Luxembourg, 05/06/2002 (Agence Europe) - President of the Council, Rodrigo Rato, explained that the ECOFIN discussions on Tuesday in Luxembourg had focused on energy tax and confirmed the strong disagreements on the matter. He hoped that high-level group discussions on energy taxation, requested at the last ECOFIN Council (see EUROPE May 8 page 8) will sufficiently allow for the opening up of a political agreement at Seville. During the final ECOFIN Council preceding the summit, the high-level group is expected to present a report on the draft guidelines that will direct the follow-up to the debates.
Differences also exist on the transition period of ten years granted to Portugal, Greece and Luxembourg, which Germany and the Netherlands oppose. Several Member States are stressing the difficulties that such an exemption could provoke during enlargement negotiations.
Neither is there an agreement on the dispensation for diesel fuel, requested by Spain and France. The Presidency compromise, which opens the way to an extension of dispensations beyond 2004, has provoked hostility from most delegations and the European Commission, which has to present a proposal harmonising rates of duty on diesel fuel. The new French Finance Minister, Francis Mer, pointed out that dispensation on professional diesel fuel, granted under the "friendly pressure" of lorry drivers, would have to end one day.
Several delegations as well as the Commission were also reticent about the idea of exempting mineralogical industries (cement, lime, ceramics, glass) from the minimum rate imposed on industries with high energy use. In the strength of his experience at the head of Arcelor, the leading world steel company, Franics Mer considered that even the approach of the directive is wrong. This, it appears, cast a chill over the Council where the text has been on the table since 1997. "I have the impression that we are losing our sense of direction in these discussions where compromises are being made all over the place to be able to reach an agreement", he told the press. "Increasing the price of energy to encourage industry to reduce its energy consumption is an approach I find rather simplistic", he continued, saying that "the matter should be gone into in still greater depth".
Noting the lack of an agreement on the compromise on energy taxation, the United Kingdom called for adoption of the agreement on the "biofuels" directive to be postponed. This text, which harmonises excise rates for "green fuels" should in principle be adopted on Tuesday, without debate. The decision will depend at present on the result of the debates at the Energy Council, on Friday in Luxembourg, concerning the directive fixing objectives for the introduction of biofuels.
The European Environment Bureau (EEB) called on ministers to give a stance on this text as soon as possible, and deplored the fact that the compromise text provides for far too many exemptions. In a press release, it mainly cites the case of the list of high energy using industries that would be dispensed "whereas households and public administrations will be able to benefit from total exemption if the Member States so wish, and a reduced rate for professional diesel fuel is on the table". Stressing that "the difficulties of the road sector come from causes other than the price of fuel", EEB Secretary General John Hontalez said it is "'fundamental for an agreement to be found on new rates immediately, without dispensation for professional diesel fuel".