Summary
Details
- Colombia
Mandatory where fossil fuel tax liability applies.
Carbon neutrality certification and use of the non-causation mechanism may be optional, but companies using it must follow the regulated procedure.
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What’s Required
1. Carbon tax on fossil fuels
The tax applies to the carbon content of fossil fuels used for combustion. Legal sources describe the carbon tax as a charge on the carbon content of fossil fuels, including petroleum derivatives and fossil gas used for energy purposes when used for combustion.
2. Tax administration
DIAN administers and collects the national carbon tax and has tax enforcement powers for investigation, determination, control, discussion, refund, and collection.
3. Non-causation mechanism
The law provides a non-causation mechanism where eligible taxpayers certify carbon neutrality. Later rules created procedures for this mechanism, including Decreto 926 de 2017. Colombia’s Ministry of Environment states that the decree establishes the procedure for non-causation of the National Carbon Tax.
4. Carbon neutrality evidence
To apply the non-causation mechanism, companies must provide evidence of neutralization of the emissions caused by the relevant fossil fuel. Ministry guidance states that projects must be validated and removals verified by independent bodies accredited under ISO 14065 requirements, either by ONAC or by accreditation bodies that are members of the International Accreditation Forum under specified conditions.
5. Limits on non-causation
Colombian legal sources state that non-causation of the national carbon tax may not exceed 50% of the tax caused.
Important Deadlines
2016: Law 1819 created the National Carbon Tax.
2017: Decreto 926 established the procedure for non-causation of the National Carbon Tax.
Ongoing: Taxpayers and fuel-chain actors must comply with tax, documentation, and non-causation procedures where applicable.
2050: Colombia’s carbon neutrality strategy aligns with the country’s long-term carbon neutrality objective, supported by programs such as the National Carbon Neutrality Program.
Current Status
The carbon tax remains part of Colombia’s climate policy toolkit. The Ministry of Environment describes it as an economic and market instrument for greenhouse gas mitigation, and Colombia also operates carbon neutrality programs to strengthen organizational emissions management.
Current status:
Active national carbon tax.
Applies to fossil fuel carbon content.
Administered by DIAN.
Includes a regulated non-causation mechanism.
Connects to carbon neutrality certification and offset verification.
Relevant to fuel suppliers, transport, aviation, energy users and carbon project developers.
Penalties for Non-Compliance
Possible consequences include:
Tax assessment and collection action.
Rejection of non-causation claims.
Requirement to pay tax where neutrality evidence is insufficient.
Penalties under tax law.
Verification or accreditation issues.
Reputational risk from weak carbon neutrality claims.
Buyer rejection of low-quality offsets.
Examples of Known Violations / Failure Modes
Typical failure modes include:
Claiming tax non-causation without proper certification.
Using weak or unverified carbon credits.
Failing to document fuel volumes and emissions equivalents.
Missing validation or verification requirements.
Treating tax neutrality as company-wide carbon neutrality.
Double-counting reductions.
Relying on projects with unclear ownership or permanence.
Misunderstanding the 50% non-causation limit.
Poor coordination between tax, legal and sustainability teams.
Confusing Colombia’s tax mechanism with voluntary offsetting.
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