Saturday

20th Jul 2019

Commission wants capitals to give up energy tax veto

  • Flying is sometimes relatively cheap because of several tax exemptions (Photo: Nelson L.)

The European Commission renewed its push to remove member state vetoes in tax matters on Tuesday (9 April), by arguing the introduction of qualified majority voting on EU legislation on taxing energy.

"At present, there is just not enough policy coherence between the energy taxation framework and the energy and climate policies and objectives," said EU climate action commissioner Miguel Arias Canete in a written statement.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

He spoke ahead of the publication of a commission paper, which argued that in the field of energy taxation, member states should move from unanimous decision-making to qualified majority.

There is a qualified majority in the EU if 55 percent of the member states, representing 65 percent of the EU population, are in favour.

In January, the commission already announced it wanted to use the qualified majority rule for voting on a proposed new tax on large digital companies.

On Tuesday, the commission made the specific case for moving to qualified majority in the field of energy, as part of a larger package of Energy Union measures.

The commission argued that the EU's framework for energy taxation was "outdated" because it had remained unchanged since 2003.

In particular, the commission said that the patchwork of country-specific tax regimes in Europe were not allowing the EU to apply the 'polluter pays' principle.

It said that tax exemptions or reductions "notably in the aviation, maritime and road haulage and agricultural/fisheries sectors and for energy-intensive industries" were weakening incentives to use cleaner forms of energy.

An example of that was showcased at a recent railways conference in Utrecht, the Netherlands.

At a workshop about how to improve pan-European travel by train, one participant stood up to call on the audience to sign a petition, which argued travelling by train should be cheaper than flying when travelling distances under 750km.

"A major disadvantage is that there is no tax on kerosene," said the participant, Maarten Pijnacker Hordijk, an advisor at a railway infrastructure company.

He said the aviation sector had an unfair advantage over the railway sector, because of such tax exemptions.

"Everyone should be able to choose [their preferred mode of transport], but we should be made to pay the actual price, including the environmental impact," said Pijnacker Hordijk.

The commission is more careful in its paper, which does not argue specifically for taxation of kerosene.

It does state that tax exemptions or reductions "may promote inefficient and polluting modes of transport".

The commission also acknowledged that energy taxes can "steer behaviour in a way that meets wider societal needs and objectives related to the clean energy transition and climate change".

"Energy taxes should be designed in such a way that they provide notably for appropriate incentives to reduce emissions over time and improve resource efficiency, including through environmentally consistent tax rates across various energy carriers and fuels," it said.

But the question is whether member states will take the bait.

The previous commission paper on 'QMV', released only three months ago, was received tepidly.

In February, finance ministers met in Brussels to discuss it, and there was no consensus.

Even Dutch finance minister Wopke Hoekstra did not bite, after presenting a proposal for an aviation tax.

He told journalists after the meeting that EU finance commissioner Valdis Dombrovskis had quipped, after Hoekstra's presentation, that surely QMV would help the Dutch proposal get passed.

But the Dutch minister disagreed it was needed.

"Unanimity and good decision-making on important tax issues can go hand-in-hand," said Dutch minister Hoekstra in February.

"I think in the end you can have fast and good high-quality decision-making without QMV," he added.

EU commission eyes majority tax rules

The commission plans to address tax avoidance schemes in some EU states by shifting tax decisions away from unanimity to a majority system in what amounts to a long shot.

Nobel laureates propose global CO2 tax

With new scientific research showing that the Polar ice cap could be completely gone in as little as seven years, this year's Nobel peace prize winners suggest a global tax on CO2 pollution and a change in lifestyle to heal the planet.

Focus

Dim prospects for EU energy tax reform

The logic behind a European Commission's proposal on energy taxation is based on the concept of "fuel neutrality" but it could hurt alternative fuels the most.

Analysis

EU purchase of US gas serves dual purpose

The EU wants to diversify the sources where it gets its natural gas from - while importing more liquefied natural gas (LNG) from the US could also slightly appease Donald Trump.

Investigation

EU's claim Energy Union now 'a reality' not based on facts

The Juncker commission this week awarded it self top marks on the Energy Union, declaring it "completed". But a detailed analysis reveals the commission quietly stopped reporting on key indicators that would have shown the actual level of progress.

Planned German coal exit boosts case for Nord Stream 2

German commission recommends phasing out coal power over the next 19 years - which will provide additional arguments to build the controversial Nord Stream 2 pipeline from Russia, which both the European Commission and the US have reservations about.

Stakeholders' Highlights

  1. UNESDAUNESDA reduces added sugars 11.9% between 2015-2017
  2. International Partnership for Human RightsEU-Uzbekistan Human Rights Dialogue: EU to raise key fundamental rights issues
  3. Nordic Council of MinistersNo evidence that social media are harmful to young people
  4. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021
  5. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  6. Nordic Council of MinistersEducation gets refugees into work
  7. Counter BalanceSign the petition to help reform the EU’s Bank
  8. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  9. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  10. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  11. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  12. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North

Latest News

  1. EU goes on holiday as new UK PM arrives This WEEK
  2. Survey: Half of EU staff 'don't know' ethics rules
  3. Von der Leyen signals soft touch on migrants, rule of law
  4. Timmermans: von der Leyen will be tough on rule of law
  5. Timmermans trolls 'idiot' Brexit negotiators
  6. Rudderless Europe: Will real Germany please stand up?
  7. PiS & Fidesz claim credit for von der Leyen victory
  8. Von der Leyen faces gender battle for commission posts

Stakeholders' Highlights

  1. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  2. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  3. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  4. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year
  5. Nordic Council of MinistersNordic commitment to driving global gender equality
  6. International Partnership for Human RightsMeet your defender: Rasul Jafarov leading human rights defender from Azerbaijan
  7. UNICEFUNICEF Hosts MEPs in Jordan Ahead of Brussels Conference on the Future of Syria
  8. Nordic Council of MinistersNordic talks on parental leave at the UN
  9. International Partnership for Human RightsTrial of Chechen prisoner of conscience and human rights activist Oyub Titiev continues.
  10. Nordic Council of MinistersNordic food policy inspires India to be a sustainable superpower
  11. Nordic Council of MinistersMilestone for Nordic-Baltic e-ID
  12. Counter BalanceEU bank urged to free itself from fossil fuels and take climate leadership

Join EUobserver

Support quality EU news

Join us