Proposal for a COUNCIL DECISION authorising France to apply a differentiated rate of excise duty to certain mineral oils, when used for specific purposes, in accordance with the procedure provided for in Article 8(4) of Directive 92/81/EEC

(presented by the Commission)

EXPLANATORY MEMORANDUM

Under Article 8(4) of Council Directive 92/81/EEC on the harmonisation of the structures of excise duties on mineral oils [1], the Council, acting unanimously on a proposal from the Commission, may authorise any Member State to introduce exemptions from, or reductions in, excise duties on grounds of specific policy considerations.

[1] OJ L 316, 31.10.1992, p. 12. Directive as last amended by Directive 94/74/EC (OJ L 365, 31.12.1994, p. 46).

The French authorities have informed the Commission that they wish to introduce a differentiated rate of duty on diesel fuel used in local public passenger transport vehicles. Public transport is more environmentally friendly than transport in private vehicles, and the differentiated rate will promote the use of public transport. This will be particularly significant in improving air quality in the urban environment. The differentiated rate of duty will be implemented by an annual refund system, commencing on 1 January 2001, that will partly compensate for future annual rises in duty on diesel fuel.

France therefore requests authorisation to apply a differentiated rate of excise duty to diesel fuel used in local public passenger transport vehicles from 1 January 2001. The differentiated rates will respect the minimum rates of excise duty set out in Article 5 of Directive 92/82/EEC [2].

[2] OJ L 316, 31.10.1992, p. 19. Directive as last amended by Directive 94/74/EC (OJ L 365, 31.12.1994, p. 46).

In accordance with Directive 92/81/EEC, the other Member States have been informed of this request.

Directive 92/81/EEC provides for the Commission to review such exemptions and reductions periodically. If the Commission considers that they may no longer be applied because they distort competition or the operation of the internal market or are incompatible with Community policy on protection of the environment, it is to present appropriate proposals to the Council.

In any event, on the basis of a proposal from the Commission, this derogation must be reviewed no later than 31 December 2002 when the authorisation granted by this Decision expires. The Council will review the situation on the basis of a Commission Proposal and decide whether the authorisation granted under Article 1 of this Decision should be withdrawn, modified or confirmed.

Proposal for a COUNCIL DECISION authorising France to apply a differentiated rate of excise duty to certain mineral oils, when used for specific purposes, in accordance with the procedure provided for in Article 8(4) of Directive 92/81/EEC

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to Council directive 92/81/EEC of 19 October 1992 on the harmonisation of the structures of excise duties on mineral oils [3], and in particular Article 8(4) thereof,

[3] OJ L 316, 31.10.1992, p. 12. Directive as last amended by Directive 94/74/EC (OJ L 365, 31.12.1994, p. 46).

Having regard to the proposal from the Commission,

Whereas:

(1) Pursuant to Article 8(4) of Directive 92/81/EEC, the Council, acting unanimously on a proposal from the Commission may authorise any Member State to introduce exemptions or reductions in the excise duty charged on mineral oils for specific policy considerations.

(2) Because public transport is more environmentally friendly than transport in private vehicles, the French authorities have informed the Commission that they wish to introduce a differentiated rate of duty on diesel fuel used in local public passenger transport vehicles by refunding a proportion of future annual rises in duty on diesel fuel.

(3) The other Member States have been informed thereof.

(4) The Commission and all the Member States accept that the application of differentiated rate of excise duty on diesel fuel used in local public passenger transport vehicles will not give rise to distortions of competition or hinder the operation of the internal market.

(5) This decision does not prejudice the outcome of any future state aid procedures that may be undertaken in accordance with Articles 87 and 88 of the Treaty, nor does it override the requirement for Member States to notify instances of potential state aid to the Commission under Article 88 of the Treaty.

(6) The Commission regularly reviews reductions and exemptions to check that they do not distort competition or the operation of the internal market or are incompatible with Community policy on protection of the environment.

(7) France has requested authorisation to introduce the differentiated rate of duty on diesel fuel used in local public passenger transport vehicles from 1 January 2001.

(8) The Council will review this decision on the basis of a proposal from the Commission no later than 31 December 2002 when the authorisation granted by this decision expires,

HAS ADOPTED THIS DECISION:

Article 1

In accordance with Article 8(4) of Council Directive 92/81/EEC, France is authorised to apply a differentiated rate of excise duty on diesel fuel used in local public passenger transport vehicles from 1 January 2001 until 31 December 2002 provided that the differentiated rates are in accordance with the obligations laid down in Council Directive 92/82/EEC of 19 October 1992 on the approximation of the rates of excise duties on mineral oils [4], and in particular the minimum rates laid down in Article 5 thereof.

[4] OJ L 316, 31.10.1992, p. 19. Directive as last amended by Directive 94/74/EC (OJ L 365, 31.12.1994, p. 46).

Article 2

This Decision is addressed to France.

Done at Brussels,

For the Council

The President