Proposal for a Council Decision authorising Germany to apply a differentiated 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: 2000-06-27
Institutions: European Commission
Subjects: Germany, excise duty, mineral oil, tax exemption, tax harmonisation

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 27.06.2000
COM(2000) 397 final

Proposal for a

COUNCIL DECISION

authorising Germany to apply a differentiated 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 oils1, 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 informed the Commission that a new law on the continuation of
environmental tax reforms, brought into force on 1 January 2000, provided for differentiating
levels of mineral oil duty on fuels according to their sulphur content. The purpose of this
preferential tax treatment is to speed up the introduction of sulphur-free fuels.

The new law provided for mineral oil duty on petrol and diesel fuel with a sulphur content of
over 50 ppm (parts per million)
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.

to be increased by 3 pfennigs per

liter

Germany therefore requested authorisation 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 from 1 November 2001 to 31 December 2002, and from 1 January 2003 to apply the
reduced rate to fuels with a maximum sulphur content of 10 ppm.

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

Because of some concerns regarding the implications of a differentiated duty rate on 10 ppm
fuels, the Commission divided the request into two parts and dealt with them separately.
Firstly by drafting a proposal for a Council Decision that would authorise the derogation in
relation to 50 ppm fuels and secondly by drafting a Communication to Council
that
effectively suspended action on the question of 10 ppm fuels.

Council accepted the draft proposal and authorised the introduction of a tax differential from
1 November 2001 to 31 December 2002 in relation to fuels with a maximum sulphur content
of 50 ppm. At the same time, Council accepted the Communication from the Commission,
which explained that more time was required to examine the question of 10 ppm fuels.

The Commission has resolved the outstanding questions and concerns about granting a
derogation for 10 ppm fuels and considers that the tax differential requested by the German
authorities would not be contrary to existing Community policies. Accordingly a proposal for
a Council Decision authorising such a tax differential has been prepared.

The proposal for Council Decision authorises a differentiated rate of excise duty for fuels with
a maximum sulphur content of 10 ppm from 1 January 2003 until 31 December 2005.

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

1

OJ L 316, 31.10.1992, p. 12. Directive as last amended by Directive 94/74/EC (OJ L 365, 31.12.1994,
p. 46).

2

the Council. However, this decision does not prejudice the outcome of any future state aid
procedures that may be undertaken in accordance with Articles 87 and 88 of the Treaty2.

In any event, this derogation must be reviewed no later than 31 December 2005, when the
authorisation granted by the Decision expires. The Council will review the situation on the
basis of a Commission proposal and decide whether the authorisation should be withdrawn,
amended or extended.

2

Commission Decision of 15.2.2000. State aid case N/575/99 – Germany, “Ökosteuer”.

3

Proposal for a

COUNCIL DECISION

authorising Germany to apply a differentiated 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 oils3, and in particular Article 8(4) thereof,

Having regard to the proposal from the Commission,

Whereas:

(1)

(2)

(3)

(4)

(5)

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 informed the Commission that a new law on the continuation
of environmental tax reforms, brought into force on 1 January 2000, provided for
differentiating levels of mineral oil duty on fuels according to their sulphur content.

The new law provided for mineral oil duty on petrol and diesel fuel with a sulphur
content exceeding 50 ppm (parts per million) to be increased by 3 pfennigs per litre
from 1 November 2001 and for this higher tax to be applied to fuels with a sulphur
content exceeding 10 ppm from 1 January 2003.

The German authorities requested Council authorisation to apply the differentiated rate
of excise duties and Council authorised the German authorities to introduce a
differentiated rate of excise duty for fuels with a sulphur content not exceeding
50 ppm from 1 November 2001 to 31 December 2002.

The Commission and Member States consider that, on the basis of the currently
available information, there are no indications that extending the application of a
differentiated rate of excise duty to fuels with a maximum sulphur content of 10 ppm
is likely to give rise to distortions of competition or hinder the operation of the internal
market.

3

OJ L 316, 31.10.1992, p. 12. Directive as last amended by Directive 94/74/EC (OJ L 365, 31.12.1994,
p. 46).

4

(6)

(7)

(8)

(9)

This decision does not prejudice the outcome of any future state aid procedures that
may be undertaken in accordance with Articles 87 and 88 of the Treaty4.

The Commission regularly reviews reductions and exemptions to check that they do
not distort competition or the operation of the internal market or are incompatible with
Community policy on protection of the environment.

Germany has requested authorisation 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.

The Council will review this decision on the basis of a proposal from the Commission
no later than 31 December 2005 when the authorisation granted by this decision
expires.

HAS ADOPTED THIS DECISION:

Article 1

In accordance with Article 8(4) of Council Directive 92/81/EEC, Germany is authorised from
1 January 2003 until 31 December 2005 to apply a differentiated rate of excise duty to fuels
with a maximum sulphur content of 10 ppm (parts per million) provided that the differentiated
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 oils5, 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

4

5

Commission Decision of 15.2.2000. State aid case N/575/99 – Germany, “Ökosteuer”.
OJ L 316, 31.10.1992, p. 19. Directive as last amended by Directive 94/74/EC (OJ L 365, 31.12.1994,
p. 46).

5