The European Finance Ministers debated the Energy Taxation Directive on Tuesday 10 December (see EUROPE 13538/17). While many feel that the latest compromise proposal reflects a certain balance, others are totally opposed to it.
Air and maritime sectors. The exemption of the aviation and maritime sectors and the related 2035 review clause, proposed in October by the Hungarian Presidency of the EU Council (see EUROPE 13525/19), were one of the main sticking points.
On the one hand, island countries such as Ireland, Cyprus, Greece and Malta, which support this exemption, have insisted on the need to take account of their specific geographical characteristics. Konstantinos Hatzidakis, the Greek Minister, stressed the impact that taxing these modes of transport could have on the tourism sector, on which his country’s economy is heavily dependent. “This specific proposal [...] may undermine the competitiveness of Greek tourism compared with third countries in the Mediterranean, where costs would not be increased because no additional tax would be imposed”, he defended. However, he qualified his statement by saying that the potential extension of the deadline for the revision clause should be re-examined “in the light of the evolutions of the availability of alternative fuels for aviation (AFA)”.
His Maltese counterpart, Clyde Caruana, was even more categorical: “there isn’t enough appreciation of the difficulties that a small island at the periphery of Europe faces”. “It’s not about tourism or any particular sector, the economy is important for us, but for us it’s more than that, it’s a question of basic accessibility”, he maintained.
On the other hand, the European Commission, Estonia, the Netherlands, France and, to a lesser extent, Belgium regretted that the text’s ambition had been scaled back. “[The exemption] would prevent us from reaching the goals that we have set ourselves in the recent years, and it risks undermining the balance of the text”, said Antoine Armand of France. “This would block all Member States from taxing aviation and from concluding multilateral agreements with countries outside the EU to tax fuels”, added Eelco Heinen from the Netherlands.
“Doing nothing is not an option. Maintaining the status quo would damage both our climate objectives and the EU’s image”, tempered Belgian Vincent Van Peteghem. In the middle,other Ministers also showed their support for the proposal in order to reach a compromise, such as Denmark, Italy, Sweden, Slovakia, Lithuania, Germany, Bulgaria, Austria, Portugal, Spain and Latvia. They considered that this text was an improvement on current legislation.
The German Minister, Jörg Kukies, was in favour of harmonised taxation on airline tickets at EU level, which is already in place in his country. In his view, it is “a way of avoiding all the pitfalls and setbacks of carbon leakage and the displacement of aviation to Middle East connection points or additional connection points outside the EU”.
Agriculture. For their part, Germany, the Czech Republic and Luxembourg defended the tax exemption for agriculture and the tax reduction for commercial fuels. “We should also reconsider removing the possibility of exemptions in the agri-food sector”, said the Czech Minister, Zbyněk Stanjura. For Gilles Rothe from Luxembourg, it is “crucial for food security and sustainability”.
In the Presidency’s preparatory note for the debate, it is stated that the majority of delegations would prefer not to include these exemptions or reductions in the Directive. “The current text already contains a number of exemptions and reductions”, it says. Although the initial aim of revising the Directive was to reduce the number of tax exemptions and reductions, the delegations recognised that Member States have different specificities and priorities.
Discussions will continue under the Polish Presidency, which begins on Wednesday 1 January. (Original version in French by Anne Damiani)