Press Release: State aid: Commission authorises proposed Danish CO2 tax reductions under certain conditions

The European Commission cleared under EC Treaty state aid rules a Danish project to grant CO2 tax relief to companies covered by the EU’s Emissions Trading Scheme (EU ETS), subject to conditions. After an in-depth investigation, opened in September 2006, the Commission concluded that if the proposed full tax exemption would be implemented, some of the environmental objectives which a tax on energy products aims to achieve would be lost. The Commission also had concerns that a full tax exemption would distort competition by increasing tax differentiations in an area where the EU has harmonised taxes and set tax minima to create a level playing field between companies. The Commission therefore approved the measure under the condition that it is amended so that all concerned companies pay an energy tax respecting at least the harmonised minima tax levels.