headline verdana bold · 10.30 –10.45 introduction to the study and presentation of the panel...

Headline Verdana BoldEU Commission Study on the Energy Tax Directive Expert Panel 15 May 2018

© 2018 Deloitte Belgium 2

Workshop Agenda

Timing Topic

10.00 – 10.15 Welcome coffee

10.15 – 10.30 Tour de table

10.30 – 10.45 Introduction to the study and presentation of the panel objectives and overall preliminary findings

10.45 – 11.00

Presentation of the preliminary findings relevant to the following questions:

• To what extent does the ETD contribute to a smooth functioning of the Single Market?

• How has the ETD affected the international competitiveness of EU businesses?

• Is there any evidence that, in certain cases, differences in national levels of taxation could distort competition in

the internal market?

• Is the current EU legal framework still adequate?

11.00 – 12.00 Break-out sessions part 1

12.00 – 12.30 Plenary discussion

12.30 – 13.30 Lunch

13.30 – 13.45

Presentation of the preliminary findings relevant to the following questions:

• Is there sufficient knowledge on the ETD?

• Does the ETD bring considerable administrative burden or compliance costs?

• To what extent does the scope of the ETD still match current needs?

• How relevant is the ETD for stakeholders?

• How does the ETD interact with other EU policy objectives?

• Are the minimum levels of taxation, the tax exemptions and the tax reductions still fit for purpose?

13.45 – 15.00 Break-out sessions

15.00 – 15.15 Coffee break

15.15 – 16.00 Conclusions in plenary session

3

Introduction to the study

Background


Background

The Energy Tax Directive (ETD) aims at ensuring that the single market operates smoothly,avoiding double taxation and preventing distortion of trade and competition betweenenergy sources and consumers and suppliers which could result from considerable differences innational tax rates.

The ETD sets minimum levels of taxation on energy products and electricity and defines whatexemptions are allowed and under which conditions.

2 studies carried out by Deloitte:

Study on the technical and legal aspects

Study in support of the REFIT evaluation in relation to the minimum levels of taxation and

special tax schemes

5


Objectives and methodology


Objectives of the study

Compile evidences and assess the effectiveness, efficiency, coherence, relevance and

EU added value of the minimum levels of taxation and study the effect of optional tax

schemes on the internal market

Identify:

o The extent to which minimum levels of taxation applied to motor fuels, heating fuels,

and electricity have actually achieved the expected effect

o Problems in relation to the minimum levels of taxation

o The level and importance of market distortions resulting from differences in the

national levels of taxation

o The completeness of the legal framework as regards the taxation of energy use

o The scope for simplification of the rules

o Possible synergies or potential collisions with other policy tools

o Regulatory benefits and savings


Objectives of the study


Intervention Logic of the ETD

Needs

Need for clearer

framework for

energy taxations

schemes

Need for open

market free of

distortion

Need for

supporting other

EU policies (e.g.

environment,

labour, energy,

transport, etc.)

General

objectives

Proper

functioning of the

Internal Market

Specific

objectives

Reduce

distortions cause

by divergent

national schemes

Remove

competitive

distortions

between mineral

oils and non-

legislated

products used in

transport, for

heating and

electricity

Activities/ac

tions

Lay down

minimum levels

of taxation at EU

level for most

energy products

Set mandatory

exemptions to

Member States to

support

international

competitiveness

of EU businesses

Outputs

Clear framework

for energy

taxation in the

EU

Harmonisation of

taxation of

energy in the EU

Increased use of

renewables

(biofuels)

Impacts

Contribute to EU

common market

for energy

Consistency with

other EU policies

(e.g.

environment,

labour, energy,

transport, etc.)

Support the

achievement of

other EU policies

Promote the use

of renewables

(biofuels)

Support

competitiveness

of EU businesses

Allow for optional

exemptions and

differentiation in

national tax rates

under specific

circumstances /

conditions

Competitive EU

businesses in the

international

market


Methodology

In-depth interviews with

tax administrations and economic operators in 8

selected Member States

Web survey for

economic operators

Data request and web survey for 28 national tax administrations

Desk research Expert panel

Interviews with EU sector

federations (esp. agriculture,

biofuels, CHP, metallurgical processes,

chemical industry, road transport)

10

Expert panel Objectives


Expert panel objectives

Present the study to a number of experts the EU Energy Taxation policy 1

Gather feedback based on the interaction between participants

2

Assess the preliminary findings of the study3

Use contributions in final report 4

12


Preliminary findings



The scope of the ETD remains relevant to the current energy market, although some stakeholders would like to see changes in the taxation base to include factors such as energy content.

The ETD is not aligned with EU climate and environment policy objectives as defined in subsequent Directives.

Differences in national levels of taxation distort competition in the internal market in certain sectors.The EU legal framework for energy taxation needs updating.

There is sufficient knowledge on the ETD at national level but more guidance from the European Commission would be needed.No significant administrative burden stems from ETD provisions.

The ETD has contributed to some harmonisation, however it has not created a level playing field in the European Union. Minimum rates and special tax schemes have various impact on the competitiveness of EU businesses. 1

2

3

4

5


Components of energy prices

Retail price of energy

(electricity, natural gas, oil)

Energy Network Taxes & Levies

Wholesale Retail Transmission DistributionGeneral

budget

Specific

policies

(energy,

environment,

climate, etc.)


Share of energy price components (2008 – 2015)

Electricity

Households, Consumption band DC (from 2 500 to 5 000 Kwh)

Source: Prices and Costs of EU energy (2016), Data from Commission

Industry, Consumption band ID (from 2 000 to 20 000 Mwh)



Natural gasHouseholds, Consumption band D2 (from 20 to 200 GJ)


Industry, Consumption band I3 (from 10 000 to 100 000 GJ)



Oil products



• The share of taxes and levies is higher for domestic than for industrial use, thanks to exemptions andrecovery of industrial costs.

• General tendency towards increase of the taxes and levies components over time and for all energyproducts, but with large differences among Member States, e.g. electricity, from 24% in 2008 to 32% in2016 for households (EU average) and from 6% in 2008 to 17% in 2016 (EU average).

• Taxes and levies are particularly high on automotive diesel and gasoline, with taxation on diesel usuallyhigher than taxation of gasoline (and everywhere higher than the minimum level set in the ETD).

• Taxation of heating oil registers more variation among Member States.

18

Breakout sessions


Working groups

GROUP 1 GROUP 2

Claudia Vella Casagrande – ECSAPhilippe Morin – IATA Acacia Smith – IRU James Nix – Transport & Environment Paris Sansoglou – EuDALaurentia Predescu – CEZ RomaniaSvenja Otto – Fuels EuropeInga Toelke – UPEI Tristan Suffys – Eurofuel

Eric Drésin – CETTARStella Kirabo – CembureauNicola Rega – CEPI Jean-Philippe Perrot – IFIEC Samuel Maubanc – AEGPLJaume Loffredo – AEGPLAlexandra Tudoroiu-Lakavičė – COGENRobert Jambrich – EurelectricJesse Scott – EurogasConcepcion Valencia Serrano – GasNatural Fenosa


Morning session

Questions and preliminary findings – Effectiveness and EU added value

• To what extent does the ETD contribute to a smooth functioning of the Single Market?

• How has the ETD affected the international competitiveness of EU businesses?

The minimum harmonisation of the ETD has enabled to achieve (part of) its objectives (e.g. create a

minimum level playing field through the minimum rates of taxation), however, today the minimum rates of

taxation are generally considered too low to allow for sufficient policy room (e.g. considering the interaction with

State aid or considering the competitive disadvantage of increasing rates compared to other EU Member States).

The variety of tax reductions and exemptions affects the effectiveness of the ETD (e.g. optional reductions /exemptions affect the competition in the internal market, reductions / exemptions affect the environmental andclimate policy objectives).

The objectives of the ETD are diverse and some of the objectives have gained importance since itsintroduction (in particular but not limited to climate and environmental considerations).


Morning session

Questions and preliminary findings – Effectiveness and EU added value

• Is there any evidence that, in certain cases, differences in national levels of taxation could distort

competition in the internal market?

• Are the minimum levels of taxation, the tax exemptions and the tax reductions still fit for purpose?

Today’s added value of the ETD is very limited and the instrument does not live up to the current standards because ofits outdated character (e.g. the G20 agreed to phase out fossil fuel subsidies by 2020, while the ETD allows for the policyroom to provide for a beneficial treatment of fossil fuels) – affecting in the end the adequacy of the instrument.

The ETD has had a different effect in the EU Member States (new vs. old), also due to the application of the pre-existinglegal framework (Mineral Oils Directive).


Afternoon session

Questions and preliminary findings – Efficiency, Relevance and Coherence

• Is there sufficient knowledge on the ETD?

• Does the ETD bring considerable administrative burden or compliance costs?

The overall knowledge base regarding energy taxation is focused on the national implementation, and generally this

knowledge is of high standards (both with the authorities and with the economic operators); due to the nature of the EU

instrument (a directive), economic operators are not always aware of the EU origin of certain national implementing

provisions.


Afternoon session

Questions and preliminary findings – Efficiency, Relevance and Coherence

• To what extent does the scope of the ETD still match current needs?

• How relevant is the ETD for stakeholders?

As a result of the progressing and continuously applied EU State aid framework, granting some of the optional tax

reductions and exemptions have become unviable in practice (especially if the General Block Exemption Regulation

(GBER) or de minimis rules do not apply, e.g. when the ETD allows to go below the minimum levels of taxation as in Art.

17(2)).

• How does the ETD interact with other EU policy objectives?

• Is the current EU legal framework still adequate?

Energy taxation is part of a broader framework, and there is an interplay with e.g. the Renewables Directive, the ETS

Directive, the Alternative Fuels Infrastructure Directive, the Energy Performance of Buildings Directive, the Energy

Efficiency Directive, the Electricity Market Directive and Regulation – considering the ETD dates back to 2003 (which is prior

to most of these instruments), further alignment is needed (both on the wording and on the (dis)incentives provided)

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© 2018 Deloitte Belgium

headline verdana bold · 10.30 –10.45 introduction to the study and presentation of the panel...

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