EU Green Deal requires new European Energy Tax Directive

Pure e-fuels intended for consumption as fuel or offered or used as such are energy products (standard definition) and are currently subject to the same tax at national level as would be levied on an equivalent fuel (similarity principle) (Art. 2 (3) Energy Tax Directive). The main basis for this are the requirements of the European Energy Tax Directive. Accordingly, preferential treatment of e-fuels would only be possible under a special allowance pursuant to Art. 19 (1) of the Directive. This allowance is generally valid for a maximum of six years, after which it would have to be reapplied for.

The EU Commission has announced that it will reform the EU Energy Tax Directive. We at the VDA expressly welcome this, because the existing directive has been in force since October 2003 – in other words, for almost 20 years. In terms of content, it therefore reflects the level of technical development at the end of the last century. The new, ambitious goals of the Green Deal can only be achieved with a reform of the European energy tax that focuses on the fossil CO₂ content of the fuel as a measure of the tax level. Important climate policy goals and technical developments in the field of renewable energy sources, such as modern, synthetic climate-neutral fuels or electricity from additional renewable sources, are not yet or insufficiently reflected and promoted in the current energy tax directive. For the member states to achieve the climate protection targets there is an urgent need for greater flexibility in the instruments for tax incentives.

The VDA is therefore in favor of orienting taxation toward the CO₂ content: In the future, the energy tax directive should be based as far as (politically) possible on the CO₂ content of the energy sources. The CO₂ concentration of energy sources is defined in the Renewable Energy Directive (Directive (EU) 2018/2001). Reference should be made to this so as to avoid additional bureaucracy. Almost climate-neutral energy sources, such as renewable electricity, advanced biofuels, and synthetic fuels (e-fuels), should be tax-exempt to promote the market ramp-up of these technologies. In this context, the interaction of new regulations in the Energy Tax Directive with other instruments (SESTA, EU-ETS) must be carefully analyzed in an impact assessment to ensure appropriate taxation and avoid double taxation as far as possible.