Communication from the Commission to the Council - Request by the German Government for authorisation to introduce a measure derogating from Council Directive 92/81/EEC, based on Article 8(4) of that Directive, in respect of a lower rate of excise duty on automotive fuels with a sulphur content under 10 parts per million (ppm)
Date: 2000-01-21
Institutions: European Commission
Subjects: Germany, excise duty, mineral oil, motor fuel, tax harmonisation

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 21.01.2000
COM(2000) 16 final

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL

Request by the German Government for authorisation to introduce a measure
derogating from Council Directive 92/81/EEC, based on Article 8(4) of that Directive, in
respect of a lower rate of excise duty on automotive fuels with a sulphur content under
10 parts per million (ppm)

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL

Request by the German Government for authorisation to introduce a measure
derogating from Council Directive 92/81/EEC, based on Article 8(4) of that Directive, in
respect of a lower rate of excise duty on automotive fuels with a sulphur content under
10 parts per million (ppm)

1.

Introduction

In accordance with Council Directive 92/81/EEC, Member States are required to
apply the harmonised system for the structures of excise duties on mineral oils.
Under Article 8(4) of that Directive, the Council may authorise any Member State to
introduce further duty exemptions or reductions for specific policy reasons.

In a letter from the Office of the German Permanent Representation, dated 24
September 1999, the Commission was informed of a measure aimed at introducing
different rates of excise duty on automotive fuels with a sulphur content under
specific limits.

In a letter from the Commission’s Secretariat General dated 25 November 1999, all
Member States were informed of the intended measure in accordance with Article
8(4) of the above mentioned Directive. Under the same Article, the Commission, or
any Member States may request that the Council consider the matter.

2.

Description of the measure

The German authorities have informed the Commission that they wish to bring a new
law on the continuation of environmental tax reforms into force on 1 January 2000,
differentiating levels of mineral oil duty on fuels according to their sulphur content.
The draft law includes rules on differentiating levels of excise duty according to the
sulphur content of the fuel.

The new law will provide for a two-stage implementation of different mineral oil
duty on petrol and diesel fuel depending upon its sulphur content. The proposal is for
fuel with a sulphur content of over 50 ppm (parts per million) to be increased by
3 pfennigs per litre from 1 November 2001 until 31 December 2002. It provides
further that, from 1 January 2003, this higher tax is to be applied to fuels with a
sulphur content of over 10 ppm.

The German authorities have explained that the purpose of the measure is to speed
up the introduction of sulphur free fuels. The go on to explain that, as vehicles can
run on low-sulphur and sulphur-free fuels without having to undergo retro-fitting,
use of such fuels will bring about a major drop in toxic emissions from all vehicles.
Furthermore, low-sulphur, and particularly sulphur-free, fuels also allow the use of
new types of engines and exhaust scrubbing technology. The combination of low-
sulphur fuels and this new technology will result in a significant decrease in the
volumes of suspended particulates, nitrogen oxides and hydrocarbons emitted, in
spite of forecasts that
increase. If this is followed by the
introduction of sulphur-free fuels the emissions can be reduced even further. The aim

traffic levels will

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is to promote the use of sulphur-free fuels so as to be able to take up the full potential
for reducing CO2 emissions.

Germany therefore requests authorisation under Article 8(4) of Council Directive
92/81/EEC of 19 October 1992:

• from 1 November 2001 to 31 December 2002, to apply to fuels with a maximum
sulphur content of 50 ppm a mineral oil tax of 3 pfennigs per litre less than that on
fuels with a higher sulphur content;

• from 1 January 2003, to apply to fuels with a maximum sulphur content of 10
ppm a mineral oil tax of 3 pfennigs per litre less than that on fuels with a higher
sulphur content.

3.

Commission's opinion

The Commission notes that the request is in two distinct parts. On the first part,
relating to 50 ppm low sulphur fuel for the period 1 November 2001 until 31
December 2002, the Commission has no concerns because a standard of 50 ppm has
already been agreed and decided by Directive 98/70/EC of the European Parliament
and of the Council regarding agreed standards for the quality of petrol and diesel
fuels in the Community. The 50 ppm standard is to be applied within the Community
from 1 January 2005. The tax incentive that the German authorities propose will
the final
therefore encourage the use of
implementation date in the Directive. The Commission has therefore prepared and
submitted a draft proposal for Council Decision to authorise this part of the
derogation request.

this fuel standard in advance of

However, on the second part of the request the Commission considers that more time
is needed to examine carefully certain aspects of the request for a different rate of
excise duty for fuels with a maximum sulphur content of 10 ppm. In particular,
further examination of technological issues and environmental benefits is required
together with a more detailed examination of how fuel standards issues can effect
competition and trade within the single market.

The Commission stresses that this communication does not signify that this second
part of the derogation request has been rejected in principle. The Communication is
simply to state that more time is needed to examine the issue, and to point out that
the required time is not available under the conditions set out in Article 8(4) of
Directive
a
92/81/EEC for
communication is submitted to Council.

derogation

processing

requests,

unless

such

The Commission assures the German authorities and the Council that this matter will
be given urgent consideration and a draft proposal for Council Decision, or a further
communication, will be issued to the Council as soon as possible.

In view of these objections of substance, the Commission requests that the Council
considers the matter according to the third sub-paragraph of Article 8(4) of Directive
92/81/EEC.

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