European Commission proposed on Wednesday three new taxes in the EU bloc, which over the next few decades would allow the reimbursement of funds raised by the EU to finance the grant component of NextGenerationEU, Reuters reports.

The first tax is based on the revenue from the trading of emission allowances (ETS). Under the current EU emissions trading scheme, most of the revenue from the auctioning of emission allowances are transferred to national budgets. EC proposes that in the future 25% of revenues from the EU Emissions Trading Scheme will be transferred to the EU budget. Revenues for the EU budget are estimated at around €12 billion a year on average over the period 2026-2030 (€ 9 billion on average over the period 2023-2030), according to Agerpres.

The second measure is based on the resources generated by the proposed EU border adjustment mechanism for carbon dioxide emissions. The Commission is proposing to allocate 75% of the revenues generated by this border adjustment mechanism to the EU budget. Revenues for the EU budget are estimated at around €1 billion per year on average for the period 2026-2030 (€ 0.5 billion on average over the period 2023-2030). The Carbon Dioxide Border Adjustment Mechanism is not expected to generate revenue during the transition period from 2023 to 2025.

The third tax is based on the share of residual profits of multinational companies that will be reallocated to EU Member States under the recent OECD/G20 agreement on the reallocation of tax rights (“Pillar One”). The Commission proposes an own resource equivalent to 15% of the share of the residual profits of the companies covered by the application domain. The Commission is committed to proposing a directive in 2022, once the details of the OECD/G20 Inclusive Framework Agreement on Pillar One are finalized, in order to implement the Pillar One agreement in line with the requirements of the single market. This process is complementary to the Second Pillar Directive, for which the Commission has adopted a separate proposal. Pending the completion of the agreement, revenues to the EU budget could amount to around 2.5-4 billion euros a year.

“Through today’s package, we are laying the groundwork for the NextGenerationEU reimbursement and providing essential support for the ‘Fit for 55′ package by implementing funding for the Climate Mitigation Fund. Therefore, through the set of new own resources, we make sure that the next generation will really benefit from NextGenerationEU,” said Johannes Hahn, Commissioner for Budget and Administration.

In the period 2026-2030, these new sources of revenue are expected to generate, on average, a total of up to €17 billion a year for the EU budget.