COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 10.05.1995 
COM(95) 172 final 
Amended proposal for a 
COUNCIL DIRECTIVE 
introducing a tax on 
carbon dioxide emissions and energy 
(presented by the Commission pursuant to Article 189 a (2) 
of the EC Treaty) 
EXPLANATORY MEflTORANDPM 
The proposal for a Council Directive 
COM(92) 226 introducing a tax on 
carbon dioxide emissions and energy,1 
which forms part of the overall strategy 
for stabilizing carbon dioxide emissions 
in the Community at 1990 levels by the 
year 2000, has not yet been adopted. 
The Economic and Social Committee 
gave its opinion on 24 February 1993.2 
Nevertheless, the discussions within the 
Council indicate that it is unlikely to be 
adopted in the short term. 
At its meeting in Essen on 9 and 
10 December the European Council 
took note "of the Commission's intention 
of submitting guidelines to enable every 
Member State to apply a COj/energy tax 
on the basis of common parameters". 
In order to comply with this 
commitment, the Commission is 
proposing to amend its existing proposal 
in order to incorporate elements of 
flexibility which will overcome the 
obstacles which have emerged during the 
Council discussions. 
To this end, the Commission is 
proposing that the implementation of a 
harmonized tax be preceded by a 
transitional period during which the 
Member States, while respecting a 
harmonized tax structure, are free to set 
the tax rates product by product. In 
addition, in order to help the Member 
States to take the measures necessary to 
attain the objectives of reducing carbon 
dioxide emissions, the Commission 
considered it appropriate to provide that 
the rates set in its original proposal, and 
revised, should be target rates towards 
which the Member States endeavour to 
maice uieir uomestic rates converge in 
the medium term. Since the framework adopted for the tax 
draws directly on the existing provisions 
on the general arrangements for products 
subject to excise duty and on the holding, 
movement and monitoring of such 
products, and on the harmonization of 
the structures of excise duties on mineral 
oils, the Commission also considered it 
preferable to delete the original specific 
provisions and to refer as much as 
possible to the relevant provisions of the 
excise duty Directives. 
This approach does away with the need 
for certain safeguard clauses such as the 
conditionality and the temporary 
suspension of the tax originally 
proposed, in so far as the choice of the 
rate of taxation is left to the Member 
States, according to their needs and 
possibilities. 
In addition, the wish to safeguard the 
competitiveness of Community firms 
should encourage Member States who 
wish to apply a tax to use the revenue it 
generates to reduce other charges, 
particularly those on labour, in 
accordance with the guidelines of the 
White Paper on growth, competitiveness 
and employment. 
OJNoC 196, 3.8J992, p. 1. 
OJNoC 108, 19.4.1993, p. 20. 
A <^U 
Amended proposal for a 
COUNCIL DIRECTIVE 
INTRODUCING A TAX ON 
CARBON DIOXIDE EMISSIONS AND ENERGY 
Original proposal 
THE COUNCIL OF THE EUROPEAN 
COMMUNITIES, 
Having regard to the Treaty establishing 
the European Economic Community, and 
in particular Articles 99 and 130s thereof, 
Having regard to the proposal from the 
Commission, 
Having regard to the opinion of the 
European Parliament, 
Having regard to the opinion of the 
Economic and Social Committee, 
Whereas the greenhouse effect is a 
problem that should be resolved in an 
efficient and coherent manner; 
Whereas the establishment and functioning 
of the internal market necessitates free 
movement of goods, including those 
subject to specific duties; 
Whereas a number of Member States have 
already introduced, or are planning to 
introduce, taxes on carbon dioxide 
emissions and the use of energy; whereas a 
harmonized approach is needed to ensure 
the functioning of the internal market; Amended proposal 
THE COUNCIL OF THE EUROPEAN 
UNION, 
Having regard to the Treaty establishing 
the European Community, and in 
particular Articles 99 and 130s thereof, 
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Whereas Article 1 (1) in fine of Directive 
92/12/EEC of 25 February 1992* excludes 
from the arrangements laid down by that 
Directive taxes established by the 
Commumty; 
Whereas the Community's action 
programmes for the environment adopted 
in 19732 9 19773 19g34 i9875 m^ i9926 
stress the importance of reducing and 
preventing air pollution; whereas the 
1987-92 environmental action programme 
stresses the importance of concentrating 
Community action on the priority area of 
reducing air pollution at source; 
Whereas, at its meeting in Dublin in June 
1990, the European Council pressed for 
the adoption, at the earliest possible 
opportunity, of targets and strategies for 
limiting emissions of greenhouse gases; 
whereas carbon dioxide emissions are the 
major component of such gases; 
Whereas, at its meeting on 29 October 
1990, the Council concluded that 
aggregate carbon dioxide emissions should 
be stabilised at 1990 levels by the year 
2000; 
Whereas the global dimension of the 
greenhouse effect has been recognised; 
whereas this phenomenon should be 
tackled at that level; unchanged 
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1 OJ No. L 76, 23.3.1992, p. 1 
2 OJ No. C 112, 20.12.1973, p. 1 
3 OJNo. C 139, 13.6.1977, p.l 
4 OJ No. C 46, 17.2.1983, p.l 
5 OJ No. C 328, 7.12.1987, p.l 
6 COM (92) 23 final, 30.3.1992 
Whereas the introduction of a carbon 
dioxide/energy tax is an essential element 
of an overall strategy for improving the 
efficient use of energy and bringing about 
changes in the use of forms of energy in 
favour of less-polluting sources; 
Whereas, in order to safeguard this 
competitiveness of Community industry, 
the tax arrangements cannot be applied in 
the Member States until such time as other 
member countries of the OECD have 
brought in a similar tax or measures 
having an equivalent financial impact; 
Whereas, since the tax is to be established 
at Community level, it is necessary to 
determine the territory to which it will 
apply as well as the system of taxation for 
the products covered, the rules relating to 
the holding and movement of such 
products, and the tax rates and exemptions 
or reduced rates at Community level; 
Whereas use of the existing administrative 
structures and application of the definition 
of territory applicable in the case of 
harmonised excise duties will ease the 
burden on the administrations and firms 
without giving rise to any distortions of 
competition; 
Whereas the tax must be levied on fossil 
energy sources as regards its objective of 
limiting carbon dioxide emissions and on 
all forms of energy as regards its objective 
of promoting efficient use of energy; unchanged 
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Whereas, since the system of tax is to be 
established at Community level,' it is 
necessary to determine the territory to 
which it will apply as well as the rules 
relating to the holding and movement of 
taxable products, and the methods of 
calculating the rates and the framework 
for exemptions or reduced rates at 
Community level; 
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whereas use of energy sources as feed 
stocks should be excluded; whereas, 
however, as regards the taxation of energy 
as such, steps should be taken to avoid 
distortions between various energy 
sources arising in connection with the 
extraction process; whereas the 
arrangements should provide for 
appropriate treatment of electricity; 
Whereas, in order to promote the use of 
alternative sources of energy, renewable 
should be excluded from the scope of the 
tax; 
Whereas, in order to achieve these two 
objectives, the tax should be based on the 
energy content and on the level of carbon 
dioxide emissions from the products used; 
Whereas, in order to ensure that the tax 
yield accrues to the Member States 
without impending the free movement of 
the products subject to the tax and 
without giving rise to any distortions of 
competition, harmonised monitoring 
arrangements must be introduced; whereas 
such arrangements exist for products 
already subject to excise duty; whereas the 
Commission should adopt the appropriate 
measures for monitoring the other 
products while ensuring, however, that 
such monitoring does not impede their 
free movement; 
Whereas, in order to allow economic 
operators to adapt in a flexible manner to 
the new conditions created by the tax, the 
rates must be fixed at a tolerable level at 
the outset and raised gradually to the 
desired level; unchanged 
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Whereas, subject to certain limits and 
conditions, the Mendier Stales should, in 
temporary derogations; geje&i 
Whereas harmonisation of the rates of tax 
remains a key objective: 
Whereas the attainment of this objective in 
the short term nevertheless creates 
implementation problems for some 
Member States; 
Whereas, in order to encourage the 
introduction of a harmonised tax in the 
Community, it is necessary to set common 
parameters which are flexible enough to 
enable each Member State that so wishes 
to apply the tax, in accordance with the 
conclusions of the European Council 
meeting in Essen on 9 and 10 December 
1994: 
Whereas, therefore, on 1 January 1996. a 
clearly defined transitional period must be 
introduced during which transitional 
provisions designed to make it easier to 
move to a system of harmonised rates of 
tax will be implemented: 
Whereas, during this transitional period 
the Member States must be left a degree 
of flexibility in derteirnining the rates of 
tax: 
Whereas, however, the rates applied per 
product should be coherent with the 
different content of carbon and energy for 
the whole of the products to be taxed, in 
accordance with the Community 
objectives for the improvements of energy 
efficiency and the reduction of carbon 
dioxide emissions: 
Whereas, with a view to making it easier 
to move to a system of harmonised rates. 
it is necessary to set target rates to be used 
as reference values for the Member States 
during the transitional period and towards 
which thev endeavour to make their 
domestic rates converge: 
Whereas the transitional arrangements 
must be replaced, on 1 January 2000 by a 
harmonised system of taxation, which is 
the objective to be attained in the medium 
term: 
Whereas to this end, the Commission will, 
by 1 January 1999. present to the Council 
and to Parliament a report on the 
operation of the transitional arrangements 
accompanied bv proposals on moving to a 
harmonised system of taxation. 
and whereas the Council will act 
unanimously before 1 January 2000. after 
consulting the European Parliament, on 
the practical details of the harmonised 
system of taxation and on its entry into 
force: 
Whereas, in order to safeguard the 
competitiveness of Commun"'/, : k 
appropriate to grant COL v Jonal 
exemptions from, or reductions in, the tax 
of energy-intensive firms in so fer as their 
competitors in third countries are not 
encumbered with a similar tax or financial 
burden; whereas such exemptions and 
reductions must be authorised subject to 
the conditions laid down by Community 
law and in compliance with the 
Community's international commitments; 
Whereas provision should be made in this 
connection for a system of tax incentives 
for investment in energy saving or carbon 
dioxide abatement; whereas the conditions 
for such incentives must be fixed uniformly 
in order to ensure that they do not display 
the characteristics of aid likely to distort 
the conditions of competition; 
Whereas a committee needs to be set up in 
order to ensure that the provisions of this 
Directive are applied in a coordinated 
manner; Whereas, in order to safeguard the 
competitiveness of the industry of the 
Member States, it is appropriate to grant 
conditional exemptions from, or 
reductions in, the tax to energy-intensive 
firms in so far as their competitors in other 
Member States or third countries are not 
encumbered with a similar tax or financial 
burden; whereas such exemptions and 
reductions must be authorised subject to 
the conditions laid down by Community 
law and in compliance with the 
Community's international commitments; 
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Whereas assistance is needed from the 
Committee on Excise Duties established 
by. Directive 92/12/EEC of 
25 February 1992 7 in order to ensure that 
the provisions of this Directive are applied 
in a coordinated manner; 
?> OJ no L 76,23.3.1992. Directive last amended 
by Directive 94A74/EC(OJ No L 365, 
31.12.1994) 
Whereas it is essential that introduction of 
the new tax should not result in an 
increase in the overall tax burden; whereas 
compliance with the principle of tax 
neutrality will help to modernise tax 
systems by encouraging behaviour 
conducive to greater protection of the 
environment; whereas tax neutrality will 
cushion the effects on inflation and growth 
of introducing the tax; whereas 
compliance with the principle of tax 
neutrality will help to modernise tax 
systems by encouraging behaviour 
conducive to greater protection of the 
environment; 
Whereas, however, determination of the 
arrangements for ensuring tax neutrality is 
a matter for each Member State, 
HAS ADOPTED TEDS DIRECTIVE Whereas it is essential that the 
introduction of the new harmonised tax 
complies with the guidelines laid down in 
the Commission White Paper on growth, 
competitiveness and employment: whereas 
for this purpose the application of the tax 
must not be reflected in an increase in the 
overall tax burden: 
Whereas compliance with the principle of 
tax neutrality will help to modernise tax 
systems by encouraging behaviour 
conducive to greater protection of the 
environment; 
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TITLE I - GENERAL PROVISIONS 
Article 1 
1. The purpose of this Directive is to 
provide for the harmonised 
introduction in the Member States of a 
specific tax on the products specified 
in Article 3 and to be levied on carbon 
dioxide emissions and energy content 
The rate of the tax shall be in addition 
to the rates applied by the Member 
States to the products concerned by 
the Council Directives on the 
harmonisation of the structures of 
excise duties on mineral oils8 and on 
the approximation of the rates of 
excise duties on mineral oils9. 
2. Member States shall take the measures 
necessary to collect for themselves the 
tax referred to in paragraph 1 and to 
monitor its application. 
Application of the tax arrangements 
provided for in paragraph 1 shall be 
conditional on the introduction by 
other member countries of the OECD 
of a similar tax or of measures having a 
financial impact equivalent to those 
provided for m this Directive. The 
Council, acting by qualified majority 
on a proposal form the Commission, 
shall fix the date on which the tax 
arrangements ate to take effect. unchanged 
Article 1 
IThe Member States shall apply a 
harmonised tax on the products specified 
in Article3 and to be levied on carbon 
dioxide emissions and energy content, in 
accordance with the provisions of this 
Directive. 
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«QJNo.L. ,1992 
9OJNo.L. ..,.,1992 
10 
Article 2 
1. This Directive shall apply in the 
territory of the Community as defined, 
for each Member State, by the Treaty 
establishing the European Economic 
Community, and in particular Article 
227 thereof except for the following 
national territories : 
- in the case of the Federal Republic of 
Germany; the Island of Heligoland and 
the territory of Busingen; 
- in the case of the Italian Republic : 
Livigno, Campione d'ltalia and the 
Italian waters of Lake Lugano; 
- in the case of the Kingdom of Spain: 
Cueta and Melilla. 
2. By way of derogation from paragraph 
1, this Directive shall not apply to the 
Canary Islands, Madeira or the Azores. 
However, the Kingdom of Spain and 
the Portuguese Republic may give 
notice, by means of a declaration, that 
this Directive applies to those 
territories in respect of all or some of 
the products specified in Article 3 as 
from the first day of the second month 
following deposit of that declaration. 
3. By way of derogation from paragraph 
1, this Directive shall not apply to the 
overseas departments of the French 
Republic. However, the French 
Republic may give notice, by means of 
a declaration, that this Directive 
applies to those territories, subject to 
measures to adapt their extreme 
remoteness, from the first day of the 
second month following deposit of the 
declaration. Article 2 
This Directive shall apply in the territory 
of the Community within the limits laid 
down bv Article 2 of Directive 92/12/EEC 
on the general arrangements for products 
subject to excise duty and on the holding, 
movement and monitoring of such 
products(7) 
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11 
4. The provisions of this Directive shall 
not prevent Greece from maintaining 
the specific, status granted to Mount 
Athos and guaranteed by Article 105 
of the Greek Constitution. 
5. If the Commission considers that the 
exclusions provided for in paragraph 1 
to 3 are no longer justified, particularly 
in terms of fair competition, it shall 
present appropriate proposals to the 
Council. 
Article 3 
1. The tax referred to in Article 1 (1) 
shall be levied on the products 
specified below and intended for use as 
heating fuels or as motor fuels: 
a. coal, lignite, peat and their derivatives 
(coke, gas, tar, etc.), with the 
exception of blast-furnace gas, falling 
within CN codes 2701 to 2706; 
b. natural gas falling within CN codes 
271121 00 to 2711 29 00; 
c. mineral oils; the following shall be 
considered as such for the purposes of 
this Article : deleted 
deleted 
Article 3 
unchanged 
a)coal, lignite, peat and their derivatives 
(coke, gas, etc) with the exception of blast 
furnace gas, falling within CN codes 2701 
to 2705. 
unchanged 
(c) mineral oils as defined in Article 2(1) 
of Directive 92/81/EEC on the 
harmonisation of the structures of excise 
duties on mineral oilsCIO) 
(d) ethyl and methyl alcohol falling within 
CN codes 2207 and 2905 where obtained 
by distillation from products specified at 
(a)to(c). 
tO) 0J No. I. 316, 3T.tO.t992, Directive Last 
amended by Directive 94/74/EC (0J No. L 365, 
31.12.1994) 
12 
products falling within CN codes 2707 
10, 2707 20, 2707 30, 2707 50, 2707 
91 00 and 2707 99 (with the exclusion 
of CN codes 2707 99 30, 2707 99 50 
and 2707 99 70); 
products falling within CN code 2709; 
products falling within CN code 2710; 
liquefied petroleum gases railing within 
CN codes 2711 12 11 to 2711 19 00; 
products railing within CN codes 2712 
20 00, 2712 90 31, 2712 90 33, 2712 
90 39 and 2712 90 90; 
products falling within CN codes 2712 
10 and 2713, with the exception of 
resinous products, sued bleaching 
earth, acid residues and basic residues; 
products falling within CN code 2715; 
products falling with CN code 2901 
and CN codes 2902 11 00, 2902 19 
90, 2902 20, 2902 30, 2902 41 00, 
2901 42 00, 2902 43 00 and 2902 44; 
products railing within CN codes 3403 
11 00 and 3403 19; 
products railing within CN code 3811; 
products railing within CN code 3817. deleted 
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delete 
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13 
2. The tax referred to in Article 1 (1) 
shall also be levied on : 
a ethyl and methyl alcohol falling within 
CN codes 2207 and 2905 where 
obtained by distillation from products 
specified in paragraph 1 and intended 
for use as heating fuels or as motor 
fuels. The tax shall also be levied on 
any other product intended for use, 
offered for sale or used as motor fuel 
or as an additive or extended in motor 
fuels, with the exception of those 
specified in paragraph 3 below; 
b. electricity railing within CN code 
2716, and heat, generated : 
- in hydroelectric installations with a 
capacity of over 10 MW; 
- or using products railing within CN 
codes 2612, 2844 10 to 2844 50 and 
2845 10. 
3. The tax referred to in Article 1 (1) 
shall not be levied on : 
- fuel wood and wood charcoal railing 
within CN codes 4401 and 4402, and 
products resulting from the distillation 
or processing of wood; unchanged 
(a) any other product intended for use as 
motor fuel or as an additive or extended in 
motor fuels, with the exception of those 
specified in paragraph 3; 
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14 
any product of agricultural or 
vegetable origin obtained directly or 
after chemical modification, and in 
particular alcohol's railing within CN 
codes 2207 and 2905 and crude or 
esterified vegetable oils railing within 
CN codes 1507 to 1518. 
Products specified in paragraphs 1 and 
2 and used in metallurgical or 
electrolytic processes shall be regarded 
as being intended for use as heating 
fuels. 
TITLE H - CHARGEABLE EVENT 
AND CHARGEABUJTY 
Article 4 
1. The chargeable event for the tax shall 
be the extraction or manufacture of the 
products specified in Article 3 on the 
territory of the Community, as defined 
in Article 2, or their importation into 
that territory. 
2. Member States shall not be obliged to 
treat as "extraction or manufacture 
products": 
a. operations during which small 
quantities of products specified in 
Article 3 (1) and (2) (a) are obtained 
incidentally; unchanged 
-forms of energy of solar, wind .tidal and 
geothermal origin, or from biomass 
transformation. 
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Article 4 
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15 
b. the operation consi?tLng of mbdng in a 
tax warehouse products specified in 
Article 3 (1) and (2) (a) with other 
products or substances specified in that 
same Article provided that : 
- the tax referred to in Article 1 (1) and 
chargeable on the basic substances has 
been paid previously, in cases where 
the mixture obtained is intended for 
use as heating fuel or as motor fuel; 
- the amount paid is not less than the 
amount of the tax referred to in Article 
1 (1) that would be chargeable on the 
mixture intended for use as heating 
fuel or as motor fuel. 
3 The consumption of products specified 
in Article 3 on the site of an 
establishment in which these products 
or some of them are obtained shall not 
be considered as a chargeable event for 
the tax referred to in Article 1 (1), 
except where such consumption is for 
purposes not related to that 
production. unchanged 
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16 
Article 5 
1. The tax referred to in Article 1 (1) 
shall become chargeable at the time of 
release for consumption or when 
shortages are recorded. 
Release for consumption of 
subject to the tax means : 
a. any departure, including irregular 
departure, from a suspension 
arrangement; 
b. any extraction or manufacture, 
including irregular extraction or 
manufacture, of those products outside 
a suspension arrangement; 
c. any importation, including irregular 
importation, of those products where 
they have not been placed under a 
suspension arrangement. 
2. The chargeability conditions and rate 
of the tax referred to in Article 1(1) 
shall be those in force on the date on 
which the tax becomes chargeable in 
the Member State where release for 
consumption takes place or shortages 
are recorded. 
The tax shall be levied and collected 
according to the procedure laid down by 
each Member State, it being understood 
that Member States shall apply the same 
procedures for levying and collection to 
national products and to those from other 
Member States. Articles 
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17 
TITLE m - PERSONS LIABLE FOR 
PAYMENT OF THE TAX : 
HOLDING AND MOVEMENT OF 
PRODUCTS 
Article 6 
The tax referred to in Article 1 (1) shall be 
payable by persons who carry out a 
taxable transaction within the meaning of 
Article 5. 
Article 7 
1. The production, holding;movement 
and monitoring of the products 
specified in Article 3 (1) and (2) (a) 
shall be determined in accordance with 
the provisions of Council Directive 
92/12/EEC of 25 February 1992 on 
the general arrangements for products 
subject to excise duty and on the 
holding, movement and monitoring of 
such products(l). 
2. In the case of electricity falling within 
CN code 2716 and generated using 
products or in installations specified in 
Article 3, the Commission shall, where 
necessary, determine the appropriate 
measures relating to trade between 
Member States and . with third 
countries in accordance with the 
procedure provided for in Article 13. 
3. a) Invoices issued by electricity-
generating enterprises shall indicate the 
amount of tax per kW/h supplied and 
the total amount of tax payable on the 
inputs used for the electricity supplies 
invoiced; TTTLEÎH HOLDING AND 
MOVEMENT OF PRODUCTS 
deleted 
becomes Article 6 
1. The production, holding, movement 
and monitoring of the products specified 
in Article 3(1) shall be determined in 
accordance with the provisions of Council 
Directive 92/12/EEC of 25 February 1992 
on the general arrangements for products 
subject to excise duty and on the holding, 
movement and monitoring of such 
products.1 
2. In the case of electricity falling with 
CN code 2716 and generated using 
products or in installations specified in 
Article 3, the Commission shall, where 
necessary, determine the appropriate 
measures relating to trade between 
Member States and with third countries in 
accordance with the procedure provided 
for in Article 10. 
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18 
these amounts of tax shall be indicated on 
invoices issued by electricity-distributing 
enterprises. 
b)The amounts of tax shown on 
invoices shall be the same per kW/h for 
all the customers of electricity-
producing or electricity-distributing 
enterprises over a given period; 
4. Invoices issued in respect of supplies 
of the primary energy sources specified 
in Article 3 (I) and (2) (a) shall 
indicate the unit rate of the tax applied 
and the amount payable; such 
information shall, where appropriate, 
be given on a prorata basis on invoices 
issued in respect of subsequent 
supplies. 
* 
TITLE IV - DETERMINATION OF 
THE TAX BASE 
Article 8 
The tax base shall be : 
- for the energy component of the tax: 
the energy content of the products 
specified in Article 3 (1) and (2). 
However, electricity as specified in 
Article 3 (2) (b° and that generated 
using the products referred to above 
shall be taxed on the basis of the 
electricity generated, the said products 
used being exempt from the tax; 
- for the carbon dioxide component of 
the tax : the volume of carbon dioxide 
emitted on combustion in the presence 
of excess oxygen of the products 
specified in Article 3 (1) and (2) (a). deleted 
tiejetçd 
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becomes Article 7 
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19 
TTTLEV-RATES 
Article 9 
1. The rates of the tax referred to in 
Article 1 (I) shall be determined as 
follows : 
a.) for the products specified in Article 3 
(1) (a) and (b) and (2) (a), with the 
exception of the products specified at 
(b) below: 
- ECU 2.81 per tonne of carbon dioxide 
emitted on combustion in the presence 
of excess oxygen, and 
- ECU 0.21 per gigajouie of energy 
content. However, electricity as 
specified in Article 3 (2) (b) and that 
generated using the products specified 
in Article 3 (1) and (2) (a) shall be 
taxed at the rate of ECU 2.1 per 
MWZh, with the exception of 
electricity generated by 
hydroelectric installations specified in unchanged 
becomes Article 8 
1. During a transitional period ending on 
31 December 1999. and without prejudice 
to the provisions of Article 9. the Member 
States shall set a single rate of tax per 
product 
Member States should determine the 
structure of their rate in conformity with 
the objectives set out in Article 2 of the 
Council Decision 93/389/EEC(in in 
order to contribute to the stabilisation and 
limitation of CQ2 emissions by 
encouraging energy efficiency and by 
taking into account the content of carbon 
in the products taxed. 
For the application of this provision, the 
term product shall also apply to the 
bv-products covered 
specified m Article 3. by the CN codes 
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t1> OJ No. L t67, 9.7.t993, p.32 
20 
the first indent of Article 3 (2) 
(b), which shall be taxed at the rate of 
ECU 0.76 per MW/h. 
In the interests of simplifying application 
of the tax and effective monitoring, 
Member States may, in the case of coal, 
ligmte, peat and natural gas, apply a 
simplified tax schedule based on bands 
each equivalent to 5% of the carbon 
content convertible into carbon dioxide on 
combustion in the presence of excess 
oxygen and to 1.5 gigajoule of energy 
content of the crude products per tonne of 
solid fossil energy sources or liquefied 
petroleum gas or per 1.000 m3 of non-
liquefied gas; 
b). for mineral oils : 
- leaded or unleaded petrol falling within 
CN codes 2707 and 2710 : Ecu 13.46 
per 10001; 
- diesel and gas oil as defined in 
additional note 1 (f) of CN Chapter 27: 
Ecu 15.42 per 10001; 
- kerosene and aviation fuel as defined in 
additional note 1 (d) of CN Chapter 
27: Ecu 14.40 per 10001; 
- heavy fuel as defined in additional note 
1 (g) of CN Chapter 27: Ecu 17.21 per 
1.000 kg; 
- petroleum coke, etc. falling within CN 
codes 2713 11 00 to 2713 90 90 : Ecu 
15.36 per 1.000 kg; 
- liquefied petroleum gases falling within 
CN codes 2711 12 11 to 2711 19 00: 
Ecu 0.39 per gigajoule; deleted 
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21 
Member States may apply a higher rate 
than that prodded for at (a) and (b). deleted 
2. The rate of the tax shall be -a*alated 
in ECU half relating to thg_:.-i;ûrat of 
carbon dioxide emitted on combur bn. in 
the presence of excess oxygen and half 
relating to its content per gjgaioule of 
energy value! with reference to the 
relationship expressed bv the target rates 
mentioned in paragraph 3a) hereunder. 
However, electricity as specified in 
Article 3(2)(b) and that generated using 
the products specified in Article 3(1) and 
(2)(a) shall be taxed at rates expressed in 
ECU per MWh. '; 
In the interests of simplifying application 
of the tax and effective monitoring, 
Member States may: 
- in the case of coal, lignite, peat and 
natural gas apply a simplified tax schedule 
based on bands of carbon content and 
energy content; 
- in the case of mineral oils, apply rates 
expressed in ECU per 1000 1 with the 
exception of heavy fuel liquefied 
petroleum gases and methane for which 
the rates shall be expressed in ECU per 
1000 kg or as a proportion of quantities. 
3. With a view to the application of a 
harmonised fax at the end of the period 
specified in paragrapnl. the Member 
States shall endeavour to make their rates 
converse towards target rates which shall 
be set as follows: 
(a) for products other than those specified 
at®: 
- ECU 9.37 per tonne of carbon dioxide 
emitted on combustion in the presence of 
excess oxygen 
and 
ECU 0.70 per gigajoule of energy content 
However, for electricity as specified in 
Article 3(2Xb) and that generated using 
the products specified m Article 3fl> and 
f2¥a). the target rate shall be ECU 7 per 
MWh. with the exception of electricity 
generated bv the hydroelectric installations 
specified in Article 3f2Vbl for which a 
target rate of ECU 2.53 per MWh shall be 
set 
22 
2. The value in national currency of the 
Ecu to be taken into consideration in 
applying this Directive shall be fixed 
once a year. The rates to be applied 
shall be those obtaining on the first 
working day in October with effect 
from 1 January of the following year. 
Member States may round the amounts in 
national currency resulting from 
conversion of the amounts in Ecus 
referred to in the first paragraph in 
accordance with their own rules provided 
that the rounding operation does not result 
in an amount that is higher or lower than 
the conversion value by more than 5%. (b) for mineral oils: 
- leaded or unleaded petrol falling within 
CN codes 2707 and 2710: ECU 44.87 per 
10001; 
- diesel and gas oil as defined in additional 
note 1(f) of Combined Nomenclature 
Chapter 27: ECU 51.40 per 1 0001; 
- kerosene and aviation fuel as defined in 
additional note 1(d) of Combined 
Nomenclature Chapter 27: ECU 48 per 
10001; 
- heavy fuel as defined in additional note 
1(g) of Combined Nomenclature 
Chapter 27: ECU 57.37 per 1000 kg/mass; 
- petroleum coke etc. falling within 
Combined Nomenclature codes 
2713 11 00 to 2713 90 90: ECU 51.20 per 
1 000 kg/mass; 
- liquefied petroleum gases falling within 
CN codes 271112 11 to 271119 00: 
ECU 1.30 per gigajoule. 
becomes 4 
unchanged 
unchanged 
23 
3. For file first time at the end of the 
twelfth month following the date 
specified in Article 1 (2) and at the end 
of each of the ensuing six periods of 
twelve months, the Commission shall, 
in accordance with the procedure 
provided for in Article 13, raise the 
rate of the tax by one third of the 
amount fixed in paragraph 1 
4. Exceptionally, the Council, acting 
unanimously on a proposal from the 
Commission, may, if so requested and 
on the basis of information obtained by 
it in connection with the Council 
Decision for the monitoring 
mechanism of Community C02 and 
other greenhouse gas emissions12 and 
additional information provided in tins 
respect, authorise on one more 
Member States to suspend temporarily 
the application of the tax in order to 
take account of the particular situation 
in Member States, developments in the 
economic situation, and progress made 
in achieving the objective of stabilising 
carbon dioxide emissions. dieted 
dejetei 
13COM(92) 181 fe* of 1.6.1992 
24 
5. Products subject to the tax referred to 
in Article 1 (1) shall be exempted from 
the tax where they are intended : 
- for delivery in the context of 
diplomatic or consular relations; 
- for international organisations 
recognised as such by the public 
authorities of the host Member State 
and by members of such organisations, 
within the limits and under the 
conditions laid down by the 
international conventions establishing 
such organisations or by headquarters 
agreements; 
for the armed forces of any State party 
to the North Atlantic Treaty other than 
the Member State within which the tax 
is chargeable as well as for the armed 
forces referred to in Article 1 of 
Decision 90/640/EEC13, for the use of 
those forces or for the civilian staff 
accompanying them; 
- for consumption under an agreement 
concluded with third countries or 
international organisations provided 
that such an agreement is allowed or 
authorised with regard to exemption 
from VAT. 
These exemptions shall be subject to the 
conditions and limitations laid down by the 
Commission in accordance with the 
procedure provided for in Article 13. 
Eligibility for exemption may be granted in 
accordance with a procedure for 
reimbursing the tax. TITLE VI - EXEMPTIONS AND 
REDUCED RATES 
Article 9 
becomes 1. Products subject to the tax 
shall be exempted from payment of the tax 
when thev satisfy the conditions referred 
to in Article 23 (1) of Directive 
92/12/EEC. 
deleted 
deleted 
-\ 
deleted 
deleted 
deleted 
13OJ No L 349, 13.12.1990, p. 19. 
25 
Article 10 
In the case of firms with a high energy 
consumption that are seriously 
disadvantaged on account of an increase 
in imports from third countries which are 
not specified in Article 1 (2) and which 
have not introduced a similar tax or 
measures having an equivalent financial 
impact, the Commission may authorise 
Member States, after notification of the 
corresponding plans, to grant such firms: 
(i) a graduated reduction in the tax 
payable under Article 9 or an 
equivalent refund where the total 
energy cost, inclusive of all taxes 
except VAT, expressed as a 
percentage of the value added as 
defined in Article 2 of Directive 
67/227/EEC of 11 April 1967 
generated in respect of the products 
obtained using the energy taken into 
account in determining the above cost, 
amounts to at least 8%. 
(ii) A full and temporary exemption from 
the tax referred to in Article 1 (1) or 
an equivalent refund provided that the 
firms have made substantial efforts to 
save energy or to reduce carbon 
dioxide emissions. 
The conditions for granting the tax 
reductions or exemptions referred to 
at (1) and (2) above shall comply with 
the rules of Community law and with 
the Community's international 
commitments. deleted 
becomes 2. In the case of firms with a 
high energy consumption that are seriously 
disadvantaged on account of an imbalance 
in trade from other Member States, or an 
increase in imports from third countries, 
Member States may, while complying with 
the rules of Community law and the 
Community's international commitments. 
grant such firms: 
(i)a graduated reduction in the tax payable 
or an equivalent refund. 
The Member States shall calculate the 
bands of the reduction on the basis of the 
total energy cost, inclusive of all taxes 
except VAT, expressed as a percentage of 
the value added as defined in Article 2 of 
Directive 67/227/EEC of 11 
April 1967(14) 
(ii)A full and temporary exemption from 
the tax payable or an equivalent refund 
provided that the firms hâve made 
substantial efforts to save energy or to 
reduce carbon dioxide emissions. The 
Member States shall notify the 
Commission of the commitments 
enter into with these firms. they 
deleted 
14) OJ No. L 71, 14.4.1967, p.1302 
26 
Article 11 
Member States shall reduce the amounts 
of tax payable or, where appropriate, grant 
equivalent refunds to the extent of n©w 
investment expenditure incurred by a firm 
during a given reference period in 
improving the efficient use of energy or in 
limiting carbon dioxide emissions. The 
nature and proportion of the investment 
expenditure taken into consideration and 
the reference period shall be determined by 
the Commission in accordance with the 
procedure provided for in Article 13. 
Where the amount of such expenditure 
exceeds the amount of tax payable or paid, 
a tax payable or paid, a tax credit or a 
corresponding entitlement shall be carried 
over to subsequent years. 
Article 12 
The arrangements for granting tax 
exemptions, reductions or refunds referred 
to in Article 10 and the arrangements for 
tax incentives referred to in Article 11 
shall be reviewed every three years. 
Before expiry of each three-year period, 
and for the first time before expiry of the 
third year of application of the tax, the 
Commission shall present to the Council a 
report on the operation of the system 
accompanied, where appropriate, by a 
proposal for amending this Directive. deleted 
. Member States may reduce 
the amounts of tax payable or, where 
appropriate, grant equivalent refunds to 
the extent of new investment expenditure 
incurred by a firm during the period 
specified in Article 8 in improving the 
efficient use of energy or in limiting 
carbon dioxide emissions. 
These amounts or equivalent refunds mav 
represent the entire cost of the investment 
made. 
Where the amount of such expenditure 
exceeds the amount of tax payable or paid, 
a tax credit or a corresponding entitlement 
shall be carried over to subsequent years. 
deleted 
deleted 
deleted 
27 
TITLE VI - COMMITTEE ON THE 
CARBON DIOXIDE/ENERGY TAX 
Article 13 
1 The Commission shall be assisted by a 
Committee on the Carbon 
Dioxide/Energy Tax, hereinafter 
referred to as the "Committee". The 
Committee shall be composed of 
representatives of the Member States 
and chaired by a Commission 
representative. 
2 Without prejudice to the matters 
frilling within the remit of the 
Committee provided for in Directive 
92/12/EEC of 25 February 1992,(1) 
the measures necessary for the 
application of the provisions of this 
Directive shall be adopted in 
accordance with the procedure laid 
down in paragraphs 3 and 4. 
3 The Commission representative shall 
submit to the Committee a draft of the 
measures to be taken. The Committee 
shall deliver its opinion on the draft 
within a time-limit which the Chairman 
may lay down according to the 
urgency of the matter. It shall take its 
decision by the majority laid down in 
Article 148 (2) of the Treaty. The 
Chairman and the Commission 
representative shall not vote. TITLE VII - COMMITTEE 
becomes Article 10 
1. The Commission shall be assisted by 
the Committee laid down in Article 24 
of the Directive 92/12/EEC of 25 
February 1992( 1) 
deleted 
becomes 2. The representative of the 
Commission shall submit to the committee 
a draft of the measures to be taken. The 
committee shall deliver its opinion on the 
draft within a time-limit which the 
chairman may lay down according to the 
urgency of the matter. The opinion shall 
be delivered by the majority laid down in 
Article 148 (2) of the Treaty in case of 
decisions which the Council is required to 
adopt on a proposal from the Commission. 
The votes of the representatives of the 
Member States within the committee shall 
be weighted in the manner set out in that 
Article. The chairman shall not vote. 
28 
The Commission shall adopt the 
intended measures where they are in 
accordance with the Committee's 
opinion. Where the intended measures 
are not in accordance with the 
Committee's opinion or in the absence 
of any opinion, the Commission shall 
forthwith place before the Council a 
proposal relating to the measures to be 
taken. The Council shall act by 
qualified majority. 
If, on expiry of a period of three months 
from the date on which the matter was 
referred to it, the Council has not adopted 
any measures, the Commission shall adopt 
the proposed measures. 
In addition to the measures referred to 
in paragraph 2, the Committee shall 
examine the matters raised by its 
Chairman, either on his own initiative 
or at the request of the representative 
of a Member State, and concerning the 
application of the Community 
provisions on the tax referred to in 
Article 1(1). becomes X 
a) The Commission shall adopt the 
measures envisaged if they are in 
accordance with the opinion of the 
committee. 
b) If the measures envisaged are not in 
accordance with the opinion of the 
committee, or if no opinion is delivered, 
the Commission shall,, without delay, 
submit to the Council a proposal relating 
to the measures to be taken. The Council 
shall act by qualified majority. 
IÇ on expiry of a period to be laid down in 
each act to be adopted by the Council 
under this paragraph but which may in no 
case exceed three months from the date of 
referral to the Council, the Council has not 
acted, the proposed measures shall be 
adopted by the Commission. 
deleted 
29 
TITLE VH - MUTUAL ASSISTANCE 
Article 14 
1 A fifth indent shall be added to Article 
1 (1) of Directive 77/799/EEC*5 , as 
last amended by Directive 
92/12/EEC(l): 
"-the carbon dioxide/energy tax introduced 
by Council Directive 92/..7EEC 
of.../1992". 
2 A fourth indent shall be added to 
Article 3 (f) of Directive 76/308/EEC17 
as last amended by Directive 
4 92/.../EEC o£..1992 : 
"-the carbon dioxide/energy tax introduced 
by Council Directive 92J..JEEC 
o£...1992".. TITLE Vffl - MUTUAL ASSISTANCE 
becomes Article II 
1. A fifth indent shall be added to Article 
1 (1) of Directive 77/799/EEC(15), as 
bat amended by Directive 92/12/EEC 
(1): 
"-the carbon dioxide/energy tax introduced 
by CouncS Directive 95/....JEEC 
o£..7199Sfi6V" 
2. A fourth indent shall be added to 
Article 3 (f) of Directive 
767308/EEQ17) as test amended by 
Directive 92/108/EEC of 
"-aie carbon dioxide/energy tax introduced 
by Council Directive 95/...7EEC 
of M995Q6}* 
15 OJ No. L 336, 27.12.1977, p.15 
17OJNo.L73,19.3.1976, p.18 C16>...... 
<18>0J No. L 390, 31.12.1992, p.124 
30 
TITLE Vm : FISCAL NEUTRALITY 
Article 15 
1 Member States shall : 
- notify the Commission, when 
introducing the tax referred to in 
Article 1 (1), of the steps they have 
taken to ensure tax neutrality; 
- inform the Commission each year of 
the conditions under which tax 
neutrality has been achieved. 
The measures taken by the Member 
States to ensure tax neutrality shall 
comply with Community law. deleted 
becomes Article 12 , 
Not later than 31 December 1998. the 
Commission shall present to the Council 
and to Parliament a report on the 
implementation of this Directive by the 
Menfter States ana* pn the effectiveness of 
the measures taken bv the Community and 
the Member States to attain the objectives 
set bv the Council with respect to carbon 
dioxide emissions, accompanied bv 
appropriate proposals on the rules for the 
application of harmonised rates of tax on 
carbon dioxide and energy. The 
Commission proposals shall in particular 
take account of the need to safeguard the 
competitiveness of Community industries 
and ensure that the tax does not reflect an 
increase in the overall tax burden. Before 
1 January 2000. the Council, acting 
unanimously on a proposal from the 
Commission, shall, after examining the 
Commission report and consulting the 
European Parliament, adopt the measures 
necessary for the introduction of 
harmonised rates of tax in the Community. 
31 
TITLE IX - FINAL PROVISIONS 
bring into force 
and 
necessary to 
Directive on 1 Article 16 
1 Member Stales 
the laws, 
administrative 
comply with 
January 1993. 
When Member States adopt 
measures shall contain a 
Directive or shall be 
reference on the occasion 
publication. The arrangements 
such a reference shaH be laid down by 
Member States. becomes Article 13 
1. Member States shall bring into force 
the laws, regulations and administrative 
provisions necessary to comply with this 
Directive on 1 January 1996. 
to this 
such 
official 
Member States shall inform the 
Commission of the mam provisions of 
national law which they adopt to 
comply with this Directive. 
Article 17 
This Directive is 
States. 
Done at Brussels, 
For the Council, 
The President to unchanged 
becomes Article 14. 
ISSN 0254-1475 
COM(95) 172 final 
DOCUMENTS 
EN 14 09 12 
Catalogue number : CB-CO-95-204-EN-C 
ISBN 92-77-88886-5 
Office for Official Publications of the European Communities * 
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