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28th Jan 2023

Commission to table carbon emissions tax proposal

  • The commissioner is to table a proposal in the next few months (Photo: European Community, 2006)

The European Commission is planning in the next couple of months to table a proposal for a carbon tax, a move likely to cause division among member states.

EU taxation commissioner Algirdas Semeta told Brussels weekly European Voice that he is planning draft legislation on a minimum rate of tax on carbon emissions.

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"In my estimation it is possible to start discussion within the college [of European Commissioners]," he told the newspaper, adding that "there is currently the right momentum" to relaunch the issue.

His spokesperson said that the "energy directive is one of the priorities he would like to pursue," during his five-year mandate and that an impact assessment of such a carbon tax is now being finalised. The commissioner would like to publish the proposal in the next "couple of months."

Mr Semeta's predecessor, Laszlo Kovacs, also planned legislation on the same issue in 2008 but the idea was shelved after it was deemed too divisive.

According to the European Voice, Mr Kovacs' draft legislation would have set a minimum of excise rate of €10 per tonne of CO2 emitted, however the new impact assessment may result in a change to where the rate is set.

Mr Semeta is looking to calculate the tax according to how environmentally damaging the fuel is, with fuels emitting high level of carbon emissions taxed more heavily.

Several member states already have national carbon taxes, including Sweden, Denmark and Finland. France tried to introduce one but the country's top court last year struck down the attempt calling it unequal and counterproductive.

However, any EU-level proposal is likely to cause opposition among those member states who feel tax policies are the preserve of national governments. The UK has already voiced its opposition to the plan, which would need to be supported by all 27 member states.

Previously a taboo, the idea of a direct European tax is now being mentioned more often. Jose Manuel Barroso raised the possibility in his political guidelines on the commission's work for the next five years, while EU Council President Herman Van Rompuy, before his took up his post, spoke about the need for "financial levies at European level."

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