The Commission proposed, on 14 March 2007, to raise the minimum tax on commercial diesel fuel by nearly 20% over the next seven years in two steps. In 2012, excise duties would be lifted from the current €302 per 1,000 litres to €359 – bringing it in line with the current minimum tax on petrol – and, in 2014, the tax would be raised to €380 per 1,000 litres.
The proposal has two major aims:
- To create equal conditions for competition among European road-haulers and coach operators.
- to help to protect the environment by:
- Increasing the overall levels of diesel fuel taxation (in most member states), which is expected to serve as an incentive for efficient fuel use.
- Levelling out differences between member states, so that drivers stop making detours to fill up in countries where excise duty is low, resulting in an increase in greenhouse-gas emissions. Such fuel tourism is also a problem for those states that impose higher levels of duty than bordering countries. It is said to have cost Germany - which borders cheap-fuel countries such as the Czech Republic and Poland - some €1.9 billion in 2004.
- Abolishing the fiscal advantage of diesel over petrol fuel cars, leading to a reduction in particulate and NOx emissions, which are at least three times higher with diesel than with petrol engines. Indeed, the proposal foresees that in a given member state, unleaded petrol and non-commercial diesel used by private cars cannot be taxed less than commercial diesel.
But the plan is set to face stiff opposition from those member states with low tax levels, such as Luxembourg and the central and eastern European countries, as it would reduce both government revenues and the competitive edge of their road haulage business.
Transition phases were agreed by the Commission to help countries where diesel is particularly cheap, with the EU's poorest members, Bulgaria and Romania, set to benefit from the longest periods.
However, the measure could still be blocked as tax harmonisation proposals require unanimity.