On the proposal for a Council directive restructuring the Union framework for the taxation of energy products and electricity (recast)
AGRI-AD-719785
Committee on Agriculture and Rural Development · Rapporteur: Martin Hlaváček
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The Committee on Agriculture and Rural Development gives its opinion on the proposed Council directive recasting the Union framework for taxing energy products and electricity. It proposes amendments to keep tax exemptions and reductions for energy used in agriculture, horticulture, aquaculture and forestry.¶¶¶ It wants a new article letting member states apply a level of taxation down to zero for such uses until affordable and practically feasible alternatives exist, and to allow reductions down to zero for heating and electricity used in these sectors.¶¶ It proposes definitions of sustainable biofuel and sustainable biogas, changes to the CN codes for alcohol and bio-based products, and asks that Parliament be kept informed on how the directive is applied.¶¶¶
Committee position. The committee calls on the Committee on Economic and Monetary Affairs, as committee responsible, to take into account its amendments. It proposes keeping tax exemptions and reductions for energy used in agriculture, horticulture, aquaculture and forestry, including taxation down to zero until alternatives exist, and adding definitions and reporting duties.¶¶¶
Key points
- The proposal switches energy taxation from volume to energy content, groups energy products by environmental performance, and generally reduces exemptions and reductions.¶
- Tax exemptions and reductions for energy and electricity used in agricultural, horticultural, piscicultural and forestry works, including taxation down to zero, would no longer be possible as currently applied.¶
- Member states could still apply limited reductions for such uses, but only for heating purposes under Article 17.d.¶
- The rapporteur wants exemptions and reductions kept for fuels such as gas oil for agricultural use, citing food security, competitiveness and the absence of alternatives for agricultural machinery.¶
- The rapporteur proposes merging certain categories and rates of bio-based energy products, and says the proposal lacks clear definitions of them, referring instead to the Renewable Energy Directive 2018/2001.¶
- The rapporteur asks that Parliament be among the institutions the Commission must keep informed on implementation of the directive in the five years after entry into force.¶
- Amendments to the recitals add references to socio-economic and food security challenges, the European Climate Law, the 55% reduction in net greenhouse gas emissions by 2030, health and biodiversity, and the differing socio-economic levels of member states.¶¶¶
- Amendments add greenhouse gas savings performance to the basis for taxation, allow derogations from minimum levels for a predefined period, and add socio-economic ranking to the structure of rates.¶¶¶
- Amendments add food production and security to energy prices as key elements of Union policies, and add a Union framework for member states to exempt or reduce excise duties to promote biofuels.¶¶
- Amendments add international competitiveness of the Union productive sector and social or sectorial impacts to the grounds for targeted tax reductions, and say the primary sector and food production merit specific treatment.¶¶
- Amendments require the Commission to report to Parliament and the Council every five years, examining whether minimum levels should be increased or expanded and the impact of the Emission Trading System on carbon pricing.¶¶¶
- Amendments change the treatment of alcohol under CN codes 2207, 2208 90 91 and 2208 90 99 intended as heating or motor fuel, and add new definitions of sustainable biofuel and sustainable biogas.¶¶¶
Who is affected
- Farmers, horticultural, aquaculture and forestry businesses, which would lose current tax exemptions and reductions on energy and electricity.¶¶
- Member states, which could apply taxation down to zero for agricultural, horticultural, aquaculture and forestry energy use until alternatives exist.¶¶
- Producers and distributors of biofuels, for whom a Union framework for excise duty exemptions or reductions would be established.¶
- Producers, active customers, renewable energy self-consumers and energy communities, which could receive refunds of tax on electricity produced from certain products.¶
Figures and deadlines
- at least 55 % reduction in net greenhouse gas emissions by 2030 compared to 1990¶
- 31 January 2022, date the European Court of Auditors published Review 01/2022 on energy taxation, carbon pricing and energy subsidies¶
- five years, the period after entry into force for the Commission's first report and the interval for later reports¶¶
- 1 January 2023, the reference date for the first five-yearly Commission report