Commissioners target environment taxes

The European commissioners for taxation and the environment said this week that they would push for greater use of taxation to solve problems including pollution and climate change.

The two were speaking on Monday (19 March) at the first meeting of a European Commission-led Brussels Tax Forum, which took ‘Taxation for sustainable development’ as its theme.

Taxation Commissioner László Kovács said that this had been chosen as the most appropriate tax issue "because of its crucial relevance to issues currently on top of the policy agenda".

In particular, he said, tax policies would be needed to meet energy and climate change targets agreed by EU leaders at a summit meeting earlier this month (8-9 March). Governments committed themselves to 2020 targets for cutting carbon dioxide and increasing the use of renewable energy and biofuels.

The EU already has common rules for the taxation of energy consumption. Kovács has also proposed increasing the minimum rate of diesel tax across Europe and replacing an existing car registration tax with a carbon dioxide emission-based system.

"What I would like to concentrate on during the second half of my mandate as EU commissioner for taxation," he said on Monday, "is to develop the energy tax instrument further."

The Commission has in the past failed to win backing for most EU-wide tax measures, which need unanimous support from all member states.

Kovács said he believed the mood was changing. His commitment to make more use of EU energy taxes, he said, was in line with summit calls for improved use of "all relevant Community instruments" to meet EU energy and climate change objectives.

Speaking at the same event, Environment Commissioner Stavros Dimas said member states could agree to make more use of environmental taxes without agreeing to harmonise national tax policies.

National market-based instruments, including taxation, already existed to protect the environment, he said, mentioning an Irish tax on plastic bags and a UK congestion charge. Belgium is waiting for Commission approval of a proposed national packaging tax on aluminium foil and plastic carrier bags.

The Commission has to make sure market instruments applied by one member state do not favour national products over imports. German plans to introduce a deposit system for drinks packaging were ruled illegal by the EU courts in 2004, following Commission complaints that the plans would hinder the free movement of goods.

The best and simplest way forward, said Dimas, would be to develop a list of "best practice" green taxation measures, and encourage member states to learn from each other.

A Commission green paper on taxation and environmental policies to be published next Wednesday (28 March) will, said the commissioner, ask governments to discuss how they have used and could use taxation to tackle five environmental problems.

These will be: water shortages, waste, air pollution, biodiversity loss and energy use.

"There is no point asking member states to re-invent the fiscal wheel," said Dimas. "In all these areas we will ask how we can go forward together."

The European commissioners for taxation and the environment said this week that they would push for greater use of taxation to solve problems including pollution and climate change.