficient of the “green stamp” is calculated be directed to the Environmental Fund equipment as a horizontal objective taking into account the CO2 emissions by the related waste generator. of the Structural Funds available in (g/km), engine cylindrical capacity Pollution and ecosystems Romania for 2014–2020. (ccm), and pollution norm of the Penalties are imposed on pollutants vehicle. Currently, draft regulation Renewable energy production discharged into the atmosphere and proposing cancelation of this is also stimulated in Romania. water, though they are not governed tax starting January 1, 2017 was The national target set for Romania by the EFA. discussed and apparently approved is 24 percent renewable share in by the Romanian Parliament, but not Innovation total energy consumption for 2020 enacted by the Romanian president, Romania provides funding via (without including large hydro plants), and is not yet published in the Official financing at special rates for various which includes electricity, heating, Journal. R&D projects. The rates depend cooling, and transport. Accordingly, mainly on type of project and applicant the National Renewable Action Plan In addition, the EFA implements the size category. Specifically identified for the period 2007–2020 sets the “Program for reduction of greenhouse green projects relate to the following following targets: 35 percent by 2015 gases emissions in transport, by smart specialization areas: and 38 percent by 2020. A number promoting non-polluting and efficient of green certificates are granted for from energetic point of view transport 1. Bioenergy – biogas, biomass, each MWh delivered into the system vehicles.” The purpose of the program biofuel by renewable energy generators. is to support the purchase of new 2. electric or hybrid transport vehicles Also, there is a support mechanism with incentives. 3. Energy for high-efficiency Combined Heat and Power Plant (CHPP) producers, for Water 4. Increasing energy efficiency electricity produced in high-efficiency Romania’s environmental fund can be in generation, transmission, CHPPs. Producers must sell the entire used for financing projects specific distribution, and consumer usage electricity produced to be eligible. to protection of water resources, 5. Conventional, unconventional, and CHPP producers using renewable such as integrated water supply renewable energy resources sources have the right to choose systems, water treatment plants, and between benefiting from the above wastewater treatment plants. 6. Clean technologies for producing mentioned scheme or the incentives energy from fossil fuels Material resources and waste granted for producing energy from For stimulating reduction of natural 7. New generation energy systems renewable sources. resources consumption, a contribution

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 8. Environment and climate change The Environmental Fund can also be used for the following types of 9. Optimal use of conventional and projects: unconventional water resources ——Reduction of impact on atmosphere, water, and soil, including air 10. Managing the risk induced by quality monitoring climate change upon resources ——Reduction of noise level 11. Transport equipment (next- generation vehicles and green and ——Waste management energy-efficient technologies) ——Biodiversity conservation 12. Equipment for the production ——Reforestations of bio-resources (technologies, equipment, and technical systems ——Increase of public awareness on environmental protection for the production of bio- ——Renewable energy resources) ——Clean technologies 13. Remediation technologies (technologies for remediation and ——R&D on environmental protection and climate change waste recovery). ——Others (e.g., clean transport, greenhouse, bicycles runway).

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 67 trademarks or trademarks of KPMG International. NDPPS 655445 Russia

Economic indicators

Indicator Rank* Actual GDP per capita 28 USD 8,929

CPI yr/yr 5 5.4% Real GDP growth 35 -0.2%

Working age pop (percent of total) 7 69.9%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 18*/32** 83.52 EPS 24 0.60 Environmental tax revenue (percent of total tax revenue) - - Renewable energy consumption 32 3.25% CO2 emissions (10yr percent change) 21 11.5% CO2 emissions per capita (metric tons) 5*/18** 12.5 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies 11 11.12% (percent domestic technologies) Environmental R&D budget (percent total gov. R&D) 25 0.1% Development of environment-related technologies 17 0.32% (percent inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change According to the Tax Code of the RF, Material resources and waste In Russia, carbon emissions are coal, gas, and petroleum products Packaging in Russia may be subject subject to the payment of fees are deemed minerals subject to to an ecological fee. Similar nontax for each ton of carbon emitted the mineral extraction tax, together initiatives are in place for consumption into the atmosphere or water with natural salt and nonmetallic waste and production waste. (pollutant charge). This obligation to raw materials. The Federal Act on consumption pay the pollutant charge arises in and production waste constitutes Green vehicles accordance with the Federal Act on the duty of manufacturers and/or The owners of environmentally environmental protection. importers of goods to guarantee unfriendly vehicles may be subject the utilization of goods after their Renewable energy and fuels to a higher rate of transport tax if consumption qualities have expired. Russia provides various incentives to stipulated by the constituent subjects encourage the use of energy-efficient of the RF in their regional legislation. The ecological fee, a novelty of assets. For example, accelerated The RF Tax Code delegates them Russian legislation, which came into depreciation for certain assets, with the power to establish different effect January 1, 2016, is paid by including energy-efficient assets transport tax rates, depending on the those manufacturers and/or importers approved by the government of the class of energy efficiency (also called that are not able to utilize waste on Russian Federation (RF), is available. ecological class) of the vehicle. their own. In addition, these assets may be Water Subnational regions have also exempt from property tax. The tax for water use is governed implemented various incentives. Nontax policy is also used to encourage by the RF Water Code and penalties For example, the Republic of the production of renewable energy in are governed by the RF Code of Tatarstan established a property tax Russia. Incentives for the generation Administrative Violations. The water exemption for assets used in the of renewable energy include grant tax is levied differently depending on recycling of waste. subsidies from the federal budget to the type of use, which can assume Pollution and ecosystems compensate the costs of technological one of the following forms: (1) water Russia’s Act on Environment connection; the use of a system of intake, (2) use of water area, (3) use Protection, not its revenue agency, green certificates, which confirm the of water for hydroelectric power penalizes pollution activities. value of the generation of renewable production, and (4) rafting. Moreover, energy; and grants of a share of the the RF Water Code provides collection costs from capacity payments on the of separate nontax payment for the wholesale . usage of pools and conclusion of water use agreement. The tax rates Conventional fuels are taxed in Russia vary depending on the types of water through the mineral extraction tax. use and particular river basin.

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Economic indicators

Indicator Rank* Actual GDP per capita 5 USD 52,961

CPI yr/yr 33 0.0% Real GDP growth 19 2.0%

Working age pop (percent of total) 4 72.8%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 10*/14** 87.04 EPS - - Environmental tax revenue (percent of total tax revenue) - - Renewable energy consumption 35 0.52% CO2 emissions (10yr percent change) 34 62.4% CO2 emissions per capita (metric tons) 10*/27** 9.4 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies 24 9.13% (percent domestic technologies) Environmental R&D budget (percent total gov. R&D) - - Development of environment-related technologies 18 0.29% (percent inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change as to spur the growth of the solar Water Paris agreement industry in Singapore and contribute The Water Tariff covers the costs Singapore ratified the Paris Agreement to Singapore’s aim of adopting incurred in various stages of water on September 21, 2016, formalizing 350 Mega--peak of solar production process—collection of its pledge to reduce its emissions power by 2020. rainwater, treatment of raw water, and intensity by 36 percent from 2005 distribution of treated potable water levels by 2030 and to stabilize Investment in renewable energy to customers through an extensive emissions with the aim of peaking companies nationwide water pipe network. around 2030. This pledge builds on The Merger and Acquisition scheme The Water Tariff is charged based on the existing commitment to reduce, provides an allowance of 25 percent the amount of water consumed. A by 2020, greenhouse gas emissions of the value of acquisitions, subject water conservation tax is also imposed by 16 percent from the business-as- to a maximum of SGD 10 million for certain levels of water consumption. usual level, which Singapore is on for each year of assessment. It also A Waterborne Fee (WBF) and the track to meet. provides deductibility of transaction cost and relief. This is Sanitary Appliance Fee (SAF) are Carbon tax a general scheme that applies to levied to offset the cost of treating In the 2017 Budget, the government industries including but not limited to used water and to operate and announced that it intends to renewable energy. maintain the used water network. implement a carbon tax on the Green vehicles emission of greenhouse gases from Tax incentives for renewable energy Under the revised Carbon Emissions- year 2019. The tax will generally be companies based Vehicle Scheme (CEVS), all applied upstream, for example, on Under the Pioneer Incentive and new cars and imported used cars power stations and other large direct Development and Expansion registered from July 1, 2015 with emitters, rather than electricity users. Incentive Schemes, the EDB provides low carbon emissions of less than or The tax rate currently being evaluated tax incentives that provide for equal to 135g of carbon emissions is between SGD 10 to SGD 20 per ton concessionary tax rates of 0, 5, 10, or per kilometer (CO2/km) will qualify of greenhouse gas emissions. 15 percent on qualifying income for for rebates of between SGD 5,000 multinationals, including renewable and SGD 30,000, which will be Renewable energy and fuels energy groups, that set up their The Economic Development Board offset against the vehicle’s Additional regional and global headquarters in Registration Fee (ARF). Cars with high (EDB) has initiated the SolarNova Singapore. The incentive is subject to program, which encourages all carbon emissions equal to or more negotiation with the EDB and meeting than 186g CO2/km will incur government agencies to come substantive economic conditions. together to use solar power, so

Energy efficiency The Energy Efficiency Improvement Assistance Scheme Incentives and schemes that are available for promoting (EASe) encourages companies in the manufacturing and initiatives in improving energy efficiency include: building sectors to carry out detailed studies on their energy consumption and energy assessment to identify The Investment Allowance for Energy Efficiency (IA-EE), potential areas for energy efficiency improvement. valid until March 31, 2021, encourages companies to invest in green or sustainable initiatives to reduce their The Building Retrofit Energy Efficiency Financing energy consumption. scheme (BREEF) was launched to help building owners with the high up-front capital required for energy The Grant for Energy Efficient Technologies (GREET) efficiency retrofits. encourages owners and operators to invest in energy- efficient equipment or technologies. The Finance Programme for Energy Efficiency Projects is a pilot financing scheme by the EDB whereby a third- Accelerated Depreciation Allowance for Energy party financier pays for the cost of energy efficiency Efficient Equipment and Technology (ADAS) encourages projects, and the energy savings are shared between companies to replace old, energy-consuming equipment the various stakeholders. with more energy-efficient ones.

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 71 trademarks or trademarks of KPMG International. NDPPS 655445 a registration surcharge of between of Gross Floor Area (GFA) incentives as R&D, investment in automation, SGD 5,000 and SGD 30,000. As taxis on April 29, 2009. training of employees, acquisition generally clock higher mileage than of rights (IPR), The Green Mark Incentive Scheme cars, the revised CEVS rebate and registration of IPR, and investment for Existing Buildings and Premises surcharge for taxis will be higher in design. The incentive currently (GMIS-EBP) aims to encourage by 50 percent to encourage taxi provides 400 percent tax deduction building owners and tenants to companies to adopt lower carbon on the first SGD 1,200,000 of undertake Energy Improvement Works emission models for their fleets. qualifying expenditure for each year of involving the installation of energy assessment (YA) from 2016 to 2018. From January 1, 2018 the new efficient equipment approved by BCA Vehicular Emissions Scheme (VES) will to achieve substantial improvements For R&D activities, the qualifying include nitrogen oxides, hydrocarbons, in energy-efficiency. It provides a expenditure in excess of particulate matter, and carbon cash incentive amounting to up to SGD 1,200,000 is entitled to monoxide, in addition to CO2. 50 percent of the qualifying costs 150 percent tax deduction. incurred solely for the purposes of Pilot-scale with electric vehicles In addition, the Design for Efficiency energy efficiency improvements are in progress in some areas. Currently, Scheme encourages investors to in existing buildings and premises there are no penalties on the use invest in new facilities in Singapore various stakeholders. of conventional fuels in Singapore. and to integrate energy and resource However, new applications to set up Pollution and ecosystems efficiency improvements into non-natural-gas fossil fuels will not be In 2013, the NEA and manufacturing development plans approved. Authority of Singapore (IRAS) enacted early in the design stage. a year accelerated capital allowance With effect from February 20, 2017, Similarly, the Fast-Track Environmental for approved efficient pollution control the diesel duty on automotive and Water Technologies Incubator equipment or devices. diesel, industrial diesel, and Scheme or Fast-Tech scheme is diesel components in biodiesel is The Land Intensification Allowance designed for entrepreneurs looking to SGD 0.10 per liter. (LIA) grants qualifying firms a first- set up start-ups in the environmental time allowance of 25 percent, then and water technology sector and offers Green buildings 5 percent annually for qualifying qualified start-ups with up to SGD The Building and Construction expenditures on the construction of 300,000 or as much as 85 percent Authority (BCA) Green Mark Scheme buildings for certain sectors. support level of funding assistance was launched in January 2005 as over two years, depending on which an initiative to drive Singapore’s Material resources and waste is lower. construction industry towards more The 3R Fund by the National environmentally friendly buildings. It is Environment Agency (NEA) is a The Green Buildings Innovation intended to promote sustainability co funding scheme to encourage Cluster Energy Efficiency R&D in the building environment and organizations to implement waste (GBIC-R&D) focuses on developing raise environmental awareness minimization and recycling projects. innovative solutions with significant among developers, designers, and Funding is provided for up to 80 percent impact in building energy efficiency builders when they start project of the qualifying costs and subject to a and with high market adoption conceptualization and design, as well cap of SGD 1 million per project or per potential. as during construction. applicant, and depends on the quantity The EDB also provides R&D grants and type of waste reduced or recycled. To encourage the private sector to under the Research Incentive develop buildings that attain higher tier Innovation Scheme for Companies to encourage Green Mark ratings (i.e., Green Mark The Productivity and Innovation Credit multinationals, including renewable Platinum or Green Mark GoldPlus), scheme continues to encourage energy groups, to set up R&D centers BCA and the Urban Redevelopment Singapore companies to invest in in Singapore. Authority (URA) have introduced a set innovative-related activities, such

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 © 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG name and logo The KPMG Green Tax Index 73 are registered trademarks or trademarks of KPMG International. NDPPS 655445 South Africa

Economic indicators

Indicator Rank* Actual GDP per capita 33 USD 5,261

CPI yr/yr 2 6.7% Real GDP growth 34 0.3%

Working age pop (percent of total) 24 65.7%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 32*/81** 70.52 EPS 22 0.78 Environmental tax revenue (percent of total tax revenue) 5 8.22% Renewable energy consumption 16 16.93% CO2 emissions (10yr percent change) 23 16.5% CO2 emissions per capita (metric tons) 12*/30** 8.9 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies 18 9.71% (percent domestic technologies) Environmental R&D budget (percent total gov. R&D) N/A** N/A** Development of environment-related technologies 23 0.13% (percent inventions worldwide) * = Rank within sample of 37 countries ** = Data is not available

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change Energy efficiency to fund the government’s general In November 2015, a draft Carbon Tax Industrial tax incentives are available expenditure programs. Bill was published, which continues primarily for manufacturing-related The South African Department of Trade to be proposed, although an update is projects with a minimum 10 percent and Industry (DTI) launched in 2013, anticipated and requires approval by energy demand reduction. Savings but has not yet finalized, an electric Parliament and then by the presidency must be sustained for a period of vehicle (EV) industry road map to before it is enacted into law. four years thereafter and only projects incentivize (in part) local manufacture of certain sizes qualify. Measurement The South African Department of of EVs. and verification (M&V) of energy Environmental Affairs is in the process efficiency savings are required to An for CO2 emissions of implementing a company-level verify that savings are sustained over above a certain threshold has been and sector-level Carbon Budget (cap) the period. Projects that have already charged on all new passenger cars and program to be applied to a short-list of received incentives or grants under light commercial vehicles since 2011. entities emitting more than 100,000 other types of schemes are excluded. tons of CO2 annually. The Carbon Green buildings There is an additional allowance (in Budgets program is proposed to be There continue to be no direct addition to any other tax allowance implemented in two phases: an initial financial incentives/taxes related to available) on assets (new and unused), test phase from 2016 to 2020 without building or occupying green buildings. used in a project that qualifies as penalties for exceeding the budget, In 2011, national building regulations an Project (IPP) as and a second phase from 2021 to introduced requirements for energy defined. The allowance is only available 2025, which may require adjustment usage in new buildings and new for assets used in the manufacturing of budgets, extension to a larger extensions focused principally on sector, and the project must be pool of emitters, and implementation energy-efficient design and the approved by the Minister of Trade and of compliance requirements and of . Industry as an IPP before the project penalties. commences. Requirements for Energy Performance Renewable energy and fuels Certificates (EPC) for rented properties The Energy Efficiency Savings Tax A tax allowance relating to the and publicly accessible buildings in the Allowance gives a deduction for generation of renewable energy is public and commercial sectors, as well energy efficiency savings by the available, providing a deduction of as a proposal to announce a trajectory taxpayer with regard to the year of 50 percent of the cost in the first year, for the successive tightening of assessment (95C for each kilowatt 30 percent in the second year, and energy performance components hour energy and energy equivalent 20 percent in the third year. of residential buildings and related saved). In addition, the Certified standards, were proposed (but not yet The Renewable Energy Independent Emission Reduction (CER) Allowance adopted) in December 2016. Power Producer Program (REIPPP) provides an income tax exemption requests bids from independent on any amount accrued in respect Water power producers to provide electricity, of the disposal of any certified Allowances for the cost incurred including electricity from renewable emission reduction credit derived in in acquiring a new and unused energy, to the national grid. Successful the furtherance of a qualifying clean environmental treatment and recycling bids commit to local content development mechanism. The credit asset (40 percent of cost/year one; objectives, small to medium-size has been extended to December 31, 20 percent for the subsequent enterprise development objectives, 2020 (in line with the adoption of the three years) or environmental waste socio economic development second commitment period of the disposal asset are available (5 percent objectives, and construction and Kyoto Protocol). per annum). operational employment objectives. Green vehicles Levies are charged on electric filament A fuel levy currently exists on lights (i.e., non-energy-saving light petrol, diesel, biodiesel, unmarked bulbs) if used in South Africa. The levy aliphatic hydrocarbon solvents, and is applied to the manufacturer of the unmarked illuminating kerosene. This products and is currently charged at is not specifically an environmental ZAR/lamp. levy on fossil fuels, but a revenue collection mechanism intended

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 75 trademarks or trademarks of KPMG International. NDPPS 655445 An environmental levy may be Material resources and waste There are government-run ecosystem introduced on water to recoup A plastic bags levy is imposed on preservation and rehabilitation costs for the treatment of acid mine certain types of plastic carriers and flat programs (focused on alien vegetation drainage (AMD) water basin issues bags in the form of an environmental eradication), but no widely applicable in the Witwatersrand area of South levy on these bags for payment by incentive mechanism. Africa. However, this has caused manufacturing facilities. There are no Environmental rehabilitation obligations public criticism and has not been direct financial incentives for efficient for mining operations have been in finalized. use of material resources. effect since 2013, though aspects of In general, water use and discharge There are no direct financial penalties the regulations are currently being costs are assessed according to tariff or incentives for waste. Waste contested by mining companies. structures by water supply and utility management is highly regulated, and a Innovation entities. national waste management strategy The 150 percent deduction of capital exists with the aim of driving the “waste Depending on water uses, the entity expenditures (applicable to all hierarchy” (avoid, reduce, reuse, recycle, may be subject to registration of use industries) incurred in eligible R&D treat, and dispose), including sector or licensing, some of which carry activities continues. The following plans (taking the form of Extended licensing costs. may also qualify for this incentive: Producer Responsibility Plans). Waste green technology, carbon capture A revision of the water pricing management costs are market related and storage, energy efficiency, water- strategy and a revision to the norms and licensing fees may apply. efficient technologies, renewable and standards for setting water Pollution and ecosystems energy and fuels, green vehicles, services tariffs is under consideration Environmental impact (including land material resources, waste recycling, and stakeholder participation use) is highly legislated and regulated. green buildings, and green innovation. and comment has been invited. Noncompliance is subject to fines The R&D tax incentive is an effective The revised strategy considers various according to the environmental legal additional 50 percent “super” water charges and differentiates types framework, rather than any specific tax deduction on eligible R&D of water users. taxes or tax penalties. expenditures incurred in South Africa.

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 South Korea

Economic indicators

Indicator Rank* Actual GDP per capita 18 USD 27,539

CPI yr/yr 21 1.3% Real GDP growth 11 2.8%

Working age pop (percent of total) 3 72.9%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 31*/80** 70.61 EPS 13 2.63 Environmental tax revenue (percent of total tax revenue) 2 10.34% Renewable energy consumption 34 1.60% CO2 Emissions (10yr percent change) 26 27.1% CO2 Emissions per capita (metric tons) 6*/20** 11. 8 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies (percent 19 9.59% domestic technologies) Environmental R&D budget (percent total gov. R&D) 12 2.4% Development of environment-related technologies (percent 4 9.32% inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 77 trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change Municipal governments may support For example, the following incentives South Korea has traded carbon since the expense required by anyone who are available: January 2015. needs to install rainwater utilization 1. A general research and personnel facility, gray water, and sewage/ Renewable energy and fuels development tax credit (40 percent wastewater treatment reuse system, The government has implemented for large companies and 50 percent and local governments may also Feed-in Tariffs for New and Renewable to small and medium-sized entities reduce the tap water fees or sewage Energy (2002–2030) that compensate (SMEs)) use fees for owners of similar the difference between the base price facilities. 2. A deduction for research test of electricity notified by the Ministry of facilities, vocational facilities, and Industry, Trade and Energy and traded Material resources and waste new technology commercialization power prices in order to encourage South Korean companies that do investments (3 percent for investment in the renewable not meet recycling responsibilities large companies, 5 percent for energy sector. may pay a fee under the Extended medium-sized firms, and 10 Producer Responsibility Policy. Green vehicles percent for SMEs) A subsidy from the central South Korea is planning to implement 3. A 7 percent deduction (from government for a purchase of an several measures regarding the income tax) for acquired electric vehicle is currently available. resource circulation of electrical and patent rights Municipal governments may also electronic equipment and vehicles provide such subsidies. in 2018, including a policy to help 4. A 25 percent reduction on income companies that produce a large amount tax or corporation tax on profits Water of waste regularly to set plans for generated when SMEs rent patent A tax credit may be available for resource circulation and monitor and rights wastewater reuse and recycling. manage the process. Incentives will be 5. A tax reduction (100 percent for provided to companies that succeed. the first three years and then Also proposed for 2018 is a waste During the initial period 50 percent for two years) on disposal fee policy that will charge (2015–2017), the government profits generated by any high-tech anyone who adds waste to incineration distributed emission rights free enterprise or research institute in or landfill. Details of the incentives are of charge. During the second the research development zone. not open to the public yet. period (2018–2020), 3 percent of total emission rights will be Innovation distributed through the national Tax deductions are available for R&D auction system with prices of green technology in South Korea. charged for the purchase.

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Spain

Economic indicators

Indicator Rank* Actual GDP per capita 19 USD 26,609

CPI yr/yr 18 1.6% Real GDP growth 9 3.2%

Working age pop (percent of total) 19 66.3%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 4*/6** 88.91 EPS 17 2.22 Environmental tax revenue (percent of total tax revenue) 16 5.59% Renewable energy consumption 17 15.75% CO2 Emissions (10yr percent change) 5 -26.2% CO2 Emissions per capita (metric tons) 23*/68** 5.1 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies 3 13.28% (percent domestic technologies) Environmental R&D budget (percent total gov. R&D) 8 3.5% Development of environment-related technologies 14 0.72% (percent inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 79 trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change Green buildings Food Spain, a member of the EU, Green building incentives are regulated There are no national specific tax/ participates in the EU Emissions by the Spanish government and also credits related to food waste. However, Trading Scheme, which is the regionally. Grants and loans are available some municipalities have adopted cornerstone policy to combat climate for new building and building restoration taxes regarding domestic waste. change and key tool for reducing to energy efficiency measures. New Pollution and ecosystems industrial greenhouse gas emissions building codes in Spain are mandating The Spanish government and the cost-effectively. The EU also adopted solar hot water for new and remodeled local governments impose tax and a carbon capture and storage directive private residences, and tax penalties related to pollution in all that Spain transposed into its to offset some power requirements environmental sectors. Where certain legal system. for all new and remodeled commercial polluting discharges and emissions buildings. The new laws also reflect Renewable energy and fuels are permitted, there is a cost for increased awareness of the importance Spain’s national renewable energy companies. In addition, there are of better building insulation and the use action plan 2011–2020 contains deductible incentives available through of daylighting. measures to promote the use of nongovernmental organizations energy from renewable resources, Water to collaborate in the restoration of and specifically regulates the new National legislation requires that taxes habitats and polluted areas. remuneration system for facilities are paid related to use and quality of Innovation producing electricity from renewable water discharge. The level of taxes Spanish legislation sets out a number energy sources, cogeneration, and is set by municipal authorities and of incentives for R&D activities, waste. Power plants producing is mainly related to scarcity and including technological innovation (TI), electricity from renewable energy necessity of water management. such as environmental and efficiency sources, cogeneration, and waste may The consumption of water is measures. The R&D tax incentives also receive a specific remuneration, in taxed according to the volume of applicable to Spanish companies or addition to the electricity market price. consumption and also the volume permanent establishments include and quality of water discharge. At the Green vehicles (i) Spanish R&D and TI tax credits regional or subnational level, water is Taxes for vehicles using mechanical (RDTC), (ii) Reduction of social security taxed to encourage its efficient use traction are imposed by and paid to contribution for R&D dedicated staff, and to stimulate the reduction of the the local government. The tax rate (iii) Spanish “patent box” regime, highest consumption. Tax revenue is based on several factors including and (iv) free depreciation for R&D is used to finance the entire water horsepower (cars), number of seats activities. These incentives are also cycle from catchment to distribution, (buses), load (trucks), and cubic open to R&D projects that focus including water recycling. Also, at the centimeters (motorcycles). In addition, on environmental technologies and regional or subnational level, various local governments can approve benefits (for development of new regulations incentivize the recycling of reductions related to environment, products or new processes, but not water. For example, in some regions, such as vehicles with electric engines, for pure investments). all golf courses are irrigated with natural, or petrol gas. A one-time recycled water. At the regional/local The corporate income tax sets forth registration tax is paid based on level, incentives are used to reduce generally free depreciation for assets engine size. The rate depends on consumption and the amount of tax. used in R&D (except real estate). CO2 emissions. This incentive is applied in the tax Material resources and waste The Spanish government, in common base (the investment made in the tax There are no taxes associated with with many other countries, offers period is considered as an expense waste production. However, there preferential registration tax rates for tax purposes and the accounting are obligations with regard to reuse/ on lower emission vehicles (vehicle depreciation of the following year recycling that are connected to the registration tax). Local governments is recaptured for tax purposes, as a price of landfill use. Packaging is can also set lower rates regarding the positive adjustment). regulated according to the European mechanical traction tax depending packaging waste system, though there on the fuel consumed by the vehicles are no specific incentives or penalties and the impact of the fuel combustion related to efficiency. on the environment.

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Sweden

Economic indicators

Indicator Rank* Actual GDP per capita 7 USD 51,165

CPI yr/yr 15 1.7% Real GDP growth 8 3.3%

Working age pop (percent of total) 35 62.8%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 2*/3** 90.43 EPS 8 3.10 Environmental tax revenue (percent of total tax revenue) 18 5.18% Renewable energy consumption 1 49.91% CO2 Emissions (10yr percent change) 9 -19.1% CO2 Emissions per capita (metric tons) 27*/73** 4.6 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies 10 11.37% (percent domestic technologies) Environmental R&D budget (percent total gov. R&D) 19 1.5% Development of environment-related technologies 9 1.22% (percent inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 81 trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change using the electricity solely for their premium (40,000 SEK for an electric As part of the EU, Sweden is covered own operations) are exempt from vehicle and 20,000 SEK for a plug-in by the EU Emission Trading Scheme paying energy taxes on the produced hybrid). The premium is administered (EU-ETS). The country also taxes electricity. This exemption also by the Transport Agency, and is paid fossil fuels based on carbon content. applies to smaller producers (<50 kW at purchase. Fuels subject to this energy tax are generation). Green vehicles are incentivized with gasoline, diesel oil, heating oil, LPG, Though not enforced by a revenue a reduced taxable value of fringe and natural gas. agency, Sweden has implemented benefits as they are generally more Renewable energy and fuels an electricity certificate system that expensive than other cars. As described above, many fuels used provides electricity producers with Many municipalities also incentivize for transportation and heating are one certificate per MWh of electricity the purchase of green vehicles. For associated with an energy tax. produced from renewable sources or example, green vehicles may be peat. The certificates are traded on However, some renewable fuels are exempt from parking fees. Note, an open market with the price being completely exempt, or have a reduced however, that the definition of a green determined by supply and demand. tax rate. Fuels used for a number vehicle will vary among municipalities. The purpose of this system is to of industrial purposes, such as provide an incentive for electricity Water production of electricity or operation producers to produce renewable Sweden does not have any of mining vehicles, have a reduced tax electricity, as they will receive national tax incentives specific to rate. There is also an energy tax levied additional income from selling the water. However, there are various on the use of electricity, which differs certificates. This system is enforced government agencies and local slightly between regions in Sweden by the Swedish Energy Agency. governments that provide grants and for what purpose the electricity related to water efficiency. is used. Green vehicles Sweden imposes both tax penalties Material resources and waste In order to encourage production and incentives with respect to green The extraction of gravel from natural and use of renewable fuels, Sweden vehicles. As an example of a penalty, sites in Sweden is taxed at a rate provides a number of tax incentives. the country imposes a vehicle tax, of 15 SEK/ton. In addition, waste These include an investment subsidy calculated based partially on the sent to a landfill is taxed at 500 SEK/ for PV panels of up to 30 percent of vehicle’s CO2 emissions. If the car ton. Other agencies, such as the the investment cost for companies, vehicle is a 2006 model or later, Geological Survey of Sweden, impose and 20 percent for other parties. the tax is calculated based on CO2 fees related to the extraction of Small producers of electricity from emissions. Older car models are minerals in mines. wind or solar (<30,000 kWh/year) taxed based on vehicle weight. Light Pollution and ecosystems meeting certain criteria are entitled trucks, light buses, and RVs generally Sweden penalizes numerous polluting to a tax deduction for electricity sold follow the same rule, though vehicle activities. For example, under its back to the grid. The highest amount models from 2011 or later are taxed sulfur tax, solid and gaseous fuels deductible is 30,000 * 0.6 = 18,000 based on CO2 emissions, while older containing sulfur are taxed with SEK/year. vehicles are taxed based on weight. 30 SEK/kg sulfur in the fuel. Liquid Withdrawal of electricity from the grid Vehicles with emissions that fall fuels are taxed with 27 SEK/m3 must exceed the amount sold to the below certain thresholds (meeting per tenth weight percent of sulfur grid (if a producer buys 20,000 kWh emission standards Euro 5/6 or being content. Liquid and gaseous fuels and sells 25,000 kWh, only 20,000 plug-in hybrids or electric hybrids) are with a sulfur content <0.05 weight kWh is eligible for deduction), and the exempt from paying vehicle tax for percent are exempt from this tax. In electrical fuse for the grid connection five years from the date the vehicle addition, Sweden imposes a fee on can be 100 ampere at most. is taken into service. In addition, cars NOx emissions for power generation fulfilling the emission requirements of facilities using incinerators with an In addition, noncommercial producers Euro 5 or Euro 6 and CO2 emissions annual power production of 25 GWh of electricity from wind (i.e., those below 50 g/km are eligible for a or more.

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 On April 1, 2017, a new tax on Innovation The research performed must electronics was implemented in Sweden incentives innovation via be systematic and qualified and Sweden. The tax targets potential payroll tax deductions. A business is performed for commercial purposes. pollutants that are commonly found in entitled to a deduction for employees Though not specifically related to electronics, such as bromine, , that work on R&D for at least R&D, a tax ease on foreign specialists or phosphorus. 75 percent of their working time, and experts working in Sweden is and at least 15 hours per month. also applicable.

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 83 trademarks or trademarks of KPMG International. NDPPS 655445 Switzerland

Economic indicators

Indicator Rank* Actual GDP per capita 1 USD 79,242

CPI yr/yr 34 0.0% Real GDP growth 29 1.3%

Working age pop (percent of total) 15 67.2%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 11*/16** 86.93 EPS 5 3.29 Environmental tax revenue (percent of total tax revenue) 12 6.57% Renewable energy consumption 13 22.68% CO2 Emissions (10yr percent change) 20 0.4% CO2 Emissions per capita (metric tons) 25*/70** 5.0 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies 32 7.39% (percent domestic technologies) Environmental R&D budget (percent total gov. R&D) 24 0.2% Development of environment-related technologies 13 0.83% (percent inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change difference between the production Water Switzerland has had a carbon tax (CO2 cost and the market price, and Water as a source of energy levy) in place since 2008 that covers guarantees producers of electricity () is taxed depending fossil combustible fuels (such as from renewable sources a price that on the power of the station. heating oil and natural gas). corresponds to their production costs. Only hydropower stations with a gross output bigger than 1000 kW are The Swiss emissions trading scheme Switzerland’s petroleum tax is an affected by the tax. is built according to the “cap-and- excise tax encompassing crude oil, trade” principle, and the quantity other mineral oils, natural gas, their Pollution and ecosystems of emission allowances available is processed products, and engine fuels, Since 1997, VOCs (e.g., benzene, limited. The cap has been reduced and includes a surtax on engine fuels. butanes, ethers, oil) have been taxed each year by 1.74 percent of the initial The petroleum tax varies significantly in Switzerland. The tax is levied 2010 quantity. Large, greenhouse depending on the product and the use on importers, manufacturers, and gas intensive companies are required of the product (engine fuel, heating wholesalers and on Swiss producers to participate in emissions trading, fuel, technical purposes). of VOCs. There is an exemption for while medium-sized companies may VOCs that are exported, products Green vehicles voluntarily participate in the scheme. whose VOC content does not exceed Since July 2012, CO2 emission 3 percent, and for VOCs in products Though Switzerland is not part of the regulations for new passenger cars in not included in the positive list. European Union (EU), which operates Switzerland are similar to those of the its own emissions trading schemes, EU: emissions of new car fleets may Innovation it is in the process of trying to link not exceed a maximum of 130 grams Switzerland has incentives to develop both systems and create a joint CO2 of CO2 per kilometer on average by equipment and processes that reduce market. (Technical negotiations have the end of 2015. Swiss car importers the environmental pollution/burden concluded, and the treaty must be are subject to this requirement and of the Swiss society and improve signed and ratified by both sides to pay fines if they do not meet their the general conditions for applying be effective.) individual CO2 targets. ecological innovations (in particular, an increase of the competitiveness Renewable energy and fuels Personal cars are taxed, depending of the Swiss Environmental sector The main goals of Switzerland’s on the power of engines and weight and improve the eco-efficiency of energy strategy are to (i) phase out of the car. A distance-related heavy the Swiss economy). Beneficiaries nuclear energy, (ii) reduce electricity vehicle fee (HVF) has been levied in can be universities, companies, consumption, (iii) increase renewables, Switzerland since 2001, replacing the NGOs (nonprofits), associations, or and (iv) reduce GHG emissions. previous flat-rate heavy vehicle fee. communities. Requirements are that The switch to a distance-related fee Switzerland is considering a move 50 percent of the project costs must system was aimed at limiting the from a subvention-based system to a be covered by the beneficiary and increase in heavy vehicles on the road, more levy-based incentive system and that some of the incentives need to encouraging the shipment of freight is also planning to introduce a levy on be paid back in case of commercial by rail (road-to-rail policy), and relieving electricity and transportation fuels in success. the strain on the environment. the 2020s. Green buildings Switzerland has a feed-in tariff, Switzerland’s “Building Program” developed by the federal government incentivizes the renovation of houses for the purpose of promoting with a goal of increasing insulation electricity production from renewable around windows, walls, roofs, energy sources. It covers the and floors.

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 85 trademarks or trademarks of KPMG International. NDPPS 655445 Taiwan

Economic indicators

Indicator Rank* Actual GDP per capita 20 USD 22,453

CPI yr/yr 17 1.7% Real GDP growth 25 1.4%

Working age pop (percent of total) - -

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 28*/60** 74.88 EPS - - Environmental tax revenue (percent of total tax revenue) - - Renewable energy consumption - - CO2 Emissions (10yr percent change) - - CO2 Emissions per capita (metric tons) - - * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies N/A** N/A** (percent domestic technologies) Environmental R&D budget (percent total gov. R&D) N/A** N/A** Development of environment-related technologies N/A** N/A** (percent inventions worldwide) * = Rank within sample of 37 countries ** = Data is not available

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change Taiwan enacted a “Greenhouse Renewable energy and fuels Gas Reduction and Management Taiwan has launched several programs/incentives to encourage the purchase Act” in 2015, which includes carbon of energy-efficient equipment, granting subsidies in both the public and disclosure/verification stages and a private sector for using or purchasing energy-efficient equipment, such as cap and trade scheme. The cap and washing machines and air conditioners. In addition, there are many other trade scheme is still under planning subsidies available, including ones for the implementation of waste heat while the compulsory carbon recovery facility, loans for purchase of energy-saving equipment, and for disclosure and regular verification municipalities to replace mercury lights with LED. There is priority bidding have been initiated. Taiwan launched for energy-efficient equipment and energy-saving products in government a greenhouse gas offset project as procurement. Subsidies are also available to develop renewable energy a -run measurement for the cap facilities, power generated from renewable power facilities, and renewable and trade program. In addition to the energies including solar, wind, marsh gas, and geothermal. countrywide cap and trade scheme, Taichung City has implemented Water equipment are exempt from a regional cap and trade program Water tax in Taiwan is collected in customs duties. conservation and hot springs areas. requiring certain public or private sites/ The reuse, recycling, or treatment of A , which requires a areas to set the reduction targets wastewater is also promoted under fee, is needed for general water as self GHG-emission management. countrywide award activities. Taiwan imposes penalties for emission consumption. Material resources and waste sources that exceed the regulated The taking or obstruction of the Material resources usage, such as target or provide incorrect emission use, or discharge of water without mining rights and fishery access, and inventory information. permission, is subject to fines and consumption of resources such as possible imprisonment. Interference Green vehicles sand and gravel, are subject to fees. A with water conservation or circulation, Automobile users are charged fees packaging tax is collected as recycling, or pollution of water in a water based on engine displacement clearance, and disposal fees. Only quality and quantity protection calculation and air pollution control. specific packaging that produces area, also subjects the violator to Vehicles failing to comply with the general waste and possesses certain fines/imprisonment. standards of permissible energy characteristics causing serious consumption are not imported or sold The government sets the water pollution to the environment are in the domestic market. In-use motor conservation label standard for water- subject to the fees. vehicles undergo regular air pollutant savings products to identify water use Commercial waste is classified as emissions testing and owners of efficiency levels and encourages the general and industrial and is subject to motor vehicles failing to comply with public and private sectors to purchase a disposal fee. There is an additional the emissions standards are fined. water-saving equipment through fee for industrial waste. Violation of Owners of motor vehicles that have several subsidies. In the public sector, waste disposal regulations subjects not undergone regular testing or fail water-saving equipment is on the the violator to imprisonment or fine. to comply may be prohibited from priority list of procurement. In the Incentives for waste recycling and renewing their vehicle license. private sector, there are subsidies reuse include prioritizing recycle and incentives for applying water To encourage industry to develop products on the procurement list conservation technology and for water green vehicles, the Taiwanese in the public sector, a subsidy for recycling facilities. government launched a pilot project recycling waste and waste recycling for intelligent electric vehicles and Low interest loans are available for organizations, and a subsidy for waste subsidizes the electric scooter the purchase of pollution control recycling related research. industry and the establishment of equipment in the private sector. power stations. of pollution protection

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 87 trademarks or trademarks of KPMG International. NDPPS 655445 Food Low interest loans are also available to and sanitation laws in the past three Taiwanese government has initiated incentivize investments that promote years, the company may select one projects and incentives related to food low carbon actions and encourage the of several incentives for crediting the waste efficiency. sustainable development of industries. funds invested by it in R&D against the profit-seeking enterprise income Pollution and ecosystems Innovation tax payable by it. Once the company In Taiwan, anyone who violates air, Low interest financing is available to selects an incentive, it cannot change water, and soil regulations is subject subsidize green technologies, energy- its selection, and the creditable amount to fines and/or penalties. There are saving equipment, and green . shall not exceed 30 percent of the subsidies and incentives related to the If a company has not seriously violated profit-seeking enterprise income tax conservation of land and wildlife. any environmental protection, labor payable by it in the then current year. safety, and health or food safety

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Thailand

Economic indicators

Indicator Rank* Actual GDP per capita 31 USD 5,899

CPI yr/yr 24 1.1% Real GDP growth 9 3.2%

Working age pop (percent of total) 5 71.8%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 33*/91** 69.54 EPS - - Environmental tax revenue (percent of total tax revenue) - - Renewable energy consumption 12 23.02% CO2 Emissions (10yr percent change) 26 35.0% CO2 Emissions per capita (metric tons) 28*/74** 4.5 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies 30 8.00% (percent domestic technologies) Environmental R&D budget (percent total gov. R&D) - - Development of environment-related technologies 31 0.03% (percent inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 89 trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change buildings having an aggregate area These incentives apply to activities, There are no taxes on carbon of 2,000 square meters or more, such as the manufacture of biological emissions; however, as of January including , schools, offices, fertilizers; organic fertilizers; plant or 2016, an excise tax is imposed on condominiums, convention centers, animal breeding; deep sea fishery; cars based on their carbon emission theaters, hotels, entertainment places, grading, packaging, and storage of rate. Thailand established the Thailand and department stores. In addition, plants, vegetables, fruits, or flowers; Greenhouse Gas Management certain types of buildings have manufacture of oil or fat from plants Organization (TGO) in 2007 as an additional obligations where failure to or animals; and manufacture or implementing agency on greenhouse comply can lead to special electricity preservation of food, beverages, food gas (GHG) emission reductions and fees and criminal fines. additives, or ingredients using modern is currently considering whether technology. Water the operation of carbon trading There are no national penalties or Pollution and ecosystems is appropriate. taxes imposed on the use of water; Thailand has no taxes or tax penalties Renewable energy and fuels however, the Environment Act relating to air, water, and ground The Thai Board of Investment (BOI) imposes a duty on owners of certain pollution. However, the Environment grants tax and nontax incentives sources of pollution to install facilities Act prescribes emission standards to existing projects that invest in to deal with wastewater treatment for the control of wastewater upgrading machinery to reduce energy or waste disposal. In addition, local discharge, polluted air emissions, consumption. Tax benefits include a authorities can designate localities as and the discharge of other wastes. three-year corporate income tax (CIT) pollution control areas if affected by Violators may be subject to civil and exemption on the revenue from an pollution problems that may cause criminal liabilities. existing project (capped at 50 percent public health hazards. In those cases, Innovation of the investment) and exemption of authorities can take measures to Companies can apply for general import duty on machinery. control, reduce, and eliminate pollution incentives from two government and also set special standards for Green vehicles authorities in relation to R&D emissions in the designated locality. The BOI also offers several tax and activities. The Revenue Department nontax incentives for certain activities Material resources and waste offers tax incentives/deductions for relating to both renewable energy and Thailand imposes a petroleum income expenses paid to a governmental green vehicles. tax on petroleum concessionaire agency or private operator to conduct companies that generate income from R&D (effective from January 1, 2015 The Enhancement and Conservation petroleum operations at the rate of to December 31, 2019). The BOI of National Environment Quality Act 50 percent of their annual net profit. offers incentives for various R&D (Environment Act) limits air pollution activities, including basic research, emissions from cars and motorcycles There are no taxes or penalties on applied research or pilot development, (applying to both personal and commercial waste; however, local biotechnology, health, agriculture, commercial vehicles) and subjects authorities charge food, and the environment. Certain violators to fines and/or imprisonment. fees. The BOI recently announced the activities, such as the manufacture granting of incentives to businesses Green buildings or production of renewable energy involved in or Thailand does not offer incentives and/or fuels or the recycling/reusing waste disposal. for green buildings, but the Energy of unwanted materials, may also Conservation Promotion Act (ECP Act) Food qualify for incentives. The Revenue sets out duties and responsibilities The BOI offers tax and nontax Department R&D incentives cannot (e.g., construction or modification incentives to the agricultural industry be enjoyed together with the R&D criteria) for certain types of where modern technologies are used. incentives provided by the BOI.

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Ukraine

Economic indicators

Indicator Rank* Actual GDP per capita 35 USD 2,194

CPI yr/yr 1 12.4% Real GDP growth 16 2.3%

Working age pop (percent of total) 8 69.8%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 24*/44** 79.69 EPS - - Environmental tax revenue (percent of total tax revenue) - - Renewable energy consumption 33 2.83% CO2 Emissions (10yr percent change) 33 58.3% CO2 Emissions per capita (metric tons) 1*/58** 18.7 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies 31 7.45% (percent domestic technologies) Environmental R&D budget (percent total gov. R&D) - - Development of environment-related technologies 29 0.03% (percent inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 91 trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change Carbon emissions and other National climate policy framework of the environment are taxed as a The Law of Ukraine “On Basics (strategy) of the State Environmental Policy part of ecological tax (eco tax) that is of Ukraine until 2020” (adopted on December 21, 2010): imposed on CO2 and other emissions and pollutions of the environment by ——Optimizing the energy sector of the national economy by increasing the legal entities, production facilities, use of energy sources with low carbon dioxide emissions by 2015 for 10 aggregates, and other real estate percent and by 2020 for 20 percent objects. Local tax authorities administer the eco tax. ——Developing the basic policy framework for adaptation to climate change by 2015, development and phased implementation of a national action Renewable energy and fuels plan to mitigate climate change for the period to 2030 Ukraine exempts the import of energy- efficient equipment, materials and ——Raising of energy efficiency by 25 percent up to 2015 and by 50 percent components, and green vehicles up to 2020 relative to the base year by implementing energy and (as specified by the decisions of resource conservation in energy-consuming sectors the government of Ukraine) (energy equipment) from import VAT ——Increasing the use of renewable and alternative energy sources. and import duty if similar energy equipment is not produced in Ukraine and the energy equipment is used for the taxpayer’s own production the production and reconstruction Water purposes. The sale of fuel is subject to of equipment and machinery for A rent payment is charged, the rate of an excise tax. the purpose of biofuel, if such which varies depending on the river goods are not produced and have basin, region, and the type of business Alternative fuels no analogues in Ukraine, as well as activity. Temporarily, until January 1, 2019, machinery and vehicles, including Material resources and waste the following business operations are self-propelled agricultural machines Import, export, and supply within exempt from VAT: that run on biofuel if such goods Ukraine of waste and of ferrous are not produced in Ukraine. The a. Supply within Ukraine of machinery, and nonferrous metals, as well as government of Ukraine adopts equipment, and technical devices paper and cardboard of the Ukrainian the procedure for the mentioned set out in Article 7 of the Law of code of goods classification (UKT ZED) import of machinery, equipment, Ukraine ”On alternative fuels” 4707 for utilization, is VAT exempt until technical devices, and vehicles. b. Imports under codes of UKT January 1, 2019. ZED set out in Article 7 of the Green vehicles Law of Ukraine ”On alternative Import of green vehicles (electric fuel” of machinery, equipment, cars) is not subject to import duty and technical devices used for and individuals may credit costs for reconstruction of existing and reequipment of their conventional construction of new enterprises for vehicles to green vehicles against their the production of biofuels and for personal income tax.

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 United Arab Emirates

Economic indicators

Indicator Rank* Actual GDP per capita 16 USD 37,678

CPI yr/yr 14 1.8% Real GDP growth 13 2.7%

Working age pop (percent of total) 1 84.9%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 34*/92** 69.35 EPS - - Environmental tax revenue (percent of total tax revenue) - - Renewable energy consumption 36 0.13% CO2 Emissions (10yr percent change) 11 -15.3% CO2 Emissions per capita (metric tons) 18*/6** 7. 1 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies 6 12.67% (percent domestic technologies) Environmental R&D budget (percent total gov. R&D) N/A** N/A** Development of environment-related technologies 31 0.03% (percent inventions worldwide) * = Rank within sample of 37 countries ** = Data is not available

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 93 trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change The United Arab Emirates does not The Intended National Determined Contribution (INDC), submitted by the currently participate in a cap and trade UAE before COP21, emphasized its target to increase its share of clean program, nor does it have a carbon energy from 0.2 percent in 2014 to 24 percent of the total energy mix by tax. However, it recently created an 2021. However, during COP22, the UAE raised this target to 27 percent, Energy & Climate Change Directorate to generate energy from sources like nuclear and , which will 13 (ECC) within the Ministry of Foreign considerably help minimize carbon emissions. Carbon capture and storage Affairs (MoFA) as the best solution (CCS) also has a huge potential impact on carbon emissions reduction, and to build the required capacity for the Intergovernmental Panel on Climate Change says CCS could contribute managing UAE’s climate change and between 10 percent and 55 percent to the cumulative worldwide carbon renewable energy agenda. mitigation effort over the next 90 years. With this in mind, the UAE is developing a major CCS project through a joint venture between Masdar and Renewable energy and fuels Abu Dhabi National Oil Company (ADNOC) under Al Reyadah. The facility will The nationwide “I LED the way” sequester up to 800,000 tons of CO2 annually.14 campaign was launched on May 22, 2016 by the Emirates 3. Empower participants through technologies. The UAE also strongly Authority for Standardisation and several supporting measures and encourages food security research Metrology (ESMA), Dubai Electricity incentives. and development, such as modeling to and Water Authority (Dewa), and assess the impact of climate change Green buildings Abu Dhabi Commercial Bank (ADCB). on the agricultural productivity of the Green Building Regulations were major food exporting countries on The 12-month eco-program will use issued by the Dubai Municipality in which the UAE currently relies, and awareness campaigns, community 2011 and were made immediately incentivizes technology to increase engagement, and green initiatives to mandatory for government bodies and productivity and resilience.16 achieve its objectives, according to a optional for private developers. statement by its organizers. Pollution and ecosystems Water Though incentives are not currently During the Efficient Lighting Overall water tariffs for villas and available, the UAE has developed Campaign, all high-efficiency LED flats have been increasing, with rates and implemented a number of lighting products, as certified differing for expats and nationals, strategies and plans, including carbon by ESMA, will be discounted by to encourage residents (particularly sequestration, that aim to improve 25 percent for a week at select Dubai expats) to reduce water consumption. understanding of wetlands, coastal retailers. Residents will also be offered There are also sharp recent increases carbon systems, and habitats. environmentally friendly disposal in water tariffs for government solutions for their old light bulbs, entities.15 which can contain harmful levels of toxic mercury. Food No incentives or penalties currently Green vehicles exist specific to food. However, the The UAE recently approved a low UAE imports more than 90 percent of emission vehicle strategy to: its food. With continuing population 1. Raise awareness and educate growth and an environment with the target audience through scarce renewable water and campaigns that encourage the use agriculture potential, food imports of more sustainable transportation are expected to more than double by 2030. In an effort to improve 2. Develop and support convenient food security, the UAE has been infrastructure diversifying its sources of food and investing in agriculture projects and

13 See http://gulfnews.com/news/uae/environment/uae-raises-clean-energy-target-to-27-by-2021-1.1917569 14 See http://mofa.gov.ae/EN/TheUAE/Pages/Energy-and-Climate-Change-.aspx, http://www.masdar.ae/en 15 See http://energy/detail/carbon-capture-and-storage-ccs 16 See http://www4.unfccc.int/submissions/INDC/Published%20Documents/United%20Arab%20Emirates/1/UAE%20INDC%20 -%2022%20October.pdf

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Between October 2020 and April 2021, Dubai will renewable sources on site. Other initiatives include host the next World Expo, bringing together more plans to recycle wastewater, reuse materials, and than 180 nations and an international audience of 25 monitor the of the site. million visitors. The theme for the Expo is “Connecting The UAE Vision 2021 defines sustainability areas and Minds, Creating the Future”, recognizing that generating targets for 2021, focusing on improving the quality sustainable solutions to global problems demands of air, preserving water resources, increasing the collaboration across cultures, nations, and regions. contribution of clean energy, and implementing green Opportunity, Mobility, and Sustainability are the growth plans. The UAE aims to be a world leader in three subthemes. Specifically, the Sustainability the for sustainable development and theme will focus on ways to pursue progress without a center for the export and reexport of green products compromising the fundamental needs of future and technologies. Initiatives include programs and generations, examining the role of natural and built policies in the areas of energy, agriculture, investment, habitats in ensuring human well-being and community and , in addition to environmental resilience. Recycled materials will be used in 30 policies and new urban schemes to raise the quality of percent of the construction, and 50 percent of the life in the state. Expo’s operational energy requirements will come from

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 95 trademarks or trademarks of KPMG International. NDPPS 655445 United Kingdom

Economic indicators

Indicator Rank* Actual GDP per capita 12 USD 40,096

CPI yr/yr 23 1.2% Real GDP growth 21 1.8%

Working age pop (percent of total) 30 64.5%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 8*/12** 87.38 EPS 4 3.33 Environmental tax revenue (percent of total tax revenue) 10 7.20% Renewable energy consumption 31 4.35% CO2 Emissions (10yr percent change) 14 -8.7% CO2 Emissions per capita (metric tons) 2*/45** 16.4 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies 12 11.02% (percent domestic technologies) Environmental R&D budget (percent total gov. R&D) 13 2.3% Development of environment-related technologies 6 3.17% (percent inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change Some non-EU countries (, , and ) participate in The United Kingdom currently the EU-ETS while some EU countries (Switzerland) have their own ETS. participates in the EU Emissions Trading Scheme. It is unknown how and if this may change, depending on The CPF was introduced in 2013 at GBP 15.70/tCO2 (USD 25.51/tCO2) its relationship with the EU post-Brexit. and was expected to increase at a linear rate to GBP 30/tCO2 (USD 48.74/ Organizations, businesses, and public tCO2) in 2020, and to GBP 70/tCO2 (USD 113.74/tCO2) in 2030. The rate of bodies are required to participate in increase has slowed and is now GBP 18/tCO2. the CRC Energy Efficiency Scheme (CRC Scheme) if they use a certain gas (CNG) used as fuel in road There is also a reduced rate of VAT amount of electricity per year. This vehicles, as these are subject to road on supplies of services for installing scheme requires the organization fuel duties. There are additional tax energy-saving materials, and supplies to buy carbon allowances in respect rules for oil and gas businesses, but of energy-saving materials by a person of the energy the organization uses not on the products themselves. who installs those materials in a (electricity and natural gas). Penalties Other mineral oils, such as gas oil, residential building or a building to be for noncompliance are large, including fuel oil, and kerosene, are not subject used for a charitable purpose. a penalty for failure to register/account to the levy because they are within The generation of heat from for the allowances. Additional the scope of excise duties. There are renewable sources, such as some penalties are imposed for each day of certain exclusions, exemptions, and heat pumps, solar thermal, and some noncompliance following the relevant reduced rates on certain supplies biomass boilers, and the injection of deadline up to a maximum amount. (e.g., all supplies for domestic use biogas into the supply network from An additional penalty per ton of CO2 and nonbusiness use by charities , , emitted may also be payable. The CRC are excluded from the levy). Climate or , is encouraged by the Scheme is due to be phased out in Change Agreements (CCAs) allow Renewable Heat Incentive (RHI). RHI 2019, with a corresponding increase in eligible energy-intensive businesses to is paid on the heat generated. The the (CCL). receive the discount from the CCL in tariff rates are changed quarterly. In 2011, a GBP 250 million (USD return for meeting energy efficiency or 406 million) Energy Intensive Industries carbon-saving targets. Some supplies Green vehicles Package (EIIP) was introduced to to energy-intensive users are exempt Beginning in March 2011, the U.K. duty compensate energy-intensive industries from the CCL. Electricity generated rate for road fuels (unleaded petrol, for additional costs associated with from renewable sources was exempt diesel, biodiesel, and bioethanol) is the Floor (CPF) and EU until August 2015. This electricity is GBP 0.5795 per liter. Cars also pay Emissions Trading Scheme. now subject to standard rates of CCL. the vehicle excise duty (based on CO2 per km). There is increasing use of Renewable energy and fuels The CCL is an environmental tax road pricing (aka congestion charge) The United Kingdom offers capital levied on taxable commodities from which low-emissions vehicles allowances of 18 percent for capital supplied to businesses and the public are often exempt. Company car expenditures on plant and machinery sector. The taxable commodities taxation also penalizes high-emitting (reduced to 8 percent if the asset’s are electricity, gas, solid fuels, and cars and incentives low-emission cars. expected economic useful life liquefied petroleum gas (LPG). The United Kingdom also imposes exceeds 25 years), an enhanced The levy is designed to encourage an annual car tax calculated on CO2 capital allowance (a 100 percent first energy efficiency to help the United emissions and fuel type. Kingdom meet targets for cutting year allowance for specified energy- greenhouse gases, including CO2 saving plant and machinery), and a A 100 percent first-year capital emissions. The levy rates are 19 percent tax cash credit is available allowance is offered for vehicles based on the energy content of for loss-making companies up to GBP with low emissions and covers each commodity. 250,000 or the company’s PAYE and expenditures on a new , or NICs liabilities, whichever is less. new, unused car with CO2 emissions The levy does not apply to diesel, of not more than 75gm per km driven. petrol, LPG, and compressed natural The CO2 threshold changes each year.

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 97 trademarks or trademarks of KPMG International. NDPPS 655445 Green buildings This system demands that PRNs land acquired from a third party in a The enhanced capital allowance are accounted for by all obligated contaminated state. scheme allows a deduction of companies in the supply chain, The community fund 100 percent of the cost of investment including the manufacturer of the enables landfill site operators to claim in qualifying energy-saving technology, raw material, the converter of the a credit in respect of contributions though there are no incentives specific raw material to packaging, the filler made to fund local community and to the building itself. of the packaging, and the seller of environmental projects. The amount the packaged supplies to the end Water of credit claimable is capped at 90 user. PRNs are purchased directly, There is a 100 percent first-year percent of the contribution and must or through an intermediary, from capital allowance for water-efficient be no more than 4.2 percent of the companies accredited to reprocess technologies and some water reuse operator’s annual landfill tax. the packaging. A certain percentage technologies. The allowances are of packaging is accounted for by each Innovation available for expenditures on plant stage in the supply chain. The United Kingdom offers R&D tax and machinery that are designed to relief in the form of an enhanced improve H2o quality and/or reduce Companies supplying waste electrical tax deduction of 130 percent (230 water use. For example, water- and electronic equipment are percent for small and medium-sized efficient showers and taps, and obligated to demonstrate that material entities from April 1, 2015) for revenue vehicle wash water reclaim units, are is reused and recycled and that waste expenditures on qualifying projects included as qualifying technologies batteries have been disposed of seeking to achieve an advance or products as specified by the correctly by buying notes. through the resolution of scientific Department of Environment, Food and These regulations are led by European or technological uncertainty. The U.K. Rural Affairs. Directives and may also change government is currently consulting on following Brexit. Material resources and waste the detail of an “above the line” R&D The aggregates levy, introduced on A Landfill Tax (LFT) was introduced in credit for large companies that do not April 1, 2002, is a U.K.-wide tax on 1996 and is levied on approximately have a current corporation tax liability, the commercial exploitation of virgin 160 landfill site operators registered providing for a 100 percent allowance aggregate materials (e.g., rock, sand, in the United Kingdom covering on capital expenditure on R&D in and gravel). The levy uses the price c.700 sites. The LFT was introduced as the year of the expenditure. R&D mechanism to encourage efficient a way of adhering to the government’s deductions are not limited to green use of virgin aggregate materials and environmental objectives by technologies. increased use of untaxed alternative diverting waste away from , In addition, the Patent Box enables construction materials (e.g., recycled covering external costs of landfills, companies to apply a lower rate of construction and demolition waste). and encouraging sustainable waste corporation tax to profits earned after The levy is charged on a per ton basis technologies such as recycling. The tax April 1, 2013 for patented inventions and is a one-stage, nondeductible is charged per ton of most types of and certain other innovations, also not tax. Exemptions from the levy include waste deposited into U.K. landfills. limited to green technologies. slate, clay, mining waste, and There are certain exemptions from “dimension” stone. Also there are the tax, such as dredging, mining, and certain reliefs available for exports and quarrying wastes. taxable materials that are used for Pollution and ecosystems a nonaggregate purpose (e.g., sand Incentives include land remediation used for glass manufacture). relief from corporate tax only, Packaging Waste Regulations oblige providing a deduction of 100 percent, larger producers of packaging to plus an additional deduction of purchase Packaging Recovery Notes 50 percent, for qualifying expenditures (PRNs) from accredited reprocessors. incurred by companies in cleaning up

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 United States

Economic indicators

Indicator Rank* Actual GDP per capita 3 USD 57,436

CPI yr/yr 11 2.2% Real GDP growth 23 1.6%

Working age pop (percent of total) 20 66.3%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 14*/26** 84.72 EPS 15 2.55 Environmental tax revenue (percent of total tax revenue) 25 2.77% Renewable energy consumption 26 7.92% CO2 Emissions (10yr percent change) 7 -23.1% CO2 Emissions per capita (metric tons) 21*/9** 6.0 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies 14 10.40% (percent domestic technologies) Environmental R&D budget (percent total gov. R&D) 23 0.4% Development of environment-related technologies 1 25.53% (percent inventions worldwide) * = Rank within sample of 37 countries

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 99 trademarks or trademarks of KPMG International. NDPPS 655445 Carbon and climate change for inflation, in 2016 was USD 00.023 to 50 percent of the cost basis for The United States offers a carbon per kilowatt-hour for electricity property placed in service in 2017, 40 dioxide sequestration incentive in the generated through wind, closed-loop percent for property placed in service form of a credit for the sequestration biomass, or geothermal energy, and in 2018, and 30 percent for property of industrial source CO2 produced at USD 00.012 per kilowatt-hour for placed in service in 2020. qualified U.S. facilities, which must electricity generated through open- In the wake of the 2017 election capture at least 500,000 metric loop biomass, geothermal, municipal and the subsequent change in the tons of CO2 per year. The credit is solid waste, qualified hydropower, or administration and the composition inflation-adjusted each year. In 2016, marine/hydrokinetic energy. To qualify of Congress, major tax reform in it was USD 11.07 per metric ton for for the production tax credit or the the United States is being widely CO2 used as a tertiary injectant and investment tax credit, all facilities discussed. The impact of this reform then permanently sequestered and except for wind were required to begin on renewable energy and other green USD 22.14 for CO2 permanently construction by December 31, 2016; tax incentives is currently unknown but sequestered without first being used wind facilities must begin construction expected to be significant. as a tertiary injectant. The credit by December 31, 2019, although the expires at the end of the year in which amount of the credit is reduced by 20 Federal excise tax incentives on the government determines that percent annually for facilities that begin alcohol fuels, second-generation 75 million metric tons of CO2 have construction after 2016. biofuels, biodiesel (including renewable been captured and sequestered. diesel), and other specified alternative The United States offers an investment and renewable fuels, generally ranging The United States does not have tax credit of 10 percent of the cost of from USD 00.50 per gallon to USD 1.00 national carbon taxes, but does equipment to produce energy from a per gallon, are currently expired as of have subnational taxes in certain geothermal deposit. For solar electric December 31, 2016. jurisdictions. California, for example, or solar hot water property, there is a as part of its independent goal to 30 percent investment tax credit for The United States imposes fuel excise slash greenhouse gas emissions to property for which construction begins taxes on “taxable fuel” (gasoline, diesel 40 percent below 1990 levels, has a prior to 2020. The credit rate decreases fuel, and kerosene). Currently, the carbon cap and trade program, under to 26 percent for construction federal tax on gasoline is USD 00.184 which polluters must buy permits to beginning in 2020, to 22 percent per gallon and the tax on diesel fuel exceed state emissions thresholds. At for construction beginning in 2021, and kerosene is USD 00.244 per gallon. the last auction, in 2016, this translated and to 10 percent for construction The rate of tax includes the Leaking to almost USD 13 per ton of carbon. beginning thereafter or not completed Underground Storage Tank (LUST) This cost is passed on to consumers construction until after 2023. The Trust Fund tax rate of USD 00.001 per through higher fuel taxes. 10 percent credit for investments in gallon. Special rates apply in the case geothermal or solar property have no of certain uses of aviation fuel. Renewable energy and fuels expiration date. The U.S. Tax Code offers taxpayers The United States also imposes a investing in wind, biomass, The United States also offers retail fuel excise tax on any other liquid geothermal, , accelerated depreciation periods fuel sold for use or used as a fuel in qualified hydropower, and marine and of five years for renewable energy a motor vehicle or motorboat at a hydrokinetic energy property a choice property, including solar and wind specified rate of either USD 00.184 between a production tax credit and energy generating equipment and or USD 00.244 per gallon, including a 30 percent investment tax credit. biomass equipment. If placed in LUST tax. LPG and CNG are taxed at The production tax credit is generally service prior to 2020, this property USD 00.184 per energy equivalent available for the first 10 years after a is also eligible for an accelerated of a gallon (EEG) of gasoline, and facility has been placed in service. The first-year depreciation deduction. LNG is taxed at USD 00.244 per EEG credit rate, which is adjusted annually This accelerated deduction is equal of diesel.

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Green vehicles Pollution and ecosystems 11 is USD 15.25 and of Halon-1301 is The United States taxes large vehicles U.S. companies can choose to write off USD 152.50). In the alternative, for (i.e., “gas guzzlers”). The United States certain certified pollution control assets imported taxable products, the rate established its Gas Guzzler Tax as part over 60 or 84 months, depending on of tax is 1 percent of the entry value of the energy tax of 1978 to discourage the type of facility. This allowance has of the product. the production and purchase of no expiration date, but facilities must Innovation fuel-inefficient vehicles. The Gas be certified to take advantage of the Companies are entitled to both an Guzzler Tax is assessed on new incentive. To fund the Oil Spill Liability R&D deduction and an R&D credit cars that do not meet required fuel Trust Fund, the United States imposes if engaging in product or process economy levels, currently 22.5 miles a USD 00.09 per barrel excise tax on development and improvement. per gallon. These taxes apply only crude oil received at a U.S. refinery and to passenger cars. Trucks, minivans, imported petroleum products. An R&D deduction is available for and sport utility vehicles (SUVs) are research and experimental costs To fund the Sport Fish Restoration and not covered because these vehicles incurred in the development or Boating Trust Fund, the United States were not widely available in 1978 and improvement of a product, which generally imposes a 10 percent excise were rarely used for noncommercial includes a pilot model, process, tax on the sale price of specified sport purposes. The U.S. Internal Revenue formula, invention, technique, patent, fishing equipment. Service is responsible for administering or similar property. the Gas Guzzler program and collecting To fund the Inland Waterways Trust An additional R&D tax credit of the taxes from car manufacturers or Fund, the United States imposes a approximately 6 percent of expenses is importers. The amount of tax is posted USD 00.29 per gallon tax on liquid also available for taxpayers that engage on the window stickers of new cars— fuel used in a vessel in commercial in certain activities related to product the lower the fuel economy, the higher waterway transportation. An additional development and improvement and the tax. LUST tax of USD 00.001 per gallon is manufacturing process improvements. also imposed on fuel that is not taxable The Gas Guzzler Tax for each vehicle Generally, the credit is based on fuel or previously taxed alternative fuel. is based on its combined city and the R&D expenditures (wages, raw highway fuel economy value. Fuel The United States also imposes an materials, and research) economy values are calculated ozone depleting chemicals (ODC) incurred for increasing research before sales begin for the model excise tax on manufacturers and activities. If a company invests in year. The total amount of the tax is importers of ODCs who sell or use an energy research consortium for determined later and is based on the the ODCs and on the importer of energy research, the R&D tax credit is total number of “gas guzzler” vehicles specified taxable products that sells or 20 percent of such investment without sold that year. The tax is assessed uses those products. The rate of tax is regard to any increase in research after production has ended for the based on the weight of the ODCs used activities. model year and is paid by the vehicle in the manufacture of the product (e.g., manufacturer or importer. the 2017 rate of tax per pound of CFC-

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 101 trademarks or trademarks of KPMG International. NDPPS 655445 Vietnam

Economic indicators

Indicator Rank* Actual GDP per capita 36 USD 2,173

CPI yr/yr 7 4.7% Real GDP growth 2 6.2%

Working age pop (percent of total) 6 70.2%

* = Rank within sample of 37 countries

Environmental policy indicators

Rank Indicator Actual Sample*/World** EPI 36*/131** 58.5 EPS - - Environmental tax revenue (percent of total tax revenue) - - Renewable energy consumption 6 35.58% CO2 Emissions (10yr percent change) 36 93.8% CO2 Emissions per capita (metric tons) 36*/125** 1. 7 * = Rank within sample of 37 countries ** = World ranking of 180 countries

Research and development indicators

Indicator Rank* Actual Development of environment-related technologies 33 7.19% (percent domestic technologies) Environmental R&D budget (percent total gov. R&D) N/A** N/A** Development of environment-related technologies 36 0.01% (percent inventions worldwide) * = Rank within sample of 37 countries ** = Data is not available

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Renewable energy and fuels Depending on types of water, to residential. The government also Vietnam has a corporate income tax the tax varies from 1 percent to supports forest protection activities, incentive package for projects related 8 percent. There are also incentives such as planting or rehabilitating to energy and fuels in certain sectors for wastewater treatment projects, a forest. and locations. There is also a flat-rate exemptions from import duties for Innovation (10 percent) special machinery and equipment related General R&D tax reductions are and a flat-rate environment protection to such projects, and exemptions available for certain activities, but tax (10,00VND/liter) that applies to from duties when exporting recycling are subject to a number of required most conventional fuels. products. conditions. The incentives include Green vehicles Material resources and waste reduction in the corporate income Imported vehicles that do not conform The Ministry of Finance has tax rate and complete deductibility of to environmental standards are established an environment protection R&D expenses. subject to penalties, the amount of tax on nylon bags and an environment which depends on the act of violation. protection fee for water waste. In addition, hybrid cars purchases Pollution and ecosystems are entitled to a special consumption Vietnam imposes various penalties tax incentive. for violations of regulations relating Water to environment protection, including Vietnam has a natural resources administrative penalties and business tax that is based on the volume of license revocations. Land use fees water used for production/business are applied when the use of land is purposes. changed, such as from agricultural

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 103 trademarks or trademarks of KPMG International. NDPPS 655445 Appendices

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Table 1 – Selected economic indicators Country GDP per Capita CPI yr/yr Real GDP Working Age Industrial (US$) Growth Pop (% of Total) Production YoY Argentina $12,503 - -2.3% 63.9% 1.0% Australia $51,850 1.5% 2.5% 66.3% -1.9% Brazil $8,727 6.3% -3.6% 69.1% -8.2% Canada $42,210 1.4% 1.4% 67.9% -0.8% Chile $13,576 2.8% 1.6% 68.9% -0.6% Colombia $5,792 5.7% 2.0% 68.7% 1.7% Czech Republic $18,286 2.0% 2.4% 66.9% 4.8% Denmark $53,744 0.5% 1.1% 64.2% 1.7% Finland $43,169 1.1% 1.4% 63.2% -1.1% France $38,128 0.7% 1.2% 62.4% 1.5% Germany $41,902 1.7% 1.8% 65.9% 1.2% India $1,723 4.9% 6.8% 65.6% 3.2% Indonesia $3,604 3.0% 5.0% 67.1% 4.8% Ireland $62,562 -0.2% 5.2% 65.1% 36.9% Italy $30,507 0.5% 0.9% 63.9% 0.9% Japan $38,917 0.3% 1.0% 60.8% -1.4% Korea $9,360 1.8% 4.2% 72.9% -0.9% Malaysia $8,555 3.4% 2.3% 68.4% 4.6% Mexico $45,283 0.5% 2.1% 65.9% 1.0% Netherlands $38,345 1.3% 4.0% 65.2% -3.3% New Zealand $12,316 0.8% 2.8% 64.9% 1.6% Poland $19,832 0.9% 1.4% 69.5% 4.8% Portugal $9,465 -0.5% 4.8% 65.2% 1.7% Romania $8,929 5.4% -0.2% 67.2% 3.0% Russia $52,961 0.0% 2.0% 69.9% -3.1% Singapore $5,261 6.7% 0.3% 72.8% -5.0% South Africa $27,539 1.3% 2.8% 65.7% 0.8% Spain $26,609 1.6% 3.2% 66.3% 3.3% Sweden $51,165 1.7% 3.3% 62.8% 2.3% Switzerland $79,242 0.0% 1.3% 67.2% -2.4% Taiwan $22,453 1.7% 1.4% - -1.7% Thailand $5,899 1.1% 3.2% 71.8% 0.3% Ukraine $2,194 12.4% 2.3% 69.8% -13.2% United Arab Emirates $37,678 1.8% 2.7% 84.9% - United Kingdom $40,096 1.2% 1.8% 64.5% - United States $57,436 2.2% 1.6% 66.3% - Vietnam $2,173 4.7% 6.2% 70.2% -

Source: IMF, World Bank

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 105 trademarks or trademarks of KPMG International. NDPPS 655445 Table 2 – Selected environmental policy indicators Environmental Renewable Energy CO2 Emissions CO2 Emissions GDP per Unit of CO2 Emissions CO2 Emissions CO2 emission CO2 emission per Country Tax Revenue (% of EPI EPS Consumption (% of per Capita EPI Global Rank (% YoY) Energy Use (kt) 10yr Change global rank capita global rank total tax revenue) total consumption) (metric tons) Argentina 4.0% 79.84 - -1.3% 8.8% - 377906 16.4 12.4% 43rd 27th 75th Australia 7.8% 87.22 3.12 0.7% 8.4% 7.67 189819 4.5 40.5% 13th 16th 10th Brazil 1.9% 78.90 0.78 7.2% 43.6% 10.63 503677 2.5 56.6% 46th 10th 105th Canada 3.7% 85.06 2.84 -1.2% 20.6% 5.86 475735 13.5 -14.0% 25th 13th 16th Chile 6.1% 77.67 - 2.7% 30.3% 9.88 83171 4.7 49.6% 52nd 43rd 72nd Colombia 4.9% 75.93 - 12.2% 26.3% 18.39 89625 1. 9 56.1% 57th 41st 118th Czech Republic 7.9% 84.67 2.30 -2.4% 10.9% 7.05 98661 9.4 -19.2% 27th 36th 26th Denmark 8.2% 89.21 4.18 4.6% 27.6% 13.79 38067 6.8 -32.0% 4th 70th 48th Finland 6.6% 90.68 3.35 -5.2% 39.1% 6.42 46300 8.5 -33.0% 1st 59th 33rd France 4.4% 88.20 3.19 0.1% 12.6% 9.70 333191 5.1 -12.4% 10th 18th 69th Germany 5.4% 3.01 2.4% 12.4% 10.93 757313 9.2 -8.0% 30th 6th 29th India 13.4% 53.58 1. 15 0.8% 39.0% 8.40 2034752 1. 6 85.0% 141st 3rd 128th Indonesia - 65.85 1. 10 -20.0% 37.1% 11.38 479365 1. 9 51.3% 107th 12th 115th Ireland 7.6% 86.60 2.05 -2.1% 7.0% 16.26 34965 7. 6 -18.1% 19th 73rd 41st Italy 8.8% 84.48 2.77 -6.7% 12.1% 13.09 344768 5.7 -26.4% 29th 17th 61st Japan 5.1% 80.59 2.63 1.1% 4.5% 9.95 1243384 9.8 0.1% 39th 5th 25th Korea 10.3% 70.61 2.63 1.4% 1.6% 6.22 592499 11. 8 27.1% 80th 8th 20th Malaysia 1.5% 74.23 - 8.1% 6.8% 7. 7 6 236511 8.0 49.4% 63rd 25th 37th Mexico -1.8% 73.59 - 1.6% 9.4% 10.45 488602 4.0 20.4% 67th 11th 83rd Netherlands 9.3% 82.03 3.63 0.4% 4.7% 9.85 169973 10.1 -2.8% 36th 29th 23th New Zealand 4.2% 88.00 - -1.6% 30.8% 7.68 33960 7. 7 -0.4% 11th 74th 40th Poland 6.0% 81.26 2.99 0.8% 11.1% 9.03 302333 8.0 0.0% 38th 21st 39th Portugal 6.4% 88.63 2.13 0.4% 25.6% 12.39 46263 4.4 -24.4% 7th 60th 76th Romania - 83.24 - -13.4% 21.7% 11.63 70736 3.5 -30.0% 34th 45th 88th Russia - 83.52 0.60 -2.5% 3.3% 4.94 1789074 12.5 11.5% 32nd 4th 18th Singapore - 87.04 - -7.5% 0.5% 16.15 50557 9.4 62.4% 14th 56th 27th South Africa 8.2% 70.52 0.78 -0.2% 16.9% 4.69 471239 8.9 16.5% 81st 14th 30th Spain 5.6% 88.91 2.22 -10.5% 15.8% 12.47 236969 5.1 -26.2% 6th 24th 68th Sweden 5.2% 90.43 3.10 -5.8% 49.9% 8.46 44327 4.6 -19.1% 3rd 63rd 73rd Switzerland 6.6% 86.93 3.29 6.9% 22.7% 16.62 40348 5.0 0.4% 16th 67th 70th Taiwan - 74.88 - 0.0% 0.0% 0.00 - - - 60th - - Thailand - 69.54 - -0.7% 23.0% 7.50 303118 4.5 35.0% 91st 20th 74th Ukraine - 79.69 - -8.3% 2.8% 3.27 169122 18.7 58.3% 44th 22nd 58th United Arab - 69.35 - -1.9% 0.1% 8.07 457473 7. 1 -15.3% 92nd 30th 6th Emirates United Kingdom 7.2% 87.38 3.33 -2.1% 4.4% 12.53 5186168 16.4 -8.7% 12th 15th 45th United States 2.8% 84.72 2.55 1.4% 7.9% 7.36 271101 6.0 -23.1% 26th 2nd 9th Vietnam - 58.50 - -3.5% 35.6% 7.67 152624 1. 7 93.8% 131st 33rd 125th

Source: OECD, World Bank

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 Environmental Renewable Energy CO2 Emissions CO2 Emissions GDP per Unit of CO2 Emissions CO2 Emissions CO2 emission CO2 emission per Country Tax Revenue (% of EPI EPS Consumption (% of per Capita EPI Global Rank (% YoY) Energy Use (kt) 10yr Change global rank capita global rank total tax revenue) total consumption) (metric tons) Argentina 4.0% 79.84 - -1.3% 8.8% - 377906 16.4 12.4% 43rd 27th 75th Australia 7.8% 87.22 3.12 0.7% 8.4% 7.67 189819 4.5 40.5% 13th 16th 10th Brazil 1.9% 78.90 0.78 7.2% 43.6% 10.63 503677 2.5 56.6% 46th 10th 105th Canada 3.7% 85.06 2.84 -1.2% 20.6% 5.86 475735 13.5 -14.0% 25th 13th 16th Chile 6.1% 77.67 - 2.7% 30.3% 9.88 83171 4.7 49.6% 52nd 43rd 72nd Colombia 4.9% 75.93 - 12.2% 26.3% 18.39 89625 1. 9 56.1% 57th 41st 118th Czech Republic 7.9% 84.67 2.30 -2.4% 10.9% 7.05 98661 9.4 -19.2% 27th 36th 26th Denmark 8.2% 89.21 4.18 4.6% 27.6% 13.79 38067 6.8 -32.0% 4th 70th 48th Finland 6.6% 90.68 3.35 -5.2% 39.1% 6.42 46300 8.5 -33.0% 1st 59th 33rd France 4.4% 88.20 3.19 0.1% 12.6% 9.70 333191 5.1 -12.4% 10th 18th 69th Germany 5.4% 3.01 2.4% 12.4% 10.93 757313 9.2 -8.0% 30th 6th 29th India 13.4% 53.58 1. 15 0.8% 39.0% 8.40 2034752 1. 6 85.0% 141st 3rd 128th Indonesia - 65.85 1. 10 -20.0% 37.1% 11.38 479365 1. 9 51.3% 107th 12th 115th Ireland 7.6% 86.60 2.05 -2.1% 7.0% 16.26 34965 7. 6 -18.1% 19th 73rd 41st Italy 8.8% 84.48 2.77 -6.7% 12.1% 13.09 344768 5.7 -26.4% 29th 17th 61st Japan 5.1% 80.59 2.63 1.1% 4.5% 9.95 1243384 9.8 0.1% 39th 5th 25th Korea 10.3% 70.61 2.63 1.4% 1.6% 6.22 592499 11. 8 27.1% 80th 8th 20th Malaysia 1.5% 74.23 - 8.1% 6.8% 7. 7 6 236511 8.0 49.4% 63rd 25th 37th Mexico -1.8% 73.59 - 1.6% 9.4% 10.45 488602 4.0 20.4% 67th 11th 83rd Netherlands 9.3% 82.03 3.63 0.4% 4.7% 9.85 169973 10.1 -2.8% 36th 29th 23th New Zealand 4.2% 88.00 - -1.6% 30.8% 7.68 33960 7. 7 -0.4% 11th 74th 40th Poland 6.0% 81.26 2.99 0.8% 11.1% 9.03 302333 8.0 0.0% 38th 21st 39th Portugal 6.4% 88.63 2.13 0.4% 25.6% 12.39 46263 4.4 -24.4% 7th 60th 76th Romania - 83.24 - -13.4% 21.7% 11.63 70736 3.5 -30.0% 34th 45th 88th Russia - 83.52 0.60 -2.5% 3.3% 4.94 1789074 12.5 11.5% 32nd 4th 18th Singapore - 87.04 - -7.5% 0.5% 16.15 50557 9.4 62.4% 14th 56th 27th South Africa 8.2% 70.52 0.78 -0.2% 16.9% 4.69 471239 8.9 16.5% 81st 14th 30th Spain 5.6% 88.91 2.22 -10.5% 15.8% 12.47 236969 5.1 -26.2% 6th 24th 68th Sweden 5.2% 90.43 3.10 -5.8% 49.9% 8.46 44327 4.6 -19.1% 3rd 63rd 73rd Switzerland 6.6% 86.93 3.29 6.9% 22.7% 16.62 40348 5.0 0.4% 16th 67th 70th Taiwan - 74.88 - 0.0% 0.0% 0.00 - - - 60th - - Thailand - 69.54 - -0.7% 23.0% 7.50 303118 4.5 35.0% 91st 20th 74th Ukraine - 79.69 - -8.3% 2.8% 3.27 169122 18.7 58.3% 44th 22nd 58th United Arab - 69.35 - -1.9% 0.1% 8.07 457473 7. 1 -15.3% 92nd 30th 6th Emirates United Kingdom 7.2% 87.38 3.33 -2.1% 4.4% 12.53 5186168 16.4 -8.7% 12th 15th 45th United States 2.8% 84.72 2.55 1.4% 7.9% 7.36 271101 6.0 -23.1% 26th 2nd 9th Vietnam - 58.50 - -3.5% 35.6% 7.67 152624 1. 7 93.8% 131st 33rd 125th

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 107 trademarks or trademarks of KPMG International. NDPPS 655445 Table 3 – Selected research and development indicators Development Diffusion of Development of Energy Relative of Environmentally environment- environment- public advantage in environment- related related Country related RD&D environment- related government R&D technologies, technologies, % budget, % related technologies, budget, % total % all all technologies GDP technology % inventions government R&D technologies worldwide Argentina 17.50% 4.26% - 1. 74 0.07% 10.49% Australia 8.63% 3.87% 0.05% 0.86 0.19% 9.30% 8.31% 2.29% 0.05% 0.83 0.42% 6.67% Brazil 7.44% - - 0.74 0.14% 9.25% Canada 10.12% 3.90% - 1. 01 2.14% - Chile 21.21% 2.44% - 2.11 0.05% 10.69% Colombia 8.82% - - 0.88 0.03% 9.49% Czech Republic 7.30% 1.83% 0.01% 0.73 0.11% 10.40% Denmark 28.62% 1.91% 0.06% 2.84 0.98% 21.60% Finland 11.71% 1.49% 0.12% 1. 16 0.99% 15.13% France 12.95% 1.77% 0.05% 1.29 6.02% 14.67% Germany 12.86% 2.86% 0.03% 1.28 16.34% 14.52% India 12.73% - - 1.27 0.80% 4.88% Indonesia 10.24% - - 1.02 0.02% - Ireland 7.94% 1.28% 0.02% 0.79 0.13% 14.29% Italy 9.57% 3.36% 0.02% 0.95 2.38% 8.75% Japan 9.48% 2.03% 0.08% 0.94 23.46% 9.46% Malaysia 9.95% - - 0.99 0.08% 14.29% Mexico 10.63% 1.59% - 1.06 0.10% 11.23% Netherlands 9.83% 0.72% - - 1.26% - New Zealand 9.61% 10.71% 0.01% 0.95 0.04% 13.80% 0.00% - - 0.00 0.00% - Poland 15.31% 6.12% 0.03% 1.52 0.43% 12.12% Portugal 13.76% 3.48% 0.00% 1.37 0.06% 11.98% Romania 15.92% 8.33% - 1.58 0.07% 13.16% Russia 8.98% 0.14% - 0.89 0.35% 6.82% Singapore 7.36% - - 0.73 0.13% 8.53% South Africa 9.71% - - 0.97 0.13% 14.70% South Korea 9.09% 2.19% 4.52% 0.90 9.44% 9.88% Spain 13.20% 3.77% 0.02% 1.31 0.85% 11.71% Sweden 10.31% 1.94% 0.03% 1.02 1.03% 11.51% Switzerland 7.66% 0.22% 0.04% 0.76 0.78% 9.51% Thailand 4.86% - - 0.48 0.01% - Ukraine 9.03% - - 0.90 0.05% 6.73% United Kingdom 11.50% 2.80% 0.02% 1. 14 3.69% 10.94% United States 11.55% 0.40% 0.04% 1. 15 17.69% 8.41% Vietnam 7.19% - - 0.72 0.01% 9.52% Source: OECD

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 655445 © 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered The KPMG Green Tax Index 109 trademarks or trademarks of KPMG International. NDPPS 655445 Contact information

Argentina Denmark Ireland Omar D. Díaz Niels Vendelbo Michael Hayes Socio Líder de Energías Renovables Partner, Assurance Partner T: +54 11 4316 5865 T: +4525543658 T: +353 1 410 1656 E: [email protected] E: [email protected] E: [email protected]

Australia Finland Italy David Gelb Tomas Otterström PierMario Barzaghi Partner Partner, Advisory Partner in Charge in Climate Change T: +61 3 9288 6160 T: +358207603665 Services E: [email protected] E: [email protected] T: +3902676431 E: [email protected] Brazil Matti Alpua Ricardo Zibas Senior Manager, Tax & Legal Japan Sócio D, SP Risk Consulting T: +358207603922 Kazuhiko Saito Sustentabilidade E: [email protected] Associate Partner, SUS-Assurance T: +551139401795 T: +81335485303 E: [email protected] France E: [email protected] Philippe Arnaud Canada Partner, Audit IGH Malaysia George Kondopulos T: +33155686477 Lianseng Soh Partner, TX – Corporate Tax E: [email protected] Partner T: +1 604 646 6350 T: +603 7721 3388 E: [email protected] Germany E: [email protected] Lars Behrendt Chile Tax Services Emily Shiau Li Wong Ricardo Jimenez T: +49 40 32015 5855 Director Gerente Senior Sustainability, E: [email protected] T: +603 7721 3388 Sustainability E: [email protected] T: +56227981502 India E: [email protected] Nabin Ballodia Mexico Partner – International Tax and David Escalante Colombia Regulatory Energy Tax Partner Maria Agudelo T: +911243074321 T: +52 81 8122 1884 Vicepresidente, Risk Consulting +919810113710 E: [email protected] T: +5743556060 E: [email protected] E: [email protected] The Netherlands Sourav Jain Sander Derksen Czech Republic Manager, Tax-CBT-IGH-DEL Senior Tax Manager Lucie Prajzlerova T: +911203868000 T: +31 88 909 1046 Associate Manager E: [email protected] E: [email protected] T: +420 222 123 360 E: [email protected] Indonesia Santy Dermawi Assistant Manager, DA T: +62215740877 E: [email protected]

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© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. ThePrinted KPMG in the name U.S.A. and The logo KPMG are registered name and logo are trademarksregistered trademarks or trademarks or trademarks of KPMG International. of KPMG International. NDPPS 655445 NDPPS 655445