Last gasp for Sweden to revive interest in energy tax

Date: 19/04/01

WITH only two months to go at the EU helm, Sweden is attempting to revive interest in Union-wide energy taxes.

Commissioner Mario Monti called for harmonised minimum levels of tax on most basic energy products in 1997, when he was the EU's single market chief. Held up mainly by Spanish opposition, the proposal has been gasping for breath ever since.

Now, however, Stockholm is keen to get the ball rolling again amid signs that Spain is open to compromise.

The move also comes as the EU faces increasing pressure to meet climate change commitments agreed at Kyoto in 1997.

The EU pledged to reduce emissions of six key greenhouse gases to 8% below 1990 levels by 2012, but environment Commissioner Margot Wallström has warned that unless drastic measures are taken, the EU won't be able to keep its promise.

At a working group meeting called by Sweden in March, member states' experts talked very generally about energy taxes and market liberalisation, without going into detail about precise rates and how they would work in practice. A follow-up meeting is planned early next month.

Diplomats say there is little likelihood the Swedes will be able to wrap up a deal within the next two months.

But Belgium, which takes over the EU's presidency in July, has already promised to move forward with the dossier.

While environmental campaigners are encouraged that the issue is back on the table, many fear that it will remain there for a long time to come.

"I think the signs are not necessarily particularly good for immediate progress at EU level," says Rob Bradley, an energy specialist at Climate Network Europe. He also fears that the final version may be so watered-down as to be ineffective.

But he's encouraged that more and more member states - most recently France and Germany - are introducing energy taxes at national level. Eventually, Bradley says, it will be in industry's interest to push for harmonised rates across the EU.

Daniel Cloquet of EU employers' organisation UNICE disagrees, saying that countries are beginning to realise that these measures may do more harm than good. He says the organisation is spelling out its concerns to the Swedes.

"There are many reasons for not going down the road of energy taxes," he says, adding that much has already been achieved in terms of voluntary industry commitments to improve energy efficiency.

Article forms part of a survey on the environment.