EU to propose harmonised CO2 tax rates on fuels
Mon 08 March 2010
View all news
The EU's new taxation commissioner, Algirdas Šemeta, is to propose harmonising minimum CO2 tax rates on fuels in Europe. The proposal would overhaul the EU's existing energy taxation directive to bring it into line with the bloc's environmental priorities.
Currently, the law sets minimum tax levels that EU states must levy on fuels according to volume consumed. The new proposals would base taxation on the CO2 content of the fuels on the one hand, and their energy content on the other. This means that fuels like coal, which emits a large amount of CO2 but has a low energy content, would be taxed most heavily.
Šemeta told the Brussels-based European Voice newspaper: "In my estimation it is possible to start discussions. There is currently the right momentum to relaunch the issue".
The commissioner is expected to publish the proposal in the next couple of months. Mr Šemeta's predecessor, Laszlo Kovacs, also planned legislation on the same issue in 2008 but the idea was shelved after it was deemed too divisive.
A growing number of member states are introducing carbon taxes, joining Nordic countries Sweden, Finland and Denmark, which have been applying them since the early 1990s. France and Sweden are declared supporters of an EU carbon tax as a part of Europe's fight against climate change whilst the UK has expressed solitary oppositon. The proposal would need to be supported by all 27 member states. However, many EU states also believe tax policies should be the preserve of national governments.
Related Links
< Back to news list