Proposal for a Council Directive amending Directive 92/81/EEC with regard to the possibility of applying a reduced rate of excise duty on certain mineral oils containing biofuels and on biofuels
Date: 2001-11-07
Institutions: European Commission
Subjects: EU environmental policy, common transport policy, excise duty, mineral oil, road transport, substitute fuel

30.4.2002

EN

Official Journal of the European Communities

C 103 E/217

Proposal for a Council Directive amending Directive 92/81/EEC with regard to the possibility of
applying a reduced rate of excise duty on certain mineral oils containing biofuels and on biofuels

(2002/C 103 E/15)

(Text with EEA relevance)

COM(2001) 547 final — 2001/0266(CNS)

(Submitted by the Commission on 17 December 2001)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community, and in particular Article 93 thereof,

Having regard to the proposal of the Commission,

Having regard to the opinion of the European Parliament,

Having regard to the opinion of the Economic and Social
Committee,

Whereas:

(1) Article 6 of

the Treaty provides that environmental
protection should be integrated into Community policies
with a view to promoting sustainable development.

(2) As a party to the United Nations Framework Convention
on Climate Change, approved by Council Decision
94/69/EC (1), the Community has undertaken to take the
necessary steps to stabilise greenhouse gas concentrations
in the atmosphere at a level
that would preserve the
climate from any dangerous upheaval.

(3) In its resolution of 8 June 1998 (2), the Council endorsed
the Community strategy and action plan on renewable
energy proposed by the Commission and called for
fuels
specific measures on biofuels — that
derived from renewable resources.

is to say,

(4) The Communication of

the Commission entitled ‘A
Sustainable Europe for a Better World: A European
Sustainable Development’ (3),
Union
highlights
fuels,
including biofuels, in tackling climate change and in the
development of clean energies.

for
important

Strategy
the

alternative

role of

(5) Development of biofuels encourages diversity in the
Community's energy sources and thereby contributes to
the medium and long-term security of its energy supply.

(1) OJ L 33, 7.2.1994, p. 11.
(2) OJ C 198, 24.6.1998, p. 1.
(3) COM(2001) 264 final/2, 19.6.2001.

(6) The relative prices of energy products are key factors in
the Community's environmental protection, energy and
transport policies. As biofuels are subject
to taxation
under Council Directive 92/81/EEC of 19 October 1992
on the harmonisation of the structures of excise duties on
mineral oils (4), appropriate differentiation of excise rates
would contribute to the development of
the biofuel
industry by lowering the high cost of producing biofuels
as compared to fossil fuels.

(7) It

is

therefore desirable

to establish a Community
framework for reducing excise duties so as to promote
biofuels, thereby contributing to the better functioning of
the internal market and affording Member States and
economic operators a sufficient degree of legal certainty.

(8) The tax differentiation measures should form part of a
coherent package of technical, regulatory and economic
measures. Directive
European
Parliament and of
. . . 2001 [on the
the Council of
promotion of the use of biofuels for transport] sets a
compulsory minimum percentage of biofuels
in all
motor fuels sold.

2001/. . ./EC of

the

(9) Member States should be allowed the necessary flexibility
to formulate and implement policies adapted to national
circumstances.

(10) Distortions of competition should be limited and the
incentive of a reduction in the basic costs for producers
and distributors of biofuels should be maintained through
inter alia the application by Member States of excise
reduction mechanisms reflecting changes in the quoted
prices for raw materials.

(11) In some cases, reduced rates of excise duty which are
lower than the minimum rates laid down by Council
Directive 92/82/EEC of 19 October 1992 on the approxi-
mation of the rates of excise duties on mineral oils (5)
should be allowed.

(12) Special measures are required for local public passenger
transport,
including taxis, and public authority-operated
vehicles. A transitory period should be allowed in
favour of unblended biofuels, which have been totally
exempted from excise duty since 1 January 2001.

(4) 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).

(5) OJ L 316, 31.10.1982, p. 19; Directive as last amended by

Directive 94/74/EC.

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(13) Excise differentiation measures achieved under

fiscal
control may be supplemented by additional exemptions
or reductions according to the procedure under Article
8(4) of Directive 92/81/EEC. No later than 31 December
2007, the Commission should report to the Council on
these additional measures.

(20) Directive 92/81/EEC should therefore be

amended

accordingly,

HAS ADOPTED THIS DIRECTIVE:

Article 1

(14) The duration of reductions in excise rates should be
limited so as to enable their application to be monitored.

Directive 92/81/EEC is hereby amended as follows:

(15) A multiannual programme of a maximum length of six
years is sufficient for planning investment projects in the
sectors concerned.

(16) Certain biofuels,

if

intended for use as motor fuel or
heating fuel, should be treated as mineral oils in order
to bring them within the scope of Council Directive
92/12/EEC of 25 February 1992 on the
general
arrangements for products subject to excise duty and on
such
the holding, movement
products (1).
should define at
Community level what is to be understood by a product
intended for use as motor fuel or heating fuel.

Implementing measures

and monitoring of

(17) The provisions of this Directive shall be without prejudice
to the application of Article 27(1)(a) and (b) of Council
Directive 92/83/EEC of 19 October 1992 on the harmon-
isation of the structures of excise duties on alcohol and
compulsory
alcoholic
exemption of denatured alcohol and the arrangements
for its distribution, in view of the fact that the present
tax arrangements should be applied solely to the specific
case of denatured alcohol used as a fuel or fuel additive in
accordance with Article 2(3) of Directive 92/81/EEC.

beverages (2),

regards

the

as

(18) Since the measures necessary for the implementation of
this Directive are measures of general scope within the
meaning of Article 2 of Council Decision 1999/468/EC of
28 June 1999 laying down the procedures for the exercise
of implementing powers conferred on the Commission (3),
they should be adopted by use of
regulatory
procedure provided for in Article 5 of that Decision.

the

information purposes,

(19) Member States should communicate to the Commission,
tax measures
the national
for
which they
adopt on biofuels. The obligation to
communicate this information does not release Member
States from the obligation of notification provided for in
Article 88(3) of
the Treaty. This Directive does not
prejudice the outcome of any future State aid procedure
that may be undertaken in accordance with Articles 87
and 88 of the Treaty.

(1) OJ L 76, 23.3.1992, p. 1; Directive as last amended by Directive

2000/47/EC (OJ L 193, 29.7.2000, p. 73).

(2) OJ L 316, 31.10.1992, p. 21.
(3) OJ L 184, 17.7.1999, p. 23.

1. In Article 2(1), the following points are added:

‘(m) products falling within CN codes 1507 to 1518, if
they are intended for use as heating fuel or motor
fuel;

(n) products falling within CN code 2905 11 00 which
are not of synthetic origin, if they are intended for
use as heating fuel or motor fuel.’

2. In Article 2a(1), the following points shall be added:

‘(f) products falling within CN codes 1507 to 1518,

if
these are intended for use as heating fuel or motor
fuel;

(g) products falling within CN code 2905 11 00, which
if these are intended for

are not of synthetic origin,
use as heating fuel or motor fuel.’

3. The following Article 2b is inserted:

‘Article 2b

For the purpose of Article 2(1)(m) and (n) and Article
2a(1)(f) and (g), the meaning to be assigned to products
intended for use as heating fuel or motor fuel shall be
defined in accordance with the procedure referred to in
Article 9a(2).’

4. The following point IIa is to be inserted:

‘IIa. Reductions for biofuels

Article 8b

From 1 January 2002 to 31 December 2010, Member
States may, without prejudice to Article 8f, apply a
reduced rate of excise duty under fiscal control on the
taxable products referred to in Article 2 where such
products are made up of, or contain, one or more of
the following biofuels:

(a) products falling within CN codes 1507 to 1518, 4401

and 4402;

(b) products falling within CN codes 2207 20 00 and

2905 11 00 which are not of synthetic origin;

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(c) products produced from biomass;

Article 8e

(d) water (CN codes 2201 and 2851 00 10).

“Biomass”
fraction of
shall mean the biodegradable
products, waste and residues from agriculture (including
forestry and related
vegetal
substances),
fraction of
industries, as well as
industrial and municipal waste.

the biodegradable

and animal

Article 8c

1.
The reduction in excise duty resulting from the
application of the reduced rate laid down in Article 8b
than the amount of excise duty
may not be greater
payable on the volume of biofuels present
in the
products eligible for the reduction.

2.
The levels of taxation applied by Member States on
the products made up of or containing biofuels referred to
in Article 8b may be lower than the minimum rates
specified in Directive 92/82/EEC.

the level of

However,
if
intended for use, offered for sale or used as motor fuel,
may not be lower than 50 % of the normal rate of excise
duty applied by the Member State on corresponding fuels.

these products,

taxation of

“Level of taxation” shall mean the total amount of all
indirect taxes charged, except value added tax, calculated
directly or indirectly on the quantity of product consumed.

The Member States, which on 1 January 2001 totally
solely made up of biofuels, may
until

products

exempt

those

3.
exempted products
continue
31 December 2003.

totally

to

Article 8d

1.
Products made up of or containing biofuels referred
to in Article 8b, used by local public passenger transport,
including taxis, and by vehicles operated under the respon-
sibility of a public authority may qualify, under fiscal
control, for an additional reduction of a value equivalent
to the reduction provided for Article 8b.

2.
The limit laid down in the second subparagraph of
Article 8c(2) shall not apply in the case provided for in
paragraph 1.

The reduction in excise duty applied by Member States
shall be adjusted to take account of changes in raw
material prices to avoid over-compensating for the extra
costs involved in the manufacture of biofuels in the event
of a sustained rise in the price of crude oil.

Adjustments shall be made according to the variation in
crude oil prices over the previous twelve months. The
price variations
shall be calculated using the “Brent
dated” monthly average oil price.

Article 8f

1.
The reduction provided for in Article 8b may be
granted under a multiannual programme by means of an
authorisation issued by an administrative authority to an
economic operator for more than one calendar year. The
reduction authorised may not be applied for a period of
more than six consecutive years. This period may be
renewed.

2.
As part of a multiannual programme authorised by
an administrative authority prior to 31 December 2010,
Member States may apply the reduction under Article 8b
after 31 December 2010 and until the end of the multi-
annual programme, no renewal being permitted.

Article 8g

Member States shall communicate to the Commission the
schedule of excise duty reductions applied in accordance
with point IIa by 31 December 2002 and every twelve
months thereafter.

Article 8h

No later than 31 December 2007 the Commission shall
report to the Council on the fiscal, economic, agricultural,
the
industrial and environmental aspects of
energy,
reductions granted in accordance with this point
IIa.
Additional exemptions or reductions granted in favour of
biofuels according to the procedure of Article 8(4) of
Directive
reviewed. The
Commission shall, if necessary, put forward proposals for
their abolition, amendment or extension.’

92/81/EEC shall

also

be

5. Point IV is hereby amended as follows:

(a) The title is replaced by the following words:

‘General and final provisions’;

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(b) The following Article 9a is added:

Article 2

‘Article 9a

1.
The Commission shall be assisted by the Excise
Committee set up by Article 24(1) of Directive
92/12/EEC.

Member States shall bring into force the laws, regulations and
administrative provisions necessary to comply with this
Directive by 31 December 2002 at the latest.

When Member States adopt those provisions, they shall contain
a reference to this Directive or be accompanied by such a
reference on the occasion of
their official publication.
Member States shall determine how such reference is to be
made.

2. Where reference is made to this paragraph, the
laid down in Article 5 of
regulatory procedure
Decision 1999/468/EC shall apply,
in compliance
with Article 7 thereof.

Article 3

This Directive shall enter into force on the twentieth day
following that of its publication in the Official Journal of the
European Communities.

The period provided for

3.
Decision 1999/468/EC shall be three months.’

in Article 5(6) of

Article 4

This Directive is addressed to the Member States.