Is Spain planning to reform road tax based on CO2 emissions?

Spain has discussed reforming road tax (Impuesto de Circulacion) to align with CO2 emissions, similar to France and Germany. Current proposals suggest moving away from fiscal horsepower (engine size) to an environmental band system. However, no major reform has been implemented as of 2026. The debate continues about balancing revenue, fairness, and environmental goals.

Why is Spain considering road tax reform?

The main arguments for reform are environmental: fiscal horsepower does not reflect a vehicle is emissions, so a large petrol car and a small diesel with similar engine sizes pay similar tax despite different CO2 outputs. Reform would better incentivise low-emission vehicles. Critics also argue the current system is unfair to owners of older, larger-engined vehicles.

What would a CO2-based road tax system look like in Spain?

A CO2-based system would likely use bands similar to registration tax: zero or very low tax for electric and low-emission vehicles, moderate tax for mid-range emissions, and significantly higher tax for high-emission vehicles. France uses this approach with its annual road tax system. Spain could implement a similar graduated structure.

When might road tax reform happen in Spain?

As of 2026, no firm timeline exists for road tax reform in Spain. The current fiscal horsepower system is deeply embedded in municipal finance and vehicle culture. Reform would require legislative change and consensus between national government and municipalities. Any changes are likely years away from implementation.

Will electric vehicles still be exempt under road tax reform?

Almost certainly yes. Any reform proposal maintains or enhances incentives for zero-emission vehicles. The electric vehicle exemption is politically popular and aligns with EU emissions targets. Reform would likely extend or make permanent the electric vehicle exemption, while potentially increasing taxes on high-emission diesel vehicles.

Spain Road Tax Reform 2026 — Proposed Changes and Future ...

Spain Road Tax Reform 2026

Spain is one of the few major EU countries that still bases road tax primarily on engine size (fiscal horsepower) rather than CO2 emissions. As Europe moves towards environmental taxation, Spain is debating whether to modernise its Impuesto de Circulacion. ITV.es and DGT.

This guide explores the current debate around road tax reform in Spain for 2026.

Current Road Tax System

How It Works Now

Spain's current road tax (Impuesto de Circulacion) is based on fiscal horsepower (potencia fiscal):

Calculation factors:

Engine cylinder capacity
Number of cylinders
Specific power output
Not directly related to CO2 emissions

Problem:

A 2.0L petrol turbo and a 1.9L diesel can have similar fiscal horsepower
But their CO2 emissions differ significantly
Tax does not reflect environmental impact

Current Rate Structure

| Fiscal Horsepower | Madrid Annual Tax |

|-------------------|-------------------|

| Up to 8 HP | EUR 26 |

| 8-12 HP | EUR 67 |

| 12-16 HP | EUR 143 |

| 16-20 HP | EUR 179 |

| Over 20 HP | EUR 224 |

Madrid rates — Barcelona charges approximately 40% more.

Arguments for Reform

Environmental Concerns

Current system does not incentivise low-emission vehicles:

Electric vehicles have zero emissions but pay road tax during exemption
A 15-year-old diesel SUV and a new hybrid may pay similar tax
No link between tax paid and actual environmental impact

EU pressure:

EU Green Deal requires member states to address transport emissions
Spain has committed to reducing transport emissions
Tax reform is one tool available to policymakers

Fairness Arguments

Intergenerational fairness:

Older drivers on lower incomes may own older, larger vehicles
They pay higher road tax due to engine size
Reform could protect these owners while incentivising transition

Urban vs rural:

Rural drivers may depend more on cars
Urban residents may have better public transport
Reform could include social considerations

Reform Proposals

Proposal 1: CO2-Based Bands

The most discussed proposal mirrors the registration tax (Impuesto de Matriculacion):

| CO2 Emissions | Annual Tax |

|--------------|-----------|

| 0-60 g/km (electric, hybrid) | EUR 0 |

| 61-120 g/km | EUR 50 |

| 121-160 g/km | EUR 100 |

| 161-200 g/km | EUR 150 |

| 200+ g/km | EUR 250+ |

This structure would:

Reward low-emission vehicle owners
Increase costs for high-emission vehicles
Maintain revenue for municipalities

Proposal 2: Vehicle Age Adjustment

Another proposal keeps fiscal horsepower but adds an age multiplier:

New vehicles: 100% of standard rate
5-10 years old: 75% of standard rate
10-15 years old: 50% of standard rate
15+ years old: 25% of standard rate

This would:

Reduce costs for owners of older vehicles
Encourage turnover to newer, cleaner vehicles
Maintain revenue structure

Proposal 3: Emissions + Age Combined

A hybrid approach:

Base tax on CO2 emissions
Apply age reduction factor
Maintain municipal revenue levels
Protect low-income older vehicle owners

Challenges to Reform

Political Challenges

Municipal revenue concerns:

Ayuntamientos rely on road tax revenue
Reform could reduce income if rates change
Compensatory mechanisms needed

Automotive industry concerns:

Higher road taxes could discourage car purchases
Spain has significant automotive manufacturing
Industry lobbying against environmental taxation

Voter resistance:

Any change that increases costs for some owners is unpopular
Rural and older vehicle owners are a significant voting bloc
Governments hesitant to impose visible costs

Technical Challenges

Data availability:

CO2 data exists for all vehicles via ITV records
Connecting to tax system is straightforward
However, older vehicles may lack reliable CO2 data

Implementation timeline:

IT systems need updating
Staff training required
Public communication needed
2-3 years minimum implementation

Regional Variation

Current Regional Differences

Road tax rates already vary significantly between municipalities:

| City | 1.6L Petrol Tax | vs Madrid |

|------|----------------|----------|

| Madrid | EUR 144 | Baseline |

| Barcelona | EUR 203 | +41% |

| Valencia | EUR 120 | -17% |

| Seville | EUR 130 | -10% |

| Bilbao | EUR 170 | +18% |

Reform could increase or decrease this variation.

What Reform Would Change

For electric vehicle owners:

Exemption likely maintained or enhanced
Could become permanent rather than time-limited

For diesel vehicle owners:

Most vulnerable to reform
Diesel typically emits more CO2 than petrol
Could face significant increases

For older petrol vehicle owners:

May pay more or less depending on CO2 vs fiscal horsepower
Age adjustment could provide relief
Low-income protections likely

European Context

Where Other Countries Stand

Germany:

Road tax based on CO2 and engine size
EUR 2 per gram/km above 95g/km
Diesel surcharge of EUR 0.40/100km
Reform already in place

France:

Annual road tax based on CO2 bands
Up to EUR 10,000/year for highest emitters
Electric vehicles exempt
Most comprehensive system in EU

UK:

First-year rate based on CO2
Standard rate based on fuel type (not CO2)
Zero-emission vehicles pay GBP 0 standard rate
Different approach, not purely CO2-based

Netherlands:

No annual road tax (replaced by mobility tax)
Very high purchase taxes
Different philosophy entirely

Spain's Position

Spain is behind its neighbours on vehicle environmental taxation:

No annual CO2-based road tax
Registration tax has CO2 bands but not annual tax
Electric vehicle exemptions vary by municipality
Reform would bring Spain closer to EU norms

What Owners Should Do Now

Current Situation

As of 2026, no reform has been implemented:

Current fiscal horsepower system remains in place
Electric vehicle exemptions continue as before
Municipal rates unchanged

Preparing for Potential Reform

If reform happens:

High-emission diesel owners may pay more
Electric vehicle owners likely continue to benefit
Low-emission petrol/hybrid owners likely see little change

Long-term vehicle purchasing:

Consider low-emission vehicles
Electric vehicles increasingly attractive
High-emission diesel increasingly risky

Key Takeaways

1. No reform implemented yet as of 2026 — current system continues

2. CO2-based proposals exist but face political hurdles

3. Electric vehicles likely safe under any reform scenario

4. Diesel owners most at risk from reform

5. Implementation timeline is likely years away

6. Regional variation will likely continue

7. Municipal revenue concerns are a key barrier

8. Watch for announcements — reform discussions continue in government

For now, vehicle owners should monitor the debate but face no immediate changes. If you are purchasing a new vehicle, prioritising lower emissions will serve you well under any reform scenario.

Official Resources: ITV.es - ITV Booking | DGT - Direccion General de Trafico