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Delay of EU Energy Tax a missed opportunity

Date

29 Jun 2010

Sections

Climate & Environment
Energy

 Brussels, Today - The recent decision of the European Commission to delay the review of Directive 2003/96/EC on the taxation of energy products is a missed opportunity to introduce concrete measures to deliver on climate and energy security targets, said eBIO.

Speaking about the decision Rob Vierhout, eBIO Secretary-General, said “we as an industry are very disappointed that the Commission has decided to shelve this issue until further notice. This decision is inconsistent with existing policy and we believe that a revision of the fuel tax regime is necessary and is needed now.

The current fuel taxation measures are based on the volume of fuel used. This system structurally disadvantages biofuels, in particular ethanol, which have a lower energy content compared to their fossil alternatives. In addition, environmental costs of using fossil fuels are not accounted for properly. An EU-wide carbon tax, which would have been the backbone of a revised Energy Tax Directive, would correct this flaw. This is especially true for the transport sector, which is not covered under the Emissions Trading Scheme.

In Europe, greenhouse gas emissions from the transport sector have increased by approximately 30% since 1990. In addition, the environmental consequences of fossil fuel use have been headline news for the past two months. As Commissioner Hedegaard rightly said, we should be taxing what we burn, not what we earn. “European bioethanol is a valuable ready and easy to-use solution for the pressing problems related to Europe’s fossil fuel addiction in the transport sector. So why did the policy makers decide not to send the right signal to fuel consumers?”, asked Vierhout.

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