Key messages:

• The revenues of taxing the CO2 content of fuels with 27 UAH/t CO2 are estimated between UAH 5.6 and 6.1 bln per year depending on draft law option for taxation (based on 2017 energy balance and fuel specific CO2 contents).
• The highest price increase from taxation results for coal (between +3.5 and +4.3%). Effects on prices for transport fuels, electricity, natural gas and household district heating tariffs are estimated between +0.2 and +2.7%.
• Depending on whether wholesale electricity prices (including CO2 tax) reach price caps, non fossil electricity producer on might make windfall profits.