Energy Taxation Directive

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Energy Taxation Directive

The EU Energy Taxation Directive contains provisions for the taxation of energy products and electricity. The Directive was adopted in 2003 to set minimum levels of taxation for most energy products in the EU internal market. 
As part of the ‘Fit for 55’ package, the Commission has submitted a proposal for a revision of the existing Energy Tax Directive. As part of this proposal, the taxation of energy should in future be based on energy content. In addition, taxation should have been extended to energy sources that were not previously included in the Energy Tax Directive (e.g. pellets) and the tax exemptions for intra-Community air transport (except cargo flights) and shipping should have been abolished.
However, the proposal could not be finalised during the 2019-2024 legislative period, which is why it was not revised. It is questionable whether the Energy Taxation Directive will be addressed in future projects, as the principle of unanimity among the member states applies to tax issues, which makes it difficult to reach an agreement.

Objectives:

Reduction of energy consumption Demonstrating the impact of fuels and heating on the environment

What will be taxed?

Energy products (natural gas, gaseous hydrocarbons, crude oils, vegetable oils)

Electricity

Are only taxable if they are used as heating fuel or motor fuel. The minimum tax rates differentiate between energy sources, areas of use (heating, transport) and type of use (commercial, non-commercial).

Minimum tax amounts:
Heating oil for commercial use: €15 per 1000 kg.
Electricity: €1 per MWh.
Electricity for operational use: 50 cents per MWh.
The member states are free to set tax amounts above these minimum amounts. In principle, it is not permitted to fall below this level, but there are exceptions.

Further information:

[EUR Lex] EU Energy Taxation Directive