Position paper – Energy Taxation Directive

The European Automobile Manufacturers’ Association (ACEA) welcomes the European Commission’s proposal to restructure the Union framework for the taxation of energy products and electricity. Within the ‘Fit for 55’ climate package, the Energy Taxation Directive (ETD) is one of the key elements of an effective policy framework that supports and enables the transition to carbon neutrality.

This paper sets out ACEA’s position on the ETD, key recommendation include:

  1. While customers and operators may accept higher taxes on fossil fuels, that will likely not be the case if low-carbon alternative fuels capable of being used in new and older vehicles are not widely available and attractively priced. This illustrates how the various parts of the Fit for 55 package need to work together to achieve the overall EU objective.
  2. The impact of annual indexation on the proposed minimum tax rates and the impact on businesses and national authorities appears excessive, so ACEA would suggest a more flexible approach.
  3. Low-carbon sustainable biofuel and biogas have to meet minimum sustainability criteria – ie the Renewable Energy Use Directive (RED) – so the level of sustainability compared to fossil fuels should be reflected in the rather lower minimum tax rates than those rates proposed. In this respect, flexibility to exempt or lower tax on certain fuels should apply to any biofuel that achieves the RED sustainability targets.
  4. Natural gas would suffer a big immediate hike in tax rates from 2023 and the impact on fleet operators’ total cost of ownership (TCO) would be large. We would suggest a more flexible time-based approach for fossil-based natural gas.
  5. We are cautious about removing the flexibility for EU member states to apply lower taxes to certain fuels used for the same purpose.
  6. Taxes on electricity used to recharge vehicles should be no higher than taxes on electricity used for domestic consumption. If member states were to follow the ranking of taxes applied to fuels in Table A of Annex I, they should still be able to ensure that electricity for transport remains a low tax rate even if they were to decide to increase taxes on low carbon fuels, renewable fuels from non-biological origin, advanced sustainable biofuels and biogas which, in the proposal, have the same minimum tax rates as electricity (at least at 2023, which is the Commission proposal).
  7. Relating to the proposal in RED on system integration (to which ACEA is rather cautious), the ETD should at least consider tax refunds for customers and operators for electricity bought and stored in vehicle batteries and which may be fed back into the grid.
Within the ‘Fit for 55’ climate package, the Energy Taxation Directive (ETD) is one of the key elements of an effective policy framework that supports and enables the transition to carbon neutrality.

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Vehicle types All vehicles
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