EU energy tax seen as crucial to fulfil promises

Date: 13/05/1999

By Renée Cordes

IF THE EU is to abide by the pledges it made 18 months ago in Kyoto to cut greenhouse gas emissions, it will have to put its money where its mouth is and support cleaner energy.

That will be easier said than done, given strong resistance from some member states and sectors of industry to the idea of taxing energy consumption.

But that has not deterred Acting Environment Commissioner Ritt Bjerregaard from turning up the pressure on governments to support the latest compromise proposals for an EU energy tax.

” Most of the action must be taken by member states, but we also can do something at the EU level,” said an aide. “A number of countries are not happy with the latest proposal, but it may be the best we can get.”

Under the newest version of the European Commission's proposals, member states would extend existing minimum rates of excise duty on mineral oils to other products, including electricity, coal and natural gas. In addition, minimum rates for mineral oils set six years ago would be increased in three phases until 2002, taking inflation into account.

Bjerregaard's plea for governments to sign up to the plan is unlikely to cut much ice with those member states most fiercely opposed to the proposals, led by Spain.

As a result, some environmental groups say a more realistic approach would be to do far more to support the use of solar and other forms of renewable energy, where environmental campaigner Karl Mallon sees as a “major policy void”.

” We strongly support an energy tax, but there just seems to be so much mixed attention in terms of whether that is going to go through,” said Mallon, an energy specialist with Greenpeace International in Amsterdam.

The Commission has already taken steps to boost the use of renewables, with the aim of ensuring that they meet 12&percent; of the EU's total energy needs by the end of the next decade. Only last week, it launched a promotional campaign aimed at attracting more than €30 billion of investment in renewable energy projects between now and 2003.

However, the Commission is growing increasingly worried that Europe may not be able to meet the binding commitments it has entered into without further belt-tightening by industry.

With this in mind, it is also inviting manufacturers to discuss voluntary accords on boosting energy efficiency, similar to the agreement to reduce carbon dioxide emissions negotiated with European car-makers last year.

The idea has, however, received a mixed response. Claude Culem, head of energy policy for the European Chemical Industry Council (CEFIC), said industry would be willing to “do something”, but added: “We are expecting something in return, possibly linked to an exemption from the proposed directive on the taxation of energy sources.”