EU: Commission proposes zeroing energy taxes to boost electricity use
The European Commission released two policy proposals on Wednesday, urging EU member states to reduce or eliminate energy taxes to support greater electricity usage and reduce dependence on fossil fuels.
The proposed plans, known as the Clean Industrial Deal and the Action Plan on Affordable Energy, seek adjustments to national tax systems within the EU to facilitate a shift towards electricity.
Main points of the proposals:
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Member states are encouraged to remove or significantly reduce energy taxes, specifically to promote electrification over fossil fuels.
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EU Tax Commissioner highlighted the recommendation to eliminate non-energy-related levies and taxes to reduce burdens on businesses.
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The Clean Industrial Deal proposes enhancing the EU’s industrial competitiveness while reducing greenhouse gas emissions through supportive tax measures.
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The Action Plan on Affordable Energy suggests completing negotiations on the revised Energy Taxation Directive, initially proposed in 2021, which remains stalled in the EU Council due to disputes over aviation and maritime fuel exemptions.
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The directive permits:
- Reducing energy taxes for households and energy-intensive industries.
- Taxing fuels based on their environmental impact.
- Lowering VAT rates to at least 5 percent.
- Eliminating unrelated levies from energy bills.
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Executive Vice President stressed the need for member states to finalize negotiations on the updated Energy Taxation Directive, initially proposed in 2021.
The proposals are part of the EU’s broader strategies aimed at reducing greenhouse gas emissions and enhancing the competitiveness of European industries.
