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DRAFT OPINION (COM(2021)0563 – C90362/2021 – 2021/0213(CNS))

On the proposal for a Council directive restructuring the Union framework for the taxation of energy products and electricity (recast)

AGRI-PA-719785

Committee on Agriculture and Rural Development · Rapporteur: Martin Hlaváček

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The Committee on Agriculture and Rural Development gives its draft opinion on the proposed Council directive restructuring the Union framework for the taxation of energy products and electricity. It calls on the Committee on Economic and Monetary Affairs to take account of eight amendments. The rapporteur says the recast, part of the European Green Deal and Fit for 55, switches taxation from volume to energy content and reduces exemptions and reductions, ending the current tax treatment of energy used in agriculture. The amendments would allow Member States to exempt or reduce excise duties on biofuels, add sectorial impact and the primary sector to recital 28, and add energy products and electricity used for agricultural, horticultural or aquacultural works and forestry to the tax reductions in Article 16. They would also define sustainable biofuel and sustainable biogas, adjust the list in Article 16, and require the Commission to report to the European Parliament as well as the Council every five years.

Committee position. The rapporteur considers that exemptions and reductions on energy used in agriculture should be kept for food security and competitiveness, proposes merging categories and rates of bio based energy products, and calls for Parliament to be kept informed on implementation.

Key points

  1. The rapporteur finds the recast will have a considerable impact on the primary sector and that current exemptions and reductions for energy used in agriculture, horticulture, pisciculture and forestry will no longer be possible.
  2. Member States could still apply limited reductions, but only for heating purposes under Article 17.d.
  3. The rapporteur considers keeping exemptions and reductions, for example on gas oil for agricultural use, paramount for European food security and competitiveness, as no alternatives exist to gas oil in agricultural machinery.
  4. The rapporteur proposes to merge certain categories and rates of bio based energy products, saying the proposal lacks clear definitions and refers instead to the Renewable Energy Directive 2018/2001.
  5. The rapporteur calls for the European Parliament to be among the institutions kept informed by the Commission on implementation in the five years after entry into force.
  6. Amendment 1 would add to recital 26 that a Union framework should let Member States exempt or reduce excise duties to promote biofuels, limiting distortions of competition and maintaining incentives for producers and distributors.
  7. Amendment 2 would add international competitiveness of the Union productive sector to recital 27 on targeted reductions in the tax level.
  8. Amendment 3 would add social or sectorial impact to recital 28 and state that the primary sector, particularly food production, merits specific treatment.
  9. Amendment 4 would require the Commission to report to the Council and the European Parliament every five years on the application of the directive.
  10. Amendment 5 would define sustainable biofuel and sustainable biogas as fuels from feedstocks other than those in Annex IX, Part A, to Directive 2018/2001 that meet the directive's sustainability and greenhouse gas emission-saving criteria.
  11. Amendment 6 would remove the word advanced before sustainable biofuels and sustainable products under CN codes 4401 and 4402 in Article 16(1)(d).
  12. Amendment 7 would add energy products and electricity used for agricultural, horticultural or aquacultural works and forestry to Article 16(1), and Amendment 8 would require the Commission's five-yearly report under Article 31(1) to go to the European Parliament as well as the Council.

Who is affected

  • The primary sector, especially agriculture, horticulture, pisciculture, aquaculture and forestry, which would lose current tax exemptions and reductions.
  • Producers and distributors of biofuels, for whom Amendment 1 seeks to maintain incentives through reduced basic costs.
  • Member States, which could still apply limited reductions for heating and, under the amendments, for agricultural energy use.
  • The Commission, which would have to report to the European Parliament as well as the Council every five years.

Figures and deadlines

  • Every five years, and for the first time five years after entry into force, the Commission should report on the directive's application.
  • Every five years and for the first time five years after 1 January 2023, the Commission shall submit a report on the application of the directive.