Andorra Public Backs Renewables Surge Amid IMF Carbon Tax Push

Andorra's latest public opinion survey reveals 84% support for boosting domestic renewable energy production, aligning with Europe's decarbonisation drive and the principality's historical dependence on imported supplies.

The Observatori's barometer for the second half of 2025 shows this approval spans political affiliations, residential zones and social groups, reflecting a notable attitudinal shift in recent years. Respondents highlight environmental gains alongside economic advantages, such as shielding households from price volatility and supply risks. Over half—53.2%—expect renewables to steady or cut electricity bills amid cost-of-living pressures and inflation.

Solar energy leads preferences at 55%, with wind at 23% and hydro at 20%. Geothermal draws 8.4% and biomass just 2.8%, indicating a preference for established, practical options. For siting projects, 53.2% back a balanced mix of public and private buildings plus non-urban land, while 34% favour remote spots away from residences and 6.1% stick to developed areas. This suggests willingness to accommodate visible setups if distributed fairly with limited disruption.

Landscape impacts in Andorra's rugged terrain—key to tourism and heritage—split views: 34% positive, 19% negative, and 35.4% neutral or undecided. Stronger public outreach could ease concerns.

Household uptake remains low despite the enthusiasm. Diesel heating prevails at 56.6%, electric radiators at 25.2%, with greener choices like aerothermal systems (5.3%) and FEDA Ecoterm district heating (2.3%) barely used. Barriers include costs, technical hurdles and information gaps, underscoring needs for subsidies, financing and advice.

In a related development, the International Monetary Fund (IMF) has urged Andorra to raise its carbon tax to €150 per tonne by 2030, paired with at least 5% annual efficiency gains in energy, transport and residential sectors, to hit carbon neutrality by 2050. The IMF's report on climate change in small open economies like Andorra warns that the tax alone falls short without efficiency measures.

It flags climate risks to long-term growth, including ski tourism reliant on shrinking snow cover—projected to drop 75-100cm annually by 2090 amid rising temperatures and falling precipitation (-22.01mm per decade since 2050). Renewables face challenges too: hydropower, thermal and wind output could suffer from altered weather, extreme events and shifting demand patterns, with summer peaks offsetting winter declines.

Andorra's per capita CO2 emissions match the EU average of 5.6 tonnes, slightly above France and Spain, with forests absorbing 23% as of 2017 data. Transport emissions have stabilised since 2010 due to efficiency and electric vehicles, but reductions lag neighbours.

The IMF predicts a carbon tax hike could double oil prices and raise other energy costs 26-61%, generating 0.5-0.8% of GDP in fuel tax revenue, with limited GDP impact—though tourism effects are unmodelled. These steps would support the public-backed renewables push by addressing broader decarbonisation hurdles.