WRITTEN QUESTION E-1968/99

by Piia-Noora Kauppi (PPE-DE) to the Commission

(5 November 1999)

Subject: Definition of peat in the Directive on the taxation of energy products

In its proposal for a Council Directive restructuring the Community framework for the taxation of energy products (COM(97) 0030 C4-0155/97 97/0111(CNS))(1), the Commission also deals with the taxation of peat. In Finland, for example, peat bogs are an important natural resource, and the turf squares cut out from them cover some 7 % of Finland's energy requirement. Some 6 500 people derive their livelihood either directly or indirectly from peat production. As yet, peat has not been classified as a renewable energy source like wood. In fact, peat is a renewable natural resource comparable with wood, with a longer cycle of renewal.

The use of peat is essential if we are seeking to use renewable natural resources in energy production. Without the co-use of peat, wood-burning boilers could not be sufficiently productive and would not be profitable. Peat is only used in local energy production, and thus has no influence on the European internal market.

What does the Commission intend to do to ensure that the energy taxation directive currently in preparation takes account of the importance of peat in regional energy production? Does the Commission propose in future to define peat as an intrinsically renewable resource? Does the Commission intend to ensure that the efficient use of peat remains possible in future for the purpose of energy production in the Nordic countries?

(1) OJ C 139, 6.5.1997, p. 14.

Answer given by Mrs de Palacio on behalf of the Commission

(3 December 1999)

The Commission proposal for a Council directive on a Community framework for the taxation of energy products, mentioned by the Honourable Member, deals with all energy products, including peat. Peat whether or not agglomerated is covered by article 2, paragraph 1(c) of the proposal as falling under combined nomenclature code number 27 03.

The Commission considers that the proposed directive establishes a flexible Community framework for the taxation of energy products such as peat, which makes it possible for Member States to restructure their national tax systems to attain national objectives in environment, employment, transport and energy policies, while respecting a key Community achievement: the single market.

The Commission further considers that fuel peat has specific characteristics which makes it difficult to classify. As an organic material formed over several thousand years by the accumulation of plant debris under anaerobic water-logged conditions, peat contains most of the organic compounds of the original plants which formed it and could therefore be regarded as an organic based fuel. Nevertheless, the Commission, due to the renewal time of several thousand years, does not consider fuel peat as an intrinsically renewable resource. This is in line with the Intergovernmental Panel on climate change (IPCC) Guidelines for national greenhouse gas inventories under the United Nations framework Convention on climate change (UNFCCC).

The Commission is aware of the importance of peat as a regional energy resource, which contributes to energy supplies, in particular in isolated areas. Security of energy supplies is one of the key energy objectives pursued by the Commission. Diversification and exploitation of indigenous energy resources, including the use of peat in the Nordic Member States and elsewhere in the Community, is an important policy in this respect. Moreover, national policies that combine production of peat with conservation of significant peatland areas and an appropriate implementation of an after-use policy could have a positive life-cycle impact on overall greenhouse gas emissions from peat production and use.

The role of peat as an energy source is further analysed in a technical and scientific study commissioned by the Commission, entitled Evaluation of the fuel peat industry in the enlarged European Union and carried out jointly by a number of peat research organisations in the Community. A copy of the study is forwarded to the Honourable Member as well as to the Secretariat General of the Parliament.