Proposal for a Council Directive restructuring the Union framework for the taxation of energy products and electricity (recast)

Author (Corporate)
Series Details COM (2021) 563
Publication Date 14/07/2021
Content Type , ,


Legislative initiative tabled by the European Commission on 14 July 2021, revising the so-called Energy Taxation Directive (ETD). This is a text with EEA relevance.

Further information:

The legislation framework for the taxation of energy products and electricity was restructured by Council Directive 2003/96/EC, which sought to ensure the proper functioning of the European Union's (EU) internal market. However, since the adoption of the ETD in 2003, the underlying climate and energy policy framework has changed radically.

The European Green Deal was presented in December 2019 and it set the goal of making Europe the first climate-neutral continent by 2050. The European Climate Law enshrined in binding legislation the EU's commitment to climate neutrality and the intermediate target of reducing net GHG emissions by at least 55% by 2030. The Fit for 55 Package adopted in July 2021 aimed delivering on the objectives, which included a commitment to review the ETD focusing on environmental issues and in order to ensure that energy taxation is aligned with climate objectives.

The ETD was evaluated by the European Commission in 2019. Subsequently, the Council of the European Union adopted conclusion whereby it acknowledged the role of energy taxation in providing economic incentives for a successful energy transition. As a result, the Commission was invited to revise the legislative framework. The existing Act raised issues as regards its disconnection from climate and energy efficiency objectives, as well as its shortcomings regarding the functioning of the internal market.

This draft law seeks to provide an adapted framework contributing to the latest targets and objectives, preserving and improving the internal market, and preserving the capacity to generate revenues. The proposal also takes into account the social dimension.

The proposed Council Directive was adopted by the European Commission on 14 July 2021, as part of the so-called Fit for 55 legislative package.

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Commentary and Analysis
KPMG: Insights, August 2021: Energy Taxation Directive
Airlines for Europe (A4E): Position Papers, 20/08/2021: Review of the EU Energy Taxation Directive
S&P Global: Market Intelligence: Blog, 26/08/2021: Green taxes expected to play greater role in EU increasing policy and protest risks
Heinrich Böll Foundation: Analysis, 13/09/2021: The revision of the Energy Taxation Directive could underpin a fair and green tax reform in Europe
Confederation of Swedish Enterprise: Comment, 01/11/2021: The Confederation of Swedish Enterprise on the EU Energy Taxation Directive (ETD)
Forum Ökologisch-Soziale Marktwirtschaft: Feedback, 15/11/2021: Reform Proposal of the EU Commission on the EU Energy Tax Directive
European Parliamentary Research Service (EPRS): Briefing, 19/01/2022: Revision of the Energy Taxation Directive: Fit for 55 package
European Automobile Manufacturers’ Association (ACEA): Position paper – Energy Taxation Directive (27 January 2022)
European Biogas Association (EBA): Recommendations, February 2022: The revision of the Energy Taxation Directive should quickly send a strong and consistent price signal for renewable gases
European University Institute (EUI): Florence School of Regulation: Events, 02/03/2022: The revision of the Energy Taxation Directive
Smart Energy Europe: Joint Statement on the Energy Taxation Directive (ETD) (29 March 2023)

EurActiv, 20/05/2023: Energy Taxation Directive: Europe’s key climate law stuck in a quagmire
Politico, 26/07/2023: The climate law the EU (conveniently) forgot

EUR-LEX: SWD(2021)640: Staff Working Document accompanying the Proposal - Subsidiarity Grid
EUR-LEX: SWD(2021)641: Staff Working Document accompanying the Proposal - Impact Assessment Report
EUR-LEX: SWD(2021)642: Staff Working Document accompanying the Proposal - Executive Summary of the Impact Assessment Report
European Parliament: Legislative Observatory: Procedure File for Proposal on Energy Taxation Directive (2021/0213(CNS))
European Parliament: Legislative Train Schedule: Revision of the energy taxation directive (ETD)
European Commission: Topics: Energy Taxation
European Commission: Press Release, 14/07/2021: European Green Deal: Commission proposes transformation of EU economy and society to meet climate ambitions
European Commission: Revision of the Energy Taxation Directive (ETD): Questions and Answers (14 July 2021)

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