EU to table revised energy taxation directive

The European commission will put forward a proposal to revise the 2003 EU energy tax directive in early April as part of a package of measures on environmental taxation, ENDS has learned.

A draft proposal drawn up by the commission's tax department has been sent to other departments for internal consultation. Other elements of April's green tax package will include a draft law allowing EU member states to apply reduced VAT rates to certain green products.

The commission will also issue a policy paper on the role of taxes in energy and environmental policy, according to a letter sent by its tax department to green group EEB on Tuesday.

Details of the energy taxation proposal have not yet emerged. The idea would be to introduce an "explicit" environmental element in the energy tax directive, according to a green paper on market-based instruments issued by the commission two years ago.

The split between the energy and environmental component of the tax rates would be similar to that in a proposal on car taxation, where half of the rates is linked to CO2 emissions. EU finance ministers rejected the car taxation plan in 2007.

In an EU economic recovery plan endorsed by European leaders in December the commission said it would propose reduced VAT rates for green products and services to help improve buildings' energy efficiency and boost sustainable consumption.

Source: ENDS