Despite the “inevitable impact on the European economy” of “Putin’s senseless war”, EU Economy Commissioner Paolo Gentiloni said that “in compliance with the objectives of the EU Green Deal , a sunset clause stipulates that Member States have to phase out reduced rates on fossil fuels by 2030”, in a letter to EU finance ministers on Monday 25 April.
“Exceptionally, the EU Council may also authorise a Member State to go even below the minimum taxation rates, for specific policy considerations and on a temporary basis”, he continued.
In his letter, Mr Gentiloni stressed that the European Commission was “well aware of the need to cushion the impact of high energy prices on households and businesses, in particular the most vulnerable ones, while also avoiding supply disruptions”. However, he insisted that the Commission “does not envisage for the moment further revisions of the EU taxation framework to respond to the current crisis”, although he had not ruled out such a possibility at the end of March (see EUROPE 12920/5).
While mentioning the recent adoption of the new VAT directive (see EUROPE 12924/18), Mr Gentiloni referred to the discussions currently taking place in the EU Council on the new energy taxation directive, “where the objective is to align the taxation of energy products with EU energy and climate policies by favouring clean technologies over fossil fuels”, (see EUROPE 12762/9).
The European Commissioner gave assurances that his services remained at the disposal of those Member States that need clarification of the legal framework. He concluded his letter by stressing three “relevant political considerations [that] should guide our action”: “effectiveness, consistency and equity”.
See Mr Gentiloni’s letter: https://aeur.eu/f/1ct (Original version in French by Anne Damiani)