EURELECTRIC: welcomes European Commission’s proposal for carbon tax

Following the publication on 13 April of the long-awaited European Commission proposal to revise the Energy Taxation Directive, EURELECTRIC welcomes the initiative to overhaul some outdated rules on the taxation of energy products and electricity in the EU in order to bring them more into line with the EU’s energy and climate change policy and objectives. EURELECTRIC recognises and supports those objectives and acknowledges the key role our sector will play in achieving a secure, sustainable and competitive energy supply. EURELECTRIC stresses that these objectives must be met by using the most-cost effective instruments and by ensuring their mutual coherence.

Under the new rules, the Commission sets an exemption from the proposed new CO2 tax component for sectors covered by the EU Emission Trading Scheme (EU ETS), which also includes the electricity sector. We welcome this measure and consider it appropriate as it will avoid any overlap and any double tax burden for our sector.

EURELECTRIC also welcomes the European Commission’s proposal to maintain the current tax exemption provision for primary fuel consumption used for power generation. We note however that some Member States do impose taxes on fossil fuels used for power generation. These different national taxes hamper market integration and distort competition.

EURELECTRIC has taken note of the European Commission’s accompanying impact assessment and will in the coming weeks further evaluate the impact of the proposed tax levels and possible exemptions on:

• the competitive position of the different energy vectors for the same use and the international competitiveness of industrial energy consumers (in particular the energy-intensive sectors);
• the feasibility and costs in reaching the EU’s climate targets and the transition to a low carbon energy system.