WRITTEN QUESTION P-3626/01

by Alexander de Roo (Verts/ALE) to the Commission

(8 January 2002)

Subject: Decision by the Netherlands Government to abolish the exemption from ecotax for environmentally sound hydro-electricity

The Netherlands Government has decided to alter the Regulatory Energy Tax, or ecotax, which exists in the Netherlands. As from 1 January 2002, hydro-electricity will no longer be exempt from this tax, according to the Netherlands Government's plans. In a letter to the Lower House of Parliament, the Government argues as follows:

even now cheap hydro-electricity [is being] exported to the Netherlands in large quantities. When the Dutch market in environmentally sound electricity opens, imports of hydro-electricity from certain foreign sources are likely to increase substantially. So long as there is still no level playing field for the environmentally sound electricity market in Europe, the Dutch market in such electricity will be distorted due to the substantial imports of hydro-electricity.

To take one example, the energy company Nuon is currently supplying nearly 60 000 families in the Netherlands with environmentally sound electricity from small hydro-electric power stations in England, Sweden and Norway. At one stroke, the Netherlands Government is now deciding that this should no longer be classified as environmentally sound electricity. At a time when hundreds of thousands of families in the Netherlands wish to switch to environmentally sound electricity, the Netherlands Government is depriving producers of the opportunity to meet this growing demand in the near future. Consequently it will become economically more difficult to market and continue to market sustainable energy. The anticipated trend towards less clean biomass will also hamper compliance with the target figure of 22 % sustainable energy consumption in the Netherlands which was supposed to have been attained within the next few years. It looks very much as if the Netherlands Government's concern is not so much to create a level playing field for environmentally sound electricity in Europe as to protect the billions it receives in revenue from the ecotax.

Does the proposed decision by the Netherlands Government no longer to classify hydro-electricity as environmentally sound electricity accord with existing European rules and legislation, particularly those concerning liberalisation of the electricity market in Europe?

How compatible is this proposed decision with the Commission's plan to introduce electricity labelling so that consumers in Europe know what kind of electricity they are buying and can buy?

Answer given by Mrs de Palacio on behalf of the Commission

(4 February 2002)

With reference to the first part of the question, the Commission would like to assure the Honourable Member that the Dutch government's decision to end the ecotax exemption granted for electricity gained from hydropower does not seem to be incompatible with the common electricity market rules that prohibit discrimination among producers from different Member States. According to informations available at present, the hydropower ecotax exemption in question apparently ceases to apply for domestic and other Community producers alike.

Furthermore, while Directive 2001/77/EC of the Parliament and of the Council of 27 September 2001 on the promotion of electricity produced from renewable energy sources in the internal electricity market(1) (the Directive) includes electricity from hydropower in electricity produced from renewable energy sources (commonly known as green electricity), the Member States have no obligation to support such electricity through any particular legislative measure, e.g. a tax exemption.

Article 3 of the Directive only requires that the Member States take appropriate steps to encourage green electricity consumption. The Directive provides no guidance as regards the nature of such steps, which are thus left to the Member States' discretion. Consequently, the Dutch government is also free to support only certain sources of green electricity without committing a breach of Community law.

With reference to the second part of the question, concerning the connection between the contested decision and the Directive's labelling provisions, the Commission could not discover a direct link between the two matters. Article 5 of the Directive obliges Member States to guarantee by not later than 27 October 2003 the origin of electricity produced from renewable energy sources (within the meaning of the Directive), yet it does not require the application of specific support measures on their behalf.

(1) OJ L 283, 27.10.2001.