Estonia: 2026 excise duty increase on energy carriers cancelled; other energy-related tax developments
The changes aim to mitigate high energy costs and support energy-intensive companies.
The Estonian Parliament (Riigikogu) recently adopted amendments to the Alcohol, Tobacco, Fuel, and Electricity Excise Act, which repeal the increase in excise duties on energy products that was planned for May 1, 2026.
The repeal, effective May 1, 2026, affects motor fuels, fuel oils, natural gas, and electricity, causing the 2025 rates to remain in effect for 2026. However, the excise duty increases planned for 2027 will become effective at the rates and by the deadlines set earlier.
Other amendments, which apply retroactively from January 1, 2026, include:
- New discount system on renewable energy fees for large, energy-intensive electricity consumers, provided they meet certain energy efficiency requirements
- Change to allow companies with intensive gas consumption that use battery storage solutions to qualify for a preferential natural gas excise duty rate
- Income tax exemption for compensation received from participation in electricity balancing markets
Read a May 2026 report prepared by the KPMG member firm in Estonia