Commission plans to raise environmental taxes

A policy green paper on the proposed taxes - including rasing duty on diesel fuel -- will be unveiled 28 March by environment commissioner Stavros Dimas and taxation commissioner Laszlo Kovacs. The proposals mark another step in the Commission's efforts to slow down the growth of greenhouse gas emissions in the bloc through a series of policies. Earlier this month EU member states agreed to set targets to reduce CO2 emissions and increase the use of renewable energy. In a statement at a conference on environmental taxes last week, Kovacs said he would use the green paper to move ahead on energy taxes at EU level. Uniform environment taxes across the bloc could push businesses and consumers towards a more efficient use of resources while allowing competition on a level playing field, he said. Kovacs said he would propose raising the EU minimum duty on commercial diesel fuel, partly to prevent truckers from taking detours to a member state where fuel is cheaper. One proposal would increase step by step the minimum excise duty rate on commercial diesel, which is currently €302 per 1000 litres. He plans to increase it to €330 by 2010, and to €359 by 2012 to make it equal with the current rate on unleaded petrol. Minimum rates on both types of fuel are to be increased to €380 by 2014. The proposal if adopted by the Council will reduce 'fuel tourism', caused by the current excessive differentials in taxation, where excise duty on commercial diesel is €470 in Germany but €278 in Luxembourg and only €220 in Bulgaria, he told the conference. "Consequently truck drivers alter their routes in order to benefit from low tax rates applied in certain member states, which results in millions of extra kilometres and huge emission of CO2 and other negative impacts on the environment,"​ he said. Another proposal would seek to harmonise the structure of passenger car taxes to introduce an environmental element. The proposal would integrate the registration tax with the annual circulation tax, he said. He noted energy taxation is currently the major environmental tax in his portfolio and he intends to develop it further. "In particular compared to the current situation, energy taxation would be more effective EU-wide and would also be easier to apply alongside other economic instruments, in particular the emission trading scheme with a fairer sharing of costs of our policies between different parts of the society,"​ he said. "Energy taxation should more directly favour more environmental friendly energy sources, notably renewables."​ Transport accounts for about 19.3 per cent of the CO2 emissions of the European Union, the Commission estimates. Germany currently holds the six month rotating EU presidency. .