Brussels, 03/05/2002 (Agence Europe) - The Spanish Presidency hopes to make the debate move forward during the Ecofin Council on Tuesday on the directive on taxation of energy, proposed in 1997 by the European Commission. It also hopes to determine the main policy guidelines at the end of the same term of office. The Barcelona Summit had requested that, "in parallel with the opening of the energy markets, an agreement on the adoption of the directive on taxation of energy should be found before December 2002, bearing in mind the needs of the road transport industry".
The Presidency, which was unable to reach an agreement on a text of conclusions during the meeting of the Permanent Representatives on Thursday (see yesterday's EUROPE, p.7), expects there to be a "very lively" discussion during the Council, on Tuesday.
The Presidency has noted that in order to make progress in this area, commented a Spanish diplomat, they have to work on the basis of political guidelines and determine a negotiating package for the different aspects of the issue. Political guidelines would need to be found to strike a balance between the aims of the various Member States on the seven or eight issues at stake. The guidelines should also stipulate whether there can be any permanent exemptions from an energy tax, like exceptions rooted in tradition or for domestic fuel in the UK and Ireland points out the same source. At the Permanent Representatives' discussions, France called for a date to be set for the end of exemptions, but this was obviously opposed by the UK and Ireland . One big problem is establishing a different level of taxation for certain areas of production, noted the Spanish diplomat, since industries like metal, cement, ceramics and glass compete on the construction end-user market.
The package will also outline the minimum tax for products not subject to duty, like natural gas, coal and electricity, and the minimum tax on oil products, that currently come under the mineral oil excise directive. At the moment, Sweden, Denmark and Portugal are calling for the latter types of energy to be taxed in the same way. France is refusing to commit itself over professional diesel taxation until the Commission publishes its proposal to harmonise professional diesel taxation, expected in the summer (see EUROPE of 17 April, p.12). A Spanish diplomat said that for four or five delegations, including Spain, the issue of professional diesel will be a vital part of any compromise on energy tax. The fact that the Commission will be putting forward proposals should not clash with a general compromise on energy taxation, commented the diplomat.
Biofuel taxation is also tangled up with the current Energy Council negotiations to introduce a green fuel quota for the total volume of petrol and diesel, a quota of 2% in 2005 and 6% in 2009. A Spanish diplomat said that while there is a desire to extend biofuel to reduce energy dependence, it is also clear that most Member States oppose any compulsory quota, adding that they would have to see what happened at the 6 June Energy Council. In the COREPER discussions over energy tax, Belgium, Portugal, Denmark, Sweden, the UK, the Netherlands and Finland opposed the ideas on biofuel put forward in the Presidency document. A Spanish diplomat commented that this reflected the complex nature of the issue that affects all areas of the economy.