Energy Taxation Directive

Last updated

Directive 2003/96/EC
European Union directive
Flag of Europe.svg
TitleCouncil Directive 2003/96/EC of 27 October 2003, restructuring the Community framework for the taxation of energy products and electricity
Made by Council
Made under Treaty of Rome, especially Article 93
Journal reference L283, 31 October 2003, pp. 51–70
History
Date made27 October 2003
Came into force31 October 2003
Implementation date31 December 2003
Current legislation

The Energy Taxation Directive or ETD [1] (2003/96/EC) [2] is a European directive, which establishes the framework conditions of the European Union for the taxation of electricity, motor and aviation fuels and most heating fuels. The directive is part of European Union energy law; its core component is the setting of minimum tax rates for all Member States.

Contents

Purpose and scope

The directive is intended to ensure the functionality of the EU internal energy market and to avoid distortions of competition through different tax systems. In addition, it should also contribute to a low-carbon, energy-efficient economy, that is, to exert a steering effect with the aim of protecting the environment and the climate. [3]

For this purpose, it sets EU-wide minimum tax amounts for electricity and for fuels when they are used as motor fuel, aviation fuel or heating fuel. The minimum tax amounts vary according to the type of fuel (petrol, kerosene, gas oil, liquid and natural gas) and their use. When used as a heating fuel or when used in, for example, stationary engines, agriculture or construction machinery for public works, lower minimum amounts apply than when used as motor fuel. The Member States have extensive freedom in the design of taxes, the directive only requires that the indirect taxes reach the minimum amounts without value-added tax (VAT). [3]

There are a number of exceptions to the directive: [3]

Member States are mandated to largely exempt commercial aviation and commercial shipping in the European Community's marine waters (referred to as 'air navigation and sea navigation'), but Member States are allowed to limit these exemptions (Preamble §23). For example, Member States are prevented from levying jet fuel tax, except on domestic flights and or with a bilateral agreement between member states (Article 14(1)(b) and (2)). No such agreements exist. [4] : 4 

Development

The directive replaced Directive 92/81/EEC [5] and Directive 92/82/EEC [6] – which only harmonised mineral oil taxes – after ten years of negotiations. [7] European primary law, [8] which is the legal basis for the directive, [9] requires a unanimous decision of the European Council for tax law requirements. Unanimous decisions are also required for changes to the directive. When they were introduced in 2004, the tax rates in most countries were above the minimum tax amounts. In 2008, the Council asked the Commission to come up with proposals on how to better align the Directive with the energy and climate targets of the European Union. The Commission concluded in 2011 that the directive was unsustainable and that it provided the wrong incentives. [10] It proposed an amendment that would have set the minimum rates based on energy content and CO2 emissions. However, the proposal met with opposition from Luxembourg, Poland and, according to internal voices, Germany as well. In 2015 the Commission removed the proposal from its work programme. [11]

According to the March 2020 feedback report of Transport and Environment, 'the Energy Taxation Directive (ETD) has not been reviewed since 2003, and needs updating if the European Commission is serious about deploying its European Green Deal.' [1] It is said to be revised in 2021. [12]

See also

Related Research Articles

<span class="mw-page-title-main">European Union energy label</span> Energy consumption labelling scheme

EU Directive 92/75/EC (1992) established an energy consumption labelling scheme. The directive was implemented by several other directives thus most white goods, light bulb packaging and cars must have an EU Energy Label clearly displayed when offered for sale or rent. The energy efficiency of the appliance is rated in terms of a set of energy efficiency classes from A to G on the label, A being the most energy efficient, G the least efficient. The labels also give other useful information to the customer as they choose between various models. The information should also be given in catalogues and included by internet retailers on their websites.

<span class="mw-page-title-main">Renewable energy in the European Union</span>

Renewable energy plays an important and growing role in the energy system of the European Union. The Europe 2020 strategy included a target of reaching 20% of gross final energy consumption from renewable sources by 2020, and at least 32% by 2030. The EU27 reached 22% in 2020 and 23% in 2022, up from 9.6% in 2004. These figures are based on energy use in all its forms across all three main sectors, the heating and cooling sector, the electricity sector, and the transport sector.

Government procurement or public procurement is undertaken by the public authorities of the European Union (EU) and its member states in order to award contracts for public works and for the purchase of goods and services in accordance with principles derived from the Treaties of the European Union. Such procurement represents 13.6% of EU GDP as of 2018, and has been the subject of increasing European regulation since the 1970s because of its importance to the European single market.

<span class="mw-page-title-main">Directive 2003/30/EC</span> EU directive promoting biofuel usage

Directive 2003/30/EC was a European Union directive for promoting the use of biofuels for EU transport. The directive entered into force in May 2003, and stipulated that national measures must be taken by countries across the EU aiming at replacing 5.75% of all transport fossil fuels with biofuels by 2010. The directive also called for an intermediate target of 2% by 31 December 2005. The target of 5.75% was to be met by 31 December 2010. These percentages were to be calculated on the basis of energy content of the fuel and were to apply to petrol and diesel fuel for transport purposes placed on the markets of member states. Member states were encouraged to take on national "indicative" targets in conformity with the overall target.

<span class="mw-page-title-main">Energy policy of the European Union</span> Legislation in the area of energetics in the European Union

The energy policy of the European Union focuses on energy security, sustainability, and integrating the energy markets of member states. An increasingly important part of it is climate policy. A key energy policy adopted in 2009 is the 20/20/20 objectives, binding for all EU Member States. The target involved increasing the share of renewable energy in its final energy use to 20%, reduce greenhouse gases by 20% and increase energy efficiency by 20%. After this target was met, new targets for 2030 were set at a 55% reduction of greenhouse gas emissions by 2030 as part of the European Green Deal. After the Russian invasion of Ukraine, the EU's energy policy turned more towards energy security in their REPowerEU policy package, which boosts both renewable deployment and fossil fuel infrastructure for alternative suppliers.

Taxation in Greece is based on the direct and indirect systems. The total tax revenue in 2017 was €47.56 billion from which €20.62 billion came from direct taxes and €26.94 billion from indirect taxes. The total tax revenue represented 39.4% of GDP in 2017. Taxes in Greece are collected by the Independent Authority for Public Revenue.

<span class="mw-page-title-main">European units of measurement directives</span>

As of 2009, the European Union had issued two units of measurement directives. In 1971, it issued Directive 71/354/EEC, which required EU member states to standardise on the International System of Units (SI) rather than use a variety of CGS and MKS units then in use. The second, which replaced the first, was Directive 80/181/EEC, published in 1979 and later amended several times, which issued a number of derogations to the United Kingdom and Ireland based on the former directive.

The Directive on the promotion of cogeneration based on a useful heat demand in the internal energy market and amending Directive 92/42/EEC, officially Directive 2004/8/EC, is a European Union directive for promoting the use of cogeneration, popularly better known as the 'Combined Heat and Power (CHP) Directive'.

The Energy Performance of Buildings Directive is the European Union's main legislative instrument aiming to promote the improvement of the energy performance of buildings within the European Union. It was inspired by the Kyoto Protocol which commits the EU and all its parties by setting binding emission reduction targets.

<span class="mw-page-title-main">Renewable energy in Spain</span> Overview of renewable energy in Spain

Spain, along with other European Union States, has a target of generating 32% of all its energy needs from renewable energy sources by 2030. A previous target of 20% for 2020, with an additional 0.8% available for other EU countries under the cooperation mechanism, was reached and slightly surpassed. In 2021, renewables generated 46.7% of Spain's electricity needs, the largest part of it from wind power (23.3%), followed by hydroelectric (11.4%), solar (9.9%), and other renewables (2.2%).

<span class="mw-page-title-main">European Union value added tax</span> EU-wide goods and services tax policy

The European Union value-added tax is a value added tax on goods and services within the European Union (EU). The EU's institutions do not collect the tax, but EU member states are each required to adopt in national legislation a value added tax that complies with the EU VAT code. Different rates of VAT apply in different EU member states, ranging from 17% in Luxembourg to 27% in Hungary. The total VAT collected by member states is used as part of the calculation to determine what each state contributes to the EU's budget.

<span class="mw-page-title-main">Directive 89/391/EEC</span> European Union directive

Directive 89/391/EEC is a European Union directive with the objective to introduce measures to encourage improvements in the safety and health of workers at work. It is described as a "Framework Directive" for occupational safety and health (OSH) by the European Agency for Safety and Health at Work.

Strict sustainability standards for biofuel in the European Union (EU) are set by the European Commissioner on Energy. Biofuels are considered a renewable alternative to fossil fuels in the transportation sector for the EU. The EU has played a large role in increasing the use of biofuels in member states; however, it has also aimed, to some extent, to mitigate the potential negative impacts of biofuel production. Current EU legislation on biofuels includes a goal to increase renewable energy consumption by 20%, eliminate biofuel feedstock sourced from carbon-rich land, accounting for emissions caused from land use change as well as solely biofuel usage, and reducing greenhouse gas intensities from fuels used in transport and machinery.

European labour law regulates basic transnational standards of employment and partnership at work in the European Union and countries adhering to the European Convention on Human Rights. In setting regulatory floors to competition for job-creating investment within the Union, and in promoting a degree of employee consultation in the workplace, European labour law is viewed as a pillar of the "European social model". Despite wide variation in employment protection and related welfare provision between member states, a contrast is typically drawn with conditions in the United States.

The German National Renewable Energy Action Plan is the National Renewable Energy Action Plan (NREAP) for Germany. The plan was commissioned under EU Renewable Energy Directive 2009/28/EC which required member states of the European Union to notify the European Commission with a road map. The report describes how Germany plans to achieve its legally binding target of an 18% share of energy from renewable sources in gross final consumption of energy by 2020.

<span class="mw-page-title-main">European company law</span>

European company law is the part of European Union law which concerns the formation, operation and insolvency of companies in the European Union. The EU creates minimum standards for companies throughout the EU, and has its own corporate forms. All member states continue to operate separate companies acts, which are amended from time to time to comply with EU Directives and Regulations. There is, however, also the option of businesses to incorporate as a Societas Europaea (SE), which allows a company to operate across all member states.

<span class="mw-page-title-main">EU Energy Efficiency Directive 2012</span>

The Energy Efficiency Directive 2012/27/EU is a European Union directive which mandates energy efficiency improvements within the European Union. It was approved on 25 October 2012 and entered into force on 4 December 2012. The directive introduces legally binding measures to encourage efforts to use energy more efficiently in all stages and sectors of the supply chain. It establishes a common framework for the promotion of energy efficiency within the EU in order to meet its energy efficiency headline target of 20% by 2020. It also paves the way for further improvements thereafter.

<span class="mw-page-title-main">Aviation taxation and subsidies</span> Taxes and subsidies related to aviation

Aviation taxation and subsidies includes taxes and subsidies related to aviation.

Taxation of aviation fuel in the European Union is regulated by the Energy Taxation Directive (2003/96/EG) of 27 October 2003. This prohibits the taxation of commercial aviation fuel, except for commercial domestic flights or by bilateral agreement between member states. As of 2023, commercial aviation fuel is currently tax exempt under the legislation of all member states of the European Union. This tax exemption has been criticised on environmental grounds.

References

  1. 1 2 Jo Dardenne (March 2020). "The Energy Taxation Directive. T&E's feedback on the Inception Impact Assessment" (PDF). Transport and Environment . Retrieved 14 June 2020.
  2. ↑ Official long title: Council Directive 2003/96/EC of 27 October 2003, restructuring the Community framework for the taxation of energy products and electricity. Published in the Official Journal of the European Union no. L 283, 51 on 31 October 2003.
  3. 1 2 3 "EU rules for the taxation of energy products and electricity". Summaries of EU Legislation, EUR-Lex . Publications Office. 28 November 2016. Retrieved 14 June 2020.
  4. ↑ Jasper Faber and Aoife O'Leary (November 2018). "Taxing aviation fuels in the EU" (PDF). CE Delft. Transport and Environment . Retrieved 14 June 2020.
  5. ↑ Council Directive 92/81/EEC of 19 October 1992 on the harmonization of the structures of excise duties on mineral oils
  6. ↑ Council Directive 92/82/EEC of 19 October 1992 on the approximation of the rates of excise duties on mineral oils
  7. ↑ Erwägungsgrund (1) der 2003/96/EG.
  8. ↑ Primary law is the supreme source of law in the European Union, deriving from seven categories: founding treaties, amending treaties, accession treaties, protocols annexed to those treaties, supplementary agreements amending specific sections of the founding treaties, the Charter of Fundamental Rights of the European Union (since the Treaty of Lisbon), and general principles established by the Court of Justice of the European Union (CJEU). "The European Union's primary law". Eur-Lex. Publications Office. 13 March 2020. Retrieved 16 June 2020.
  9. ↑ Article 113 Treaty on the Functioning of the European Union (former Article 93 TEC).
  10. ↑ European Commission (2011). "Communication from the Commission to the European Parliament, the Council and the European Economic and Social Committee – Smarter energy taxation for the EU: proposal for a revision of the Energy Taxation Directive" (PDF)., Format: PDF, KBytes: 63
  11. ↑ Mikael Skou Andersen, I. Parry, K. Pittel, H. Vollebergh (2017), "A Comment on "Reforming the EU Energy Tax Directive: Assessing the Options"", Energy Tax and Regulatory Policy: Reform Priorities, ISBN   978-0-262-03639-9 {{citation}}: CS1 maint: multiple names: authors list (link)
  12. ↑ ETC revision in 2021
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.