Strasbourg, 13/03/2007 (Agence Europe) - After a “long, very lively but constructive debate”, the Commission adopted a draft directive aimed at reducing greenhouse gas emissions, Laszlo Kovacs, Commissioner for Taxation and Customs Union, told the press on Tuesday 13 March. Road transport largely contributes to these emissions, he added, mainly because hauliers think nothing of making large detours to fill up their tanks in member states where taxation is lower. Suggesting that the minimum excise duties for fuel, which currently represent “6-8% of the cost of road transport” according to Mr Kovacs, should be raised, the Commission hopes to combat “petrol pump tourism”. The minimum rate of taxation for commercial diesel fuel would be fixed at €359 for 1,000 litres of fuel from 2012, then at €380 from 2014 (see EUROPE 9359). Currently, this rate is €302 and will rise to €330 in 2010. Requiring Council unanimity, the draft directive will amend Directive 2003/96/EC on the taxation of energy products.
The Commission's arguments are not only environmental. They also pertain to the economy. It is appropriate to “create an equal situation for all in the single market”, Mr Kovacs said, noting “competition distortion” to the advantage of operators close to member states where taxation is the lowest. Increasing the minimum excise rate for diesel to €359 would also be tantamount to taxing this fuel at the same level as unleaded petrol, as, according to Mr Kovacs, the “current difference between diesel and unleaded petrol is not justified”.
The Commission also promises member states greater flexibility compared to the current situation. Those who wish to do so may reduce their levels of taxation below the rate in force on 1 January 2003, such flexibility not being authorised by Directive 2003/96/EC. In this case, two conditions are necessary: that of respecting the minimum rate of the future directive and that of maintaining the general level of taxation at a stable level, for example through the introduction of road charges. Mr Kovacs cited the example of Germany, whose minimum excise rate for diesel fuel is currently €439, and which will have the possibility of reducing its duty while keeping it above €359 after 2012 and €380 after 2014. Stressing the fact that the “overall tax charge should be maintained for environmental reasons”, the Commissioner pointed out that road charges such as “tolls” should offset the fact that the clause banning the fall in excise duties for fuel to a level lower than the 2003 level has been withdrawn.
The introduction of minimum taxation levels on commercial diesel will be gradual. It will depend on the transition measures negotiated by 11 member states as part of directive 2003/96/EC. Austria, Belgium, Spain, Greece, Luxemburg, Poland and Portugal have until 1 January 2012 to move to a minimum level of €330 and they have been authorised to raise these levels to €359 and €380 at the start of 2014 and 2016 respectively. Latvia and Lithuania have until 1 January 2013 to move to a minimum level of €330 and until the start of 2015 and 2017 to get to the objectives set out in the draft directive. For Bulgaria and Romania, the timescale for the introduction of the €330 minimum level is the same as for Latvia, but these two countries will only be required to introduce the €359 and €380 levels in 2016 and 2018 respectively.
When asked if he thought he enjoyed the support of the Council, Mr Kovacs said that if he had to be 100% certain when making a proposal, he would never do anything. He remained hopeful that there would be unanimous approval. He felt his legislative proposal had more chance of success than a previous proposal to harmonise excise duties (see EUROPE 8261). The 2002 proposal was retracted because the Ecofin Council felt it was too ambitious, he said: this time duties would not be harmonised, but brought closer together. Protecting the environment, after the European Spring Council set ambitious targets for the reduction in greenhouse gases (see EUROPE 9383), was, he felt, a second reason why a more favourable attitude towards this proposal could be detected. Finally, Mr Kovacs refuted the argument that the poorest member states, such as Bulgaria and Romania, should not be subject to such high excise duties. In the EU, he said, there were rules, and it could not be argued that (some rules should only apply to rich countries, mentioning another thorny issue, the minimum excise levels on alcoholic drinks (see EUROPE 9316). (mb)