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OPINION (COM(2021)0563 – C90034/2022 – 2021/0213(CNS))

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

ITRE-AD-768158

Committee on Industry, Research and Energy · Rapporteur: Borys Budka

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The Committee on Industry, Research and Energy gives its opinion on the proposed Council directive restructuring EU taxation of energy products and electricity. It proposes amendments to the Commission's recast text. The opinion backs a tax structure based on energy content and environmental performance, and asks for no exemptions for environmentally harmful activities while cleaner technologies get the right price signal. It proposes four main changes: a Social Monitor with reporting by Member States and the Commission, a quantitative definition of energy poverty, mandatory tax exemptions for renewables and self-consumption, and a certification framework for the origin of electricity. The amendments would tax energy only at final consumption, exempt storage and conversion, allow Member States flexibility, and set reporting duties on energy prices and energy poverty.

Committee position. The committee proposes amendments to the Commission's recast proposal, based on four main changes: a Social Monitor with reporting, a quantitative definition of energy poverty, mandatory exemptions for renewables and self-consumption, and a certification framework for electricity origin.

Key points

  1. The opinion supports a tax rate structure based on energy content and environmental performance rather than volume, and says the 2003 directive no longer reflects the market.
  2. It proposes a Social Monitor: Member States would report every two years on social measures and revenue use, and the Commission every two years on energy prices and energy poverty.
  3. It would replace the definition of vulnerable consumers with a quantitative definition of energy poverty, using criteria such as energy cost share of disposable income and housing quality.
  4. Households in or at risk of energy or transport poverty could be exempt from taxation for a maximum of ten years after entry into force, and longer if the Social Monitor shows no significant progress.
  5. Member States would be required, not merely allowed, to apply exemptions or reductions for sustainable renewable energy products and for energy from renewable self-consumers and energy communities.
  6. Energy taxation would apply only to final consumption; energy use within the energy value chain, conversion and storage would not be taxed, and double taxation would be eliminated.
  7. The Commission would develop a common certification framework specifying the origin and source of electricity consumed, aided by digitalisation of electricity grids.
  8. The annual automatic alignment of minimum tax rates to the harmonised index of consumer prices would be deleted, and the related delegated power removed.
  9. Transitional increases in minimum levels of taxation would be gradual, at one tenth per year until 1 January 2033, with low-carbon fuels held at the first-year level until that date.
  10. Fuel used for waterborne navigation, including fishing, would be taxed, with lower minimum levels for intra-EU regular service navigation, fishing and freight, and a ten-year exemption for sustainable alternative fuels and electricity.
  11. Energy-intensive enterprises could receive tax reductions if they commit to circular, zero-pollution, highly energy-efficient and renewable-based operations.
  12. The Commission would report to the European Parliament and the Council every five years on the directive's application, including minimum tax levels, innovation, and effects on cohesion.

Who is affected

  • Households in or at risk of energy or transport poverty, who could be exempt from energy taxation for up to ten years.
  • Renewable self-consumers, energy communities and active consumers, who would benefit from mandatory exemptions and refunds.
  • Energy-intensive enterprises, which could receive tax reductions tied to climate and energy efficiency commitments.
  • Member States, which would gain flexibility on national rates and face new reporting duties.
  • The waterborne navigation, fishing and freight sectors, which would face taxation with lower minimum levels and a ten-year exemption for sustainable fuels.

Figures and deadlines

  • A 55% reduction in net greenhouse gas emissions by 2030 compared to 1990 is cited in recital 3.
  • Transitional increases in minimum levels of taxation are fixed at one tenth per year until 1 January 2033.
  • Sustainable alternative fuels and electricity for waterborne navigation would be exempt from taxation for ten years.
  • Households in or at risk of energy poverty could be exempt for a maximum period of ten years after entry into force.
  • Households below 60% of the national median equivalised disposable income would be exempt for a maximum of ten years.
  • The Commission would report on energy prices two years after entry into force and every two years thereafter.
  • Member States would report on social measures two years after entry into force and every two years thereafter.
  • The Commission would report to the European Parliament and the Council every five years on the directive's application.