Agreement on excise duties for fuel products

ECOFIN reaches political agreement to allow Member States to exempt or apply lower rate of excise duty to certain categories of fuels

The ECOFIN Council reached a political agreement to allow Member States to exempt or apply a lower rate of excise duty to certain categories of fuels (e.g. environmentally-friendly) or categories of users (e.g. public transport).

The agreement is based on a compromise text by the Swedish Presidency and foresees an extension ofderogations for 2 yearsin the case of road haulage for Italy, the Netherlands and France, and forsix yearsin the case of all other existing derogations.

Commissioner Bolkestein expressed his satisfaction concerning the agreement and stressed that the Decision means that a majority of the derogations (all but the 37 for which authorisation expired 31.12.00) would now be subject to a periodic review (after six years) instead of being granted 'ad infinitum'.

The Commission still considers that the most effective means of reducing distortions of competition between Member States arising from the current large differences in rates of excise duty on fuels would be a closer alignment of standard excise duty rates. This is the aim of the1997 energy tax proposal. The Swedish Presidency has indicated that it will restart the debate on this proposal.

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