Minimum duties on energy agreed

Claire Monkhouse from the IEEP looks at the latest developments at the European Commission

Ecofin Ministers meeting on 20 March finalised an agreement on the Directive on the Taxation of Energy, ending a six-year impasse. The Directive sets minimum rates for the taxation of fuels. For motor fuels, rates are increased from those set out in the 1992 Mineral Oils Directives (Directives 92/81/EEC and 92/82/EEC). In addition, minimum rates are set for a range of other fuels.

Over the last two years, the principal obstacle to an agreement has been the minimum rates for diesel used for transport, which have now been agreed at 2302/1000litres from 1 January 2004 and e330/1000litres from 1 January 2010. Member States are allowed to differentiate between commercial and non-commercial use, as long as the rate stays above the appropriate minimum rate and the national rate as this stood at 1 January 2003. However, Italy and France have been allowed to continue with lower rates of duty for road hauliers until 2005. Spain, Austria, Belgium, Portugal, Luxembourg and Greece have been allowed to delay achieving the first minimum rate by up to 6 years, and have until 2012 to meet the second.

The agreement will actually have few short-term effects on most Member States, but Commissioner Bolkestein claimed that the agreement would have "immeasurable" benefits for the environment.

Further Information Proposal for a Council Directive Restructuring the Community Framework for the Taxation of Energy Products, COM(1997)30, OJ C 139 6.5.1997, available from:!celexapi!prod!CELEXnumdoc&lg=EN&numdoc=51997PC0030&model=guichett



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