The Danish Presidency of the Council of the EU will be proposing that Member States should be able to decide to include hydrogen and low-carbon synthetic fuels of non-fossil origin in category 3 of renewable fuels in energy taxation, on Friday 26 September, at the meeting of the Working Party on Tax Questions.
According to the compromise proposal obtained by Agence Europe, “some delegations requested that the amendment concerning non-fossil low-carbon hydrogen be reflected in Annex II, which lists commonly used energy products”. “However, we believe that it should not be included, as it is an option for Member States and not an integral part of the categories as such”, said the Presidency.
The definition of ‘non-fossil low-carbon hydrogen’ will also be amended as follows : “Hydrogen whose energy content is derived from non-fossil, non-renewable sources, which meets the 70% greenhouse gas emission reduction threshold, in accordance with the methodologies for assessing greenhouse gas emission savings from low-carbon fuels”.
Category 3 also includes advanced and intermediate biofuels, bioliquids and biogas. Denmark is going to suggest merging the definitions of advanced biofuels, bioliquids and biogas with those of intermediate biofuels, bioliquids and biogas, as these products belong to the same category. “This amendment was requested by several delegations, because they felt that it was superfluous to have a separate definition for advanced biofuels and intermediate biofuels, given that they would not be treated separately”.
Exemptions for taxis and agricultural, horticultural, aquacultural and forestry work. In addition, at the meeting of the Working Party on Tax Questions on Friday 5 September, discussions took place on the basis of the net calorific value of energy products, which is used to calculate taxation, in euros per gigajoule (EUR/GJ). These values are based on Annex II, but the compromise adds the possibility of taking as a reference other standard values recognised by the Member State.
Denmark has added the possibility for Member States to apply reductions in the level of taxation of energy products and electricity used for taxis. “Several delegations stressed the importance of Member States being able to apply a lower tax rate for taxis than for private road transport”. Similarly, it is proposed that Member States should be able to apply total or partial exemptions or reductions in the level of taxation to energy products and electricity used for agricultural, horticultural or aquacultural works and forestry until 31 December 2037.
Finally, the Presidency has deleted the definition of the terms ‘distributor’ and ‘redistributor’ from the compromise proposal, as several delegations expressed various concerns, which gave the impression that these definitions did not provide the desired clarity.
Read the compromise proposal: https://aeur.eu/f/im3 (Original version in French by Anne Damiani)