European Environmental Bureau revives ecotax debate

The European Environmental Bureau (EEB) launched an 18-month campaign on environmental fiscal reform (EFR) on Tuesday 27 November. The campaign was presented in Brussels by former Greek finance minister and former EU Environment Commissioner Yannis Paleocrassas. It will run for one and a half year in the Member States and accession countries.

The EEB campaign has four major objectives:

  • to realise by 2010 a 10 per cent shift in taxation from taxing labour to taxing the use of natural resources, at the EU and national levels (with fiscal neutrality, i.e. no overall increase in revenue);
  • to remove all environmentally adverse subsidies;
  • to strengthen policies of energy saving and energy efficiency;
  • to establish fiscal incentives for environmental protection.

 

The European industry has opposed the idea of ecotaxes, pointing to the fact that these taxes would undermine European companies' competiveness, would not be fiscally neutral in most Member States and would be ineffective from the environmental point of view.

 

The draft proposal for the introduction of an EU-wide energy tax was introduced by Commissioner Monti in 1997. The Directive was intended to establish minimum levels of taxation for a wide range of fuels with a gradual increase over time. It would reduce the differences in energy taxation within the EU and create room for further ecological tax reforms in the EU's more progressive countries. Although the proposal was supported by the majority of the Member States, it was blocked by a minority of countries because of the unanimity rule on taxation issues.

 

The Belgian Presidency is preparing a last attempt to get an agreement on the 1997 Taxation of Energy Products directive.

 

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