Proposal for a Council Decision authorising Germany to apply a reduced 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
Date: 2000-01-21
Institutions: European Commission
Subjects: Germany, excise duty, mineral oil, motor fuel, tax harmonisation

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 21.1.2000
COM(2000) 12 final

Proposal for a

COUNCIL DECISION

authorising Germany to apply a reduced 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.

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
inter alia rules on differentiating levels of excise duty according to the sulphur content of the
fuel. The purpose of this preferential tax treatment is to speed up the introduction of sulphur-
free fuels.

The new law will provide for mineral oil duty on petrol and diesel fuel with a sulphur content
of over 50 ppm (parts per million) to be increased by 3 pfennigs per liter from 1 November
2001. 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.

Germany therefore requests authorisation 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
liter less than that on fuels with a higher sulphur content and from 1 January 2003, to apply to
fuels with a maximum sulphur content of 10 ppm a mineral oil tax of 3 pfennigs per liter less
than that on fuels with a higher sulphur content.

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

The Commission has carefully examined the request from Germany and has prepared a
proposal for Council Decision authorising a differentiated rate of excise duty for fuels with a
maximum sulphur content of 50 ppm from 1 November 2001 to 31 December 2002.

However, the Commission also considers that more time is needed to examine carefully
certain aspects of the request for a differentiated 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 has therefore prepared a Communication to the Council to explain these
concerns and to explain why no proposal has been prepared as yet for fuels with a maximum
sulphur content of 10 ppm.

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.

1

OJ L 316, 31.10.92, p. 12, Directive as last amended by Directive 94/74/EC (OJ L 365, 31.12.94, p. 46).

2

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.

3

Proposal for a

COUNCIL DECISION

authorising Germany to apply a reduced 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 oils2, and in particular Article 8(4) thereof,

Having regard to the proposal from the Commission,

Whereas:

(1)

(2)

(3)

(4)

(5)

(6)

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 special policy
considerations.

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 other Member States have been informed thereof.

law on the continuation of
The German authorities have notified the draft
environmental tax reforms to the Commission under Article 88(3) of the Treaty; this
decision does not prejudge the outcome of the relevant state aid procedures under
Articles 87 and 88 of the Treaty.

The Commission regularly reviews reductions and exemptions to check that they are
compatible with the operation of the internal market or with Community policy on
protection of the environment.

Germany has requested authorisation 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 liter less than that on fuels with a higher sulphur content; the Council is
to review its application on the basis of a proposal from the Commission no later than
31 December 2002 when the authorisation granted by this decision expires.

2

OJ L 316, 31.10.92, p. 12, Directive as last amended by Directive 94/74/EC (OJ L 365, 31.12.94, p. 46).

4

HAS ADOPTED THIS DECISION:

Article 1

In accordance with Article 8(4) of Council Directive 92/81/EEC, Germany is authorised from
1 November 2001 until 31 December 2002 to apply a different rate of excise duty to fuels
with a maximum sulphur content of 50 parts per million provided that these differential 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 oils3, and in
particular the minimum rates of excise duty provided for in Articles 4 and 5 thereof.

Article 2

This Decision is addressed to Germany.

Done at Brussels,

For the Council
The President

3

OJ L 316, 31.10.92, p. 19, Directive as last amended by Directive 94/74/EC (OJ L 365, 31.12.94, p. 46).

5