As announced in its programme (see EUROPE 13092/9), the Swedish Presidency of the EU Council is making progress on energy taxation (ETD) and has prepared a proposal for the Working Party on Tax Questions which EUROPE has been able to obtain.
The Presidency proposes to tax natural gas and liquefied petroleum gas (LPG) differently. In order not to favour natural gas, Sweden has submitted the idea of treating sustainable biofuels/bioliquids/biogas used for food and feed production facilities differently.
Under this solution, Member States could apply lower taxation during the transitional period to none, one or both categories of energy products. With this alternative, taxation during the transitional period would be more in line with how biofuels are treated under the EU Emissions Trading System (ETS).
In the previous Swedish compromise text, it was proposed to extend taxation based on business and non-business use of electricity to natural gas used as heating fuel.
This idea was welcomed by the delegations, the Presidency reported. However, a further widening to heating fuels in general has been suggested in order to treat all heating fuels in the same way.
“It is not justified to give natural gas favourable treatment compared to, for example, LPG, biogas or fuel oil”, the Presidency said.
According to the paper, some delegations also questioned the limitation to oil or oil-containing products, as other products can also be used as heating fuels and the oil content may be difficult to determine in practice.
On the issue of hydrogen, the Presidency suggested including fuel in stationary fuel cells in order to fully include hydrogen in the scope of the ETD. “This would make the scope more coherent and would also ensure that the production of hydrogen is always regarded as production of an energy product“, it said.
At the December Ecofin Council, ministers from the island states had expressed their concerns about their geographical specificity (see EUROPE 13078/4). For the Presidency, the notion of ‘Island Member State’ needs to be defined more precisely, as it can include not only countries whose entire territory is an island - such as Cyprus, Malta and Ireland - but also countries that include islands - such as Germany, Denmark, Sweden, Estonia, Finland, the Netherlands, Italy, France, Greece, Spain, Portugal, Croatia and Poland.
Sweden also wants input from delegations to clarify the derogation for fuel used for flights to island Member States. It wants to clarify as well the temporary derogation for fuel used for flights to the outermost regions.
To consult the document: https://aeur.eu/f/592 (Original version in French by Anne Damiani)