Taxation of energy products

The Energy Taxation Directive (2003/96/EC) sets a minimum taxation rate for energy products. Article 4 specifies that the Directive does not apply to energy products used for “Mineralogical processes” falling in NACE-class 26 (rev. 1.1) “manufacture of other non-metallic mineral products”.

In 2011, the Commission presented a proposal to revise the existing Energy Taxation Directive.

The proposal introduces a CO2 tax based on the carbon content of the different fuels used in a sector, to mirror the carbon price signal mechanism present in the ETS. However, the proposal makes a distinction between sectors covered by the EU ETS and those outside it, in order to avoid double taxation

The revised tax on energy products should now be based on the energy content of fuels, rather than on volume, avoiding products with lower energy content such as renewables to carry a heavier tax burden compared to the fuels they are competing with.

“Mineralogical processes” are still excluded from the energy-related part of the Directive.

The revision requires unanimity in the Council.