The European finance ministers will hold a policy debate on the Energy Taxation Directive on Tuesday 10 December. The Member States are currently very divided over the exemption for the aviation sector, proposed in October by the Hungarian Presidency of the EU Council (see EUROPE 13525/19).
According to the Presidency’s note, it will ask the ministers whether they think that the revision of this text is going in “the right direction for striking a balance between the climate ambition and the specificities of the Member States, as well as the competitiveness of the EU”. According to a European diplomatic source contacted by Agence Europe on Wednesday 4 December, this question has been modified at the request of certain Member States to make it more closed.
The initial question was whether ministers supported the proposal to extend the energy tax exemptions for aviation and the maritime sector and to add a revision clause in 2035 (see EUROPE 13507/17). The countries most supportive of this measure are Cyprus, Malta, Greece and, to a lesser extent, Ireland. In the opinion of this source, these countries are particularly favourable because of their insularity.
On the contrary, other States are vehemently opposed to it and regret that “the level of ambition decreased significantly concerning this issue”, according to the document. According to this source, the Netherlands and France in particular are refusing this proposal. Another European source contacted said France insisted on the importance of technical work during the latest working groups.
In its memo, Hungary stressed that “in light of the mandatory requirements contained in the already agreed legislation on Refuel Aviation and FuelEU Maritime, in 10 years the situation of available SAFs (Sustainable Aviation Fuels) could be significantly different”.
It also notes that some delegations would prefer agriculture to be fully exempt and commercial fuels to be subject to a tax reduction. At the same time, the majority of delegations would prefer not to include these exemptions or reductions in the directive. What’s more, the current text already contains a large number of exemptions and reductions. Although the initial aim of revising the Directive was to reduce the number of tax exemptions and reductions, the delegations recognise that Member States have different specificities and priorities.
Furthermore, most delegations are in favour of indexation, as its purpose is to prevent minimum tax levels from being devalued. However, there are some who would prefer to discuss indexation with a lower maximum percentage or cannot support it in its current form.
Finally, “some delegations were not yet completely satisfied with the question of scope concerning some products, such as waste, mineralogical processes and peat”. However, it would appear that most delegations would like to have these products be included in the scope.
To read the document: https://aeur.eu/f/emy (Original version in French by Anne Damiani)