Colombia's national carbon tax

Colombia's national carbon tax applies to the carbon dioxide equivalent content of all fossil fuels burned for combustion, including petroleum products, fossil gas and solid fuels. It was created by articles 221 to 223 of Law 1819 of 2016 and reformed by articles 47 to 49 of Law 2277 of 2022. The tax authority DIAN collects and administers it, it is filed and paid every two months, and it is deductible from income tax.

For a company, the part that matters most is not the rate but the carbon neutrality non-accrual mechanism, which can waive up to 50% of the tax.

Taxable event and who pays

The taxable event is the sale within Colombia, the withdrawal for own consumption, the import for own consumption or the import for sale of fossil fuels. The tax accrues at a single stage, on whichever event happens first.

• Gas and petroleum products: the taxpayer is whoever buys the fuel from the producer or importer, or the producer or importer itself when withdrawing for own use. Producers and importers are the parties responsible for assessing it. On producer sales it accrues on the invoice date; on imports, on the customs clearance date.
• Coal: the taxpayers and responsible parties are those who acquire or use it for their own consumption inside the country, and the tax accrues on the sale to the final consumer, on the invoice date.

Fuels covered and exclusions

The rate is set per unit of fuel according to its emission factor: coal, fuel oil, diesel (ACPM), jet fuel, kerosene, gasoline, liquefied petroleum gas and natural gas. Several exclusions are worth knowing:

• LPG only triggers the tax on sales to industrial users.
• Natural gas only triggers it on sales to the hydrocarbon refining and petrochemical industry.
• Coking coal does not trigger the tax.
• Fuels exported by the producer, and coal exported by the exporter, do not trigger it.
• Fuel ethanol blended into gasoline and domestically produced biofuel blended into diesel are not subject to the tax.

Rate and annual indexation

The law set the rate at 20,500 pesos per tonne of CO2 equivalent, adjusted every 1 February by the previous year's consumer price index published by DANE plus one percentage point, until it reaches three tax value units (UVT) per tonne. Per-unit fuel rates rise at the same pace.

For 2026, DIAN set the rate at 29,070.49 pesos per tonne of CO2 equivalent through Resolution 000003 of 2026, a 6.10% increase (5.10% inflation for 2025 plus one point), effective 1 February 2026.

Coal phase-in

Coal entered the tax gradually. Paragraph 6 of article 222 sets this schedule against the full rate:

The carbon neutrality non-accrual mechanism

This is the provision that matters most to a fuel-consuming company. Paragraph 1 of article 221 states that the tax does not accrue for taxpayers that certify carbon neutrality, whether the certification is obtained by the taxpayer itself or through the final consumer or user, under rules issued by the Ministry of Environment and Sustainable Development.

Three rules define its scope:

1. A 50% cap. Non-accrual can never exceed fifty per cent of the tax accrued. Law 2277 of 2022 introduced that limit.
2. Single use of the certificate. A carbon neutral certificate used for this benefit cannot be reused for the same benefit or for any other tax treatment. This is the rule that prevents double counting.
3. A defined procedure. The process is developed in Decree 1625 of 2016, the single regulatory decree for tax matters. It requires, among other things, filing the request with the producer or importer before the tax accrues, evidence of the voluntary cancellation of the emission reductions or removals, and a verification statement quantifying in tonnes of CO2 equivalent the fuel that has been neutralised.

The Ministry of Environment may also regulate control mechanisms and set technical criteria for the mitigation outcomes used to access the mechanism.

Where it goes wrong in practice

The mechanism usually fails on traceability, not on the availability of carbon credits. To hold up under review you need to show exactly how many tonnes of CO2 equivalent correspond to the fuel purchased in the period, match that volume to the invoices and to the cancellation evidence, and keep the verification documentation. If fuel consumption lives in spreadsheets by site while invoices sit in another system, reconciling that chain at year end is the expensive part.

Where the revenue goes

Article 223 earmarks 80% of the revenue, through the Ministry of Environment and Sustainable Development, for purposes such as coastal erosion management, reducing and monitoring deforestation, protecting water sources, restoring strategic ecosystems and financing national climate action targets.

Frequently asked questions

What is the 2026 carbon tax rate in Colombia?

29,070.49 pesos per tonne of CO2 equivalent, set by DIAN Resolution 000003 of 2026 and effective from 1 February 2026.

How is the rate updated?

Every 1 February, by the previous year's DANE consumer price index plus one percentage point, until it reaches three UVT per tonne of CO2 equivalent.

Can offsets remove the tax entirely?

No, only partly. The carbon neutrality non-accrual mechanism cannot exceed 50% of the tax accrued, and the certificate used cannot be reused for any other tax benefit.

Does coal pay the tax?

Yes, on a phase-in: 0% in 2023 and 2024, 25% in 2025, 50% in 2026, 75% in 2027 and the full rate from 2028. Coking coal is excluded.

Supporting a non-accrual claim means fuel consumption that is measured, converted into tonnes of CO2 equivalent and traceable back to the invoice. That is exactly what Manglai's carbon footprint solution organises.