of this page:
and Fitness Check Roadmap of the Energy Taxation Directive (ETD), August
Taxation Directive 2013 and New Revision Work in 2014 Read
rules on Energy Taxation, April 2011 Read
of the Energy Tax Directive 2003/96/EC,
March 2010 Read
Resolution on MBI, April 2008 Read
Conclusions, March 2008 Read
Council’s “New Impetus on EU Environmental Policy”, June 2007 Read
Paper on Market Based Instruments (MBI) for Environmental Purposes
(COM(2007)140final), March 2007 Read
EU Commission Reviews the Derogations Allowed by Energy Tax
(COM(2006)342 final), June 2006 Read.
on the Impact of Energy Taxation, July 2005 Read
Tax Directive 2003/96/EC, October 2003 Read
the use of Alternative Fuels through the Energy Tax Directive,
Article 16 by 2010, November 2001-03 Read
and Fitness Check Roadmap of the Energy Taxation Directive (ETD),
The Energy Taxation Directive 2003/96/EC (ETD) has not been reviewed
since 2003, and needs updating and adapting to current circumstances.
In 2011, the European Commission (EC) proposed an amendment of the ETD
(COM, 2011-169). However, the proposal was finally withdrawn by the EC
in March, 2015.
Read more about the
proposal and its withdrawal here.
In August 2017, the
European Commission has adopted an Evaluation and Fitness Check Roadmap
on the evaluation of the ETD with a planned completion
date in 2018.
According to the
EC; "the evaluation will focus
on identifying the possibilities for simplifying the legislative
act, for reducing regulatory burdens and on identifying and calculating
benefits and savings from the enforcement of the Directive".
Read more about the
roadmap here (pdf).
Energy Taxation Directive 2013 Adoption and New Revision in 2014
In June 2014, the
EU countries continue to discuss a revision of the Energy Taxation
Directive, and have not reached an agreement yet.
2003, the Energy Taxation Directive was adopted. It was designed
primarily to avoid competitive distortions in the energy sector within
As it does not address the EUís
higher ambitions in energy and climate change policies, the discussion
started to revise it.
On 20 April 2012 the
European Parliament, with a majority of votes including the EU conservatives,
has voted against the draft Energy Taxation Directive
stating that this is not a good moment to increment
energy taxes, since it is a time of economic austerity and high
of the European Parliament is not binding, it's now up to the EU countries
to decide if they will follow the Parliament or the proposal from the
Rules on Energy Taxation
On 13 April 2011 the
European Commission presented a proposal to renovate the rules on
taxation of energy products in the EU. The new rules pretend to reflect
in the taxes on energy products its CO2 emissions
and energy content.
With this measure,
the Commission wants to promote energy efficiency and a more environmentally
consumption as well as to boost the market of alternative energies
by removing unjustified subsidies to certain energy products (as diesel
giving a consistent treatment to all sources of energy. It will also
avoid distortions of competition in the EU market.
The new minimum taxes would be introduced in stages until 2018. Tax
for diesel and kerosene would increase to a higher per-volume
rate than petrol
and energy content are higher per volume in those). Minimum taxes
on LPG and natural gas would increase in a factor
of four, and biofuels
would be also taxed though there won't be a CO2 tax
for sustainable fuels because its emission factor is zero.
Fuels used to generate
electricity would be mostly exempted from CO2 tax
because they are subject to ETS. But CO2 tax would be applied in small
by nuclear energy would be now taxed as all other electricity, with
no CO2 tax
because it does not produce CO2.
Regarding to business,
the Member States would retain flexibility to apply reduced taxes for
certain businesses but above the Community minima. Taxes below minima
could apply just for sectors under risk of carbon leakage.
Read this presentation from the European Commission for more information and find out here
for the new Council Directive.
To recalculate the
existing energy taxes they must be split into two components to determine
the new tax. In this way higher values are done to fuels with higher
CO2 emissions and lower energy content.
For detailed information
about the how the taxes are calculated see this presentation of
Ideas for Revision of the Energy Tax Directive
On 10 March 2010,
the European Commission announced a plan of an EU-wide
is looking at reviving
the idea of revising the 2003 Energy Taxation Directive,
to bring energy taxation into line with the EU’s 2020 objectives
(reducing greenhouse gas emissions by 20% by the year 2020, when compared
to 1990 levels).
A minimum carbon tax would be introduced through an amendment to the
EU's Energy Tax Directive. The directive, originally adopted in 1992,
as part of the EU's efforts to build the internal market, sets
for energy sources such as petrol, coal, and natural gas when they are
used as motor and heating fuel or to produce electricity.
Background: The existing Energy
Tax Directive 2003/96/EC, started as an internal market harmonization
minimum tax rates were
introduced for oil fuels (excluding international aviation
and shipping). Coal and electricity minimum tax rates were introduced
but at extremely low levels.
Under the current
regulation, the tax to be paid is calculated according to the quantity
of fuel that is consumed. The Commission is interested in
this taxation method, to calculate it according to carbon dioxide (CO2)
emissions and the energy content of the fuel that is consumed. Fuels
with high CO2 emissions and low energy content
would be taxed most heavily.
A previous Commission proposal was drafted
in 2009, but was held back and not formally presented to the Council,
due to concerns that it would cause political wrangling and distract
from the ratification of the EU’s new Lisbon Treaty. The new
Commission is now reportedly finalizing an impact assessment which
will consider and revise the draft proposal for the revision of the
Energy Taxation Directive prepared by the previous Commission.
The EU’s 2009 draft proposal
to amend the Energy Taxation Directive planned to set a minimum carbon
tax to be imposed by Member States. Compared to the existing
Directive provided important environmental tax
- It introduced a CO2 tax quite distinct
from the general energy tax to reduce CO2 emissions
switch to more energy efficient fuels and/or technologies for energy
- It changed the tax base of the latter from the metric unit
of 1000 liter to the energy unit of Gigajoule, thereby relating
it to the calorific ( = energy content) content of each fuel.
- It introduced minimum levels of taxation (€10 per tonne of CO2 emitted)
on different types of fuels linked to the intensity of their emissions,
to be effective from 2013.
The aims of the draft proposal were to reduce emissions and influence consumer
behavior, educating them to select low-energy products and to
give a big push to the use of renewable energy sources (RES). The
main areas to be covered by the 2009 draft proposal were transport, agriculture,
and installations not covered by the EU’s emission trading scheme.
Resolution on the Green Paper on Market-Based Instruments for Environment
and Related Policy Purposes
the 24th of April 2008, the European Parliament adopted an own
initiative report on the Green Paper on market-based instruments
(MBI). The EU Parliament urges the Commission to adopt a clear
strategy on MBI to price environmental damages. It also asks
for the suppression of Environmentally Harmful Subsidies (EHS),
who undermines the polluter pays principle, and suggests new
measures such as a carbon tax and a kerosene tax and NOx emissions
charges for airplanes. About Emissions Trading Scheme (ETS),
the EU Parliament calls the Commission to establish a progressive
tightening cap with quantitative limits and qualitative requirements
and to base the EU-ETS on auctioning. It concludes by calling
the European Commission and Member States to study the possibility
to measure European growth using “green” indicators.
the resolution on the European
Parliament's web site.
13-14 March 2008
In its conclusions,
the European Council stated that a review of the Energy Taxation Directive
is needed to make it fitted more with the EU energy and climate’s
objectives. The European Council also invited the Commission to publish
its proposals on reduced VAT rates.
Read the European Council’s conclusions on the EU
Council's web site (pdf
Published a Draft “New Impetus on EU environmental policy”
the 21 June 2007, the Council of the European Union published its draft
conclusions on “A New Impetus for EU environmental policy”.
The Council highlights the fact that market-based instruments can provide
positive incentives. In addition, it stresses the fact that internalization
of environmental costs are vital and it encourages Member States and
the EU Commission to think about possibilities to shift the tax burden
from labour to energy production and consumption and pollution.
The Council also reminds that the Commission is supposed to publish a roadmap
about the reform of subsidies in 2008. These conclusions have been adopted
by Environment Ministers on the 28th of June 2007.
Read the conclusions of the EU Council on the EU
Council's web site (pdf
Read the press release about the Environment Ministers Council (28.06.2007)
on the EU
Council's web site (pdf
Green Paper on
Market-Based Instruments for Environment and Related Policy Purposes.
28 March 2007. COM (2007) 140 final
In 2007 the European Commission launched a debate on how taxes, tradable emission
rights and other instruments can be better used to fulfil the EU environmental
and energy objectives. It did this with a Green Paper COM(2007)140. The paper
tackles different issues such as:
- How to make the Energy taxation directive more supportive of the EU environmental
and energy policies?
- How can the EU abolish environmentally harmful subsidies?
- How can the use of market-based instruments be combined with the EU emissions-trading
The Commission also suggests the creation of a forum that could encourage and
facilitate exchange of best practices between member states. It concludes that
the use of market-based instruments should be increased both at the European
and national levels.
The Green Paper launched a consultation closed on 31 July 2007.
the Green Paper on the European
Commission's web site.
the Commission on the Review of the Derogations Allowed by the Directive
2003/96/EC. (COM (2006) 342 final)
In 2006, the EU Commission review
the derogations (national reduced tax rates and tax exemptions)
Download the full text of the communication on the EU
Law web site (pdf
of Energy Taxation in the Enlarged European Union” 11 July
external study carried out for the European Commission has two objectives:
- to analyze how the implementation of the energy taxation directive will
affect the EU and its member states
- to analyze how energy taxation can contribute to climate policy in the
Results show that a common EU carbon tax would be the most efficient way
to reach the EU climate policy objectives. However an EU carbon tax would
harm competitiveness in some energy-intensive sectors.
Read the study on the European
Commission's web site (pdf
on Taxation of Energy Products and Electricity (2003/96/EC)
Content and Background
The EU Commission proposed already in 1997 this directive for minimum
levels of fossil fuel taxation, but the countries were only able to
agree in March 2003 because of continued resistance
from a few countries such as Spain and in the last phase Italy. Like
any other tax proposal, it required consensus to be adopted.
The directive sets the minimum
tax levels on fossil fuels for the coming 10 years, starting in 2004;
but many countries have specific exemptions
for up to 5 years. It broadens the scope of EU energy-tax rates to cover
coal, gas, and electricity. Its effect is small, because most countries
already have higher rates than the minimums.
The below table
gives an overview of the new minimum tax levels:
|New EU minimum taxes Rate, 2004
||Increase from 1992 directive
|Diesel-petrol* for transport
|Natural gas -LPG for transport
|Natural & coal for
|Fuel oil –heating
|LPG & Kerosene for
Unleaded petrol; leaded petrol is 17% higher.
** Rate in brackets are for business purposes; for natural gas, the low
business-rate only applies for heating.
2003 the Economic and Finance Ministers (ECO-FIN Council) agreed
to the new directive. The agreement waters down the proposal to
be little more than a regulation for inflation of the energy tax
rates introduced in 1992.
NGOs including EEB and Friends of the Earth have campaigned for this
directive, but they criticized the result for being
too weak to make a meaningful contribution to sustainable development.
is not sufficient to motivate significant reductions of CO2 emissions.
Thus, the European Environmental Bureau (EEB) continues its campaign
for a fiscal reform (see www.ecotax.info).
Read the text of the Directive on the EU
Law web site.
Read also more
about the directive Minimum Taxation of Energy
Products, COM(97)0030 on: www.eeb.org, www.foeeurope.org and www.europa.eu
use of Alternative Fuels through the Energy Tax Directive
In November 2001, the European
Commission incorporated the 2003/96/EC Directive, mainly within Article
16 to an Action Plan and two proposals for Directives to foster the
use of alternative fuels for transport, starting with the regulatory
and fiscal promotion of biofuels. The Directive provides Member States
the option of applying a reduced rate of excise duty to pure or blended
biofuels, when used as heating or motor fuel. This Directive was
proposed with another one, which was adopted on 8 May 2003, the Directive
2003/30/EC. The objective of that Directive is the promotion of the
use of biofuels or other renewable fuels for transport purposes.
Member States must ensure that the minimum share of biofuels sold
on their markets is 2% by 31 December 2005 at the latest, and 5.75%
by December 2010.
Read more at the European
Commission about energy products.
to EU Policy