On Wednesday 4 March, in conjunction with the publication of its ‘climate law’ (see EUROPE 12439/2), the European Commission launched its work on the revision of the Energy Taxation Directive, which has remained unchanged since 2003.
The envisaged revision aims at aligning the taxation of energy products and electricity with EU climate policies, in the framework of the European Green Deal, according to the inception impact assessment published by the Commission.
“The review of the Energy Taxation Directive needs to do three things in order to establish a ‘green’ taxation framework. First, we must address the minimum tax rates covering energy products and electricity to tackle the existing imbalances, in particular between petrol and diesel”, explained European Commissioner for Economy Paolo Gentiloni in a statement.
“Second, we must look at how to use taxation to promote renewable energy and increased energy efficiency. And third, we must review the treatment of electricity and natural gas products and streamline the current wide range of reductions, exemptions and subsidies for fossil fuels”, he continued.
The Commission had already proposed in 2011 amending the scope and structure of the Directive in order to introduce taxation based on CO2 emissions and the energy content of the different fuels covered. However, no political agreement could be reached (see EUROPE 11177/4) and the Commission then decided to withdraw its proposal in 2015.
In EU Council conclusions adopted on 5 December 2019, the EU Finance Ministers again expressed their support for a review and formulated their expectations (see EUROPE 12384/26).
Indeed, the Commission's inception impact assessment states that, as requested by Ministers, the economic impact will be carefully assessed as well as the social and environmental costs and benefits of the review for competitiveness, connectivity, employment and sustainable growth, in particular for those sectors most exposed to international competitiveness.
Stakeholders have until 1 April to comment on the Commission's inception impact assessment, at https://bit.ly/38mcFEJ (Original version in French by Marion Fontana)