Proposal for a Council Decision authorising Italy 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: 2000-10-03
Institutions: European Commission
Subjects: Italy, excise duty, mineral oil, tax harmonisation

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 03.10.2000
COM(2000) 614 final

Proposal for a

COUNCIL DECISION

authorising Italy 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 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 Italian authorities have informed the Commission that they wish to exempt from excise
duty the water content of stabilised water/diesel emulsions and water/heavy fuel oil
emulsions. The water/diesel emulsion will be used as motor fuel and also as heating fuel. The
water/heavy fuel oil emulsion will be used as heating fuel and also for industrial purposes.

Articles 2(2) and 2(3) of Directive 92/81/EEC make the water content of water/mineral oil
emulsions subject to duty when the emulsion is used as heating fuel or as motor fuel.
However, the water content in the emulsion does not contribute to energy release but simply
aids fuel combustion, thus reducing pollutant emissions. The Italian authorities therefore wish
to exempt the water content from duty.

Italy therefore requests authorisation to exempt the relevant water content of water/diesel and
water/heavy fuel oil emulsions from excise duty from 1 October 2000. The specific policy
consideration is to ensure fair and equitable charging and to encourage the use of a more
environmentally friendly fuel. The resultant differentiated rates of excise duty on these fuels
will all respect the minimum rates of excise duty set out in Directive 92/82/EEC2.

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

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.

In any event, on the basis of a proposal from the Commission, this derogation must be
reviewed no later than 31 December 2005 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.

1

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).
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).

2

Proposal for a

COUNCIL DECISION

authorising Italy 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 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 specific policy
considerations.

The Italian authorities have informed the Commission that they wish to exempt from
excise duty the water content of stabilised water/diesel emulsions and water/heavy fuel
oil emulsions. The water/diesel emulsion will be used as motor fuel and also as
heating fuel. The water/heavy fuel oil emulsion will be used as heating fuel and also
for industrial purposes.

Articles 2(2) and 2(3) of Directive 92/81/EEC make the water content of
water/mineral oil emulsions subject to duty when the emulsion is used as heating fuel
or as motor fuel. However, the water content in the emulsion does not contribute to
energy release but simply aids fuel combustion, thus reducing pollutant emissions. The
Italian authorities therefore wish to exempt the water content from duty.

The other Member States have been informed thereof.

The Commission and all
the application of an
the Member States accept
exemption from excise duty of the water content of water/diesel emulsions and
water/heavy fuel oil emulsions will not give rise to distortions of competition or hinder
the operation of the internal market.

that

(6)

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 Treaty, nor does it

3

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).

3

override the requirement for Member States to notify instances of potential state aid to
the Commission under Article 88 of the Treaty.

(7)

(8)

(9)

(10)

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.

To ensure fair and equitable duty charging and to encourage the use of more
environmentally friendly fuels, Italy has requested authorisation to exempt the relevant
water content of water/diesel and water/heavy fuel oil emulsions from excise duty
from 1 October 2000.

The resultant differentiated rates of excise duty on these fuels will all respect the
minimum rates of excise duty set out in Directive 92/82/EEC4.

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, Italy is authorised to apply
differentiated rates of excise duty on water/diesel emulsions and water/heavy fuel oil
emulsions from 1 October 2000 until 31 December 2005 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 5 and 6 thereof.

This Decision is addressed to Italy.

Done at Brussels,

Article 2

For the Council
The President

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5

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).
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).

4