Proposal for a COUNCIL IMPLEMENTING DECISION authorising the Netherlands to apply a reduced level of taxation to electricity supplied to charging stations for electric vehicles
Date: 2016-10-25
Institutions: Directorate-General for Taxation and Customs Union, European Commission
Subjects: Netherlands, derogation from EU law, electric vehicle, electrical energy, energy-generating product, environmental tax, tax relief

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 25.10.2016  COM(2016) 677 final 2016/0332 (NLE)   Proposal for a COUNCIL IMPLEMENTING DECISION authorising the Netherlands to apply a reduced level of taxation to electricity supplied to charging stations for electric vehicles   
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

Taxation  of  energy  products  and  electricity  in  the  EU  is  governed  by  Council  Directive 
2003/96/EC 1 (hereafter referred to as the ‘Energy Taxation Directive’ or the ‘Directive’). 

Pursuant to Article 19(1) of the Directive, in addition to the provisions foreseen in particular 
in  its  Articles  5,  15  and  17,  the  Council,  acting  unanimously  on  a  proposal  from  the 
Commission, may authorise any Member State to introduce further exemptions or reductions 
in the level of taxation for specific policy considerations. 

Article  15(1)(e)  of  the  Directive  allows  Member  States  to  apply  a  tax  reduction  or  tax 
exemption to electricity used for the carriage of goods and passengers by rail, metro, tram and 
trolley bus. However there is no provision that allows for a tax reduction for electricity used 
for transportation by electric vehicles different from trolley buses. 

The objective of this proposal is to allow the Netherlands to apply, reduced level of taxation 
to  electricity,  supplied  to  charging  stations  for  electric  vehicles.  This  reduction  is  meant  to 
promote  the  use  of  cleaner  modes  of  transportation,  reduce  local  air  pollution  and  the  CO2 
emissions from transport.  

The request and its general context 

By  letter  dated  29  March  2016,  in  accordance  with  Article  19  of  the  Directive,  the  Dutch 
authorities  informed  the  Commission  that  they  intend  to  apply  a  reduced  tax  rate  of 
EUR 49.96 per MWh  to electricity supplied to charging stations for electric vehicles for the 
annual consumption of up to 10 MWh per charging station. The consumption over 10 up to 
50 MWh  would  be  taxed  at  the  rate  of  EUR 49.96,  the  consumption  over  50  up  to 
10 000 MWh  would  be  taxed  at  a  rate  of  EUR 13.31  and  the  annual  consumption  over 
10 000 MWh  would  be  taxed  at  a  rate  of  EUR 0.53.  For  charging  stations  which  are  not 
covered by the tax rates for business use, the annual consumption over 10 000 MWh would be 
taxed at a rate of EUR 1.07. The overall tax rate will be above the minimum rate of taxation 
for  electricity  for  business  use  as  laid  down  in  Directive  2003/96/EC.  The  national  rate  of 
taxation  currently  applicable  to  electricity  used  to  charge  electric  vehicles  for  the  initial 
10 MWh of the annual consumption is EUR 100.70 per MWh2 which is the national rate of 
taxation of electricity for business and non-business use for this consumption level. Currently 
the  Netherlands  applies  differentiated  national  tax  rates3  for  electricity  according  to  the 
quantity consumed in accordance with Article 5, of Directive 2003/96/EC.  

Supplementary  information  was  received  from  the  Netherlands  on  6  April,  20  June    and  18 
August 2016. 

1 

2 

3 

level  of 

Council Directive 2003/96/EC of 27 October 2003 restructuring the Community framework for taxation 
of energy products and electricity (OJ L 283 of 31.10.2003 p. 51). 
The 
January  2016 
is 
taxation  of  electricity 
http://ec.europa.eu/taxation_customs/taxation/excise_duties/energy_products/rates/index_en.htm). 
The  Netherlands  applies  differentiated  tax  rates  for  electricity  in  line  with  Article  5  of  Directive 
2003/96/EC on the basis of quantitative consumption levels. According to information provided in July 
2016,  the  national  tax  rates  are  as  follows:  EUR 100.70  per  MWh  for  0-10 MWh  of  electricity 
consumed annually, EUR 49.96 for quantities above 10 up to 50 MWh, EUR 13.31 for quantities above 
50  up  to  10 000 MWh.  For  consumption  above  10 000 MWh  the  tax  rates  are  EUR 0.53  for  business 
use and EUR 1.07 for non-business use.  

the  one  applicable 

(cf. 

in 

EN 

2 

   EN 

                                                 
The  Netherlands  would  apply  the  reduced  rate  of  taxation  on  electricity  to  supplies  of 
electricity  to  electric  vehicles  by  dedicated  public  and  private  charging  stations  for  electric 
vehicles.  The  charging  station  may  consist  of  one  or  more  charging  points,  each  capable  of 
charging  one  electric  vehicle  at  a  time.  The  charging  station  operators  and  the  private  or 
corporate entities entitled to apply the reduced rate will be obliged to submit a declaration to 
the electricity supplier stating that the grid connection is exclusively intended for the supply 
of  electricity  to  electric  vehicles.  The  request  made  by  the  Netherlands  excludes  from  the 
provision charging stations where the charging takes place with exchange of batteries, which 
means that the reduced rate will not apply in such cases.   

The overall rate of taxation, including the reduced rate for the initial 10 MWh of the annual 
consumption of each entity, would be well above the minimum level set in Annex I, Table C 
of Council Directive 2003/96/EC.  

According  to  the  Dutch  authorities,  in  case  the  charging  station  operator  intends  to  apply  a 
reduced  tax  rate  to  electricity  to  his  charging  stations,  he  would  be  obliged  to  submit  a 
declaration to the electricity supplier explaining which of his grid connections are exclusively 
intended for the supply of electricity to electric vehicles. The measure would apply only for 
the electricity supplied to the indicated connections for which the electricity supplier would 
apply  the  reduced  rate.  Furthermore  the  charging  station  operator  is  obliged  to  inform  the 
electricity supplier in case his undertaking is an undertaking in difficulties in the sense that he 
encounters financial problems and is eligible for aid in line with the Guidelines on State aid 
for  rescuing  and  restructuring  non-financial  undertakings  in  difficulty  (2014/C  249/01).  In 
that  case  the  supplier  will  no  longer  be  allowed  to  apply  the  reduced  energy  tax  rate  on 
electricity.  

The advantage derived from the rate in the energy tax will vary depending on the amount of 
megawatt hours. On basis of the information from the sector, the Netherlands estimates that 
on  average  1.8 MWh  is  supplied  per  charging  station.  In  that  case  the  maximum  advantage 
per charging station in 2016 is estimated at EUR 101 for the whole year. This advantage will 
grow if the standard energy tax rate increases. 

The (theoretical) maximum total advantage in 2016 will be reached if more than  50 MWh of 
electricity is supplied to a charging station, but this is difficult to be achieved in reality.  

Currently there are ten charging station operators in the Netherlands. 

The measure is open to all EU operators without discrimination. The country of origin of the 
operator  of  the  charging  station  is  not  a  condition  to  benefit  from  the  measure.  A 
transportation company or a household having a charging station could also benefit from the 
measure provided they fulfil the conditions mentioned above.  

Currently  there  is  not  a  positive  business  incentive  for  public  charging  stations.  This  is  an 
obstacle for the development of the public charging infrastructure and the use of electric cars. 
The  measure  aims  to  improve  the  business  case  of  public  charging  stations,  which  should 
make  the  use  of  electric  cars  more  attractive  and  improve  the  environment.  A  fast 
development  of  public  charging  infrastructure  is  of  vital  importance  for  the  transition  from 
vehicles with internal combustion engines running mostly on fossil fuels to electric vehicles. 
A well-developed infrastructure is necessary to make electric vehicles a feasible alternative to 
traditional  road  transport.  This  is  important  because  of  the  environmental  benefits  of  the 
transition  to  electric  driving.  Electric  vehicles  produce  less  CO2-emissions4  and  local  air 

4 

EN 

Cf. Energy consumption, CO2 emissions and other considerations related to Battery Electric Vehicles, 
European 
Vehicles 
(http://ec.europa.eu/transport/themes/strategies/consultations/doc/2009_03_27_future_of_transport/200

Association 

Electric 

Battery 

for 

3 

   EN 

                                                 
pollutants  (PM10,  NOx)  than  fossil  fuel  vehicles.  According  to  the  Dutch  authorities  the 
electricity  produced  by  coal  will  decrease  from  29 %  to  26 %  from  2014  to  2020  while  the 
electricity produced from renewables will increase from 11 % to 35 % from 2014 to 2020.  

The  charging  station  operator  would  have  the  option  to  pass  (part  of)  the  advantage  of  the 
measure on to their customers in the form of a reduction on the charging rates. In that case the 
cost of ownership of electric vehicles would be reduced due to lower costs for driving. This 
will create an incentive for consumers to choose a new electric car over a new fossil fuel car. 
Another  positive  effect  of  the  lower  charging  rates  is  that  the  owners  of  plug-in  hybrid 
vehicles that can run on electricity as well as on fossil fuel will be encouraged to use electric 
energy rather than fossil fuel for transportation. 

Arguments of the Netherlands concerning the period of application of the measure 

In  principle,  the  period  of  application  of  the  derogation  should  be  long  enough  in  order 
provide legal certainty to electricity operators, private or corporate entities. The Netherlands 
has  asked  for  four  years  compared  to  the  maximum  possible  six  years.  Under  these 
circumstances,  it  appears  appropriate  to  grant  the  authorisation  requested  for  period  of  four 
years as requested by the Netherlands and allowed by the Directive. 

Assessment of the measure under Article 19 of Directive 2003/96/EC 

Specific policy considerations 

Article 19(1), first subparagraph, of the Directive reads as follows:  

In addition to the provisions set out in the previous Articles, in particular in Articles 
5, 15 and 17, the Council, acting unanimously on a proposal from the Commission, 
may  authorise  any  Member  State to  introduce  further  exemptions  or  reductions  for 
specific policy considerations. 

According to the Dutch authorities the national measure in question fulfils this requirement. It 
follows from the intention of the Netherlands to reduce the emissions of greenhouse gases and 
air  pollutants  from  vehicles  and  support  the  EU  climate  change  objective  to  reduce  CO2 
emissions  and  increase  the  share  of  renewables  in  the  final  energy  consumption  in  the 
transport sector. It is considered that the possibility of tax reduction to electricity supplied to 
electric  vehicles  would  offer  to  consumers  additional  incentive  to  use  cleaner  energy  and 
improve the environment.  

• 

Consistency with existing policy provisions in the policy area 

According  to  Article  19(1),  third  subparagraph,  of  the  Directive,  each  request  shall  be 
examined  taking  into  account,  inter  alia,  the  proper  functioning  of  the  internal  market,  the 
need to ensure fair competition and EU health, environment, energy and transport policies. 

The general mechanics of the measure as described will not create any obstacles to intra-EU 
trade. The measure is open to all EU operators without discrimination. The country of origin 
of  the  operator  of  the  charging  station  is  not  a  condition  for  applying  the  measure.  The 
derogation  would  not  lead  to  any  problem  with  the  functioning  of  the  internal  market  and 
would not counteract the achievement of the EU's policy objectives especially in the fields of 
energy, climate change and environment.  

90408_eabev_%28scientific_study%29.pdf).  The  share  of  electricity  from  renewable  sources  in  the 
Netherlands  is  around  10 %  of  the  total  electricity  consumption  (see  the  Dutch  authorities'  2015 
Progress  report  on  Energy  from  renewable  sources  in  the  Netherlands  2013–2014,  Directive 
2009/28/EC). 

EN 

4 

   EN 

                                                                                                                                                         
• 

Consistency with other Union policies 

The  implementation  of  this  measure  will  contribute  to  the  reduction  of  the  emissions  from 
vehicles and support the EU's long term climate goals of reducing CO2 emissions. According 
to  estimations  provided  by  the  Dutch  authorities  the  expected  electricity  mix  in  the 
Netherlands  from  renewable  source  will  be  around  35 %  in  2020  and  will  reach  41 %  by 
2030.  According  to  the  Netherlands  the  electricity  used  in  public  charging  infrastructure 
almost  exclusively  originates  from  renewable  energy.  A  study5  carried  in  the  Netherlands 
shows that, this may lead to 70 % reduction in the CO2 emissions, which is fully in line with 
Directive 2009/28/EC on the promotion of the use of energy from renewable sources.  
This  initiative  is  fully  in  line  with  Directive  2014/94/EU6  on  the  deployment  of  alternative 
fuels  infrastructure.  This  directive  requires  Member  States  to  develop  national  policy 
frameworks  for  the  market  development  of  alternative  fuels  and  their  infrastructure,  in 
particular  in  urban/suburban  and  other  densely  populated  areas.  The  Directive  obliges 
Member States to install an appropriate number of publicly accessible charging stations by the 
end of 2020.  

Apart  from  the  greenhouse  gas  emissions  reductions,  more  widespread  use  of  electric  cars 
will significantly help in improving air quality. Urban pollution hot-spots are one the biggest 
challenges  and  emissions  from  transport  are  the  main  contributor  to  pollution  (especially  to 
NO2 exceedance) in this regard.  

The  Dutch  authorities  acknowledge  that  the  measure  constitutes  State  aid  in  favour  of  grid 
operators supplying electricity to electric vehicles, which may qualify as block exempted aid 
under Article 44 of the Commission Regulation 651/2014/EU7.  

Provided  that  the  measure  respects  the  conditions  laid  down  in  Article  44  of  the  General 
Block Exemption Regulation (Regulation 651/2014/EU) as well as the general conditions laid 
down therein, the measure falls within the scope of application of that Regulation and is by 
consequence exempt from the prior notification requirement. 

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

Article 19 of Council Directive 2003/96/EC. 

• 

Subsidiarity (for non-exclusive competence)  

The field of indirect taxation covered by Article 113 TFEU is not in itself within the exclusive 
competence of the EU within the meaning of Article 3 TFEU. 

However,  pursuant  to  Article  19  of  Directive  2003/96/EC,  the  Council  has  been  granted  an 
exclusive competence, as a matter of secondary law, to authorise a Member State to introduce 
further exemptions or reductions within the meaning of that provision. Member States cannot 
therefore substitute themselves for the Council. As a result, the principle of subsidiarity is not 
applicable  to  the  present  implementing  decision.  In  any  event,  since  this  act  is  not  a  draft 

5 
6 

7 

EN 

TNO ‘Energie- en milieu-aspecten van elektrische personenvoertuigen’, (7 April 2015), pp. 11 – 15. 
Directive  2014/94/EU  of  the  European  Parliament  and  of  the  Council  of  22  October  2014  on  the 
deployment of alternative fuels infrastructure (OJ L 307, 28.10.2014, pp. 1–20). 

Commission  Regulation  651/2014/EU declaring  certain  categories  of  aid compatible  with  the  internal 
market in application of Articles 107 and 108 of the Treaty (OJ L 187, 26.6.2014, pp. 1–78). 

5 

   EN 

                                                 
 
legislative act, it should not be transmitted to national Parliaments pursuant to Protocol No 2 
to the Treaties for review of compliance with the subsidiarity principle. 

The proposal therefore respects the principle of subsidiarity.  

• 

Proportionality 

The proposal respects the principle of proportionality. The tax reduction does not exceed what 
is necessary to attain the objective in question. 

• 

Choice of the instrument 

Instrument proposed: Council Implementing Decision. 

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Ex-post evaluations/fitness checks of existing legislation 

The measure does not require the evaluation of existing legislation. 

• 

Stakeholder consultations 

This proposal is based on a request made by the Netherlands and concerns only this Member 
State. 

• 

Collection and use of expertise 

There was no need for external expertise. 

• 

Impact assessment 

This proposal concerns an authorisation for an individual Member State upon its own request 
and  does  not  require  an  impact  assessment.  The  impact  on  prices  is  limited,  the  impact  on 
human  health  and  the  environment  is  positive  as  the  measure  aims  at  lowering  the  use  of 
fossil fuels and promote cleaner energy in tranport.  

• 

Regulatory fitness and simplification 

The measure does not provide for a simplification. It is the result of the request made by the 
Netherlands and concerns only this Member State. 

• 

Fundamental rights 

The measure has no bearing on fundamental rights. 

4. 

BUDGETARY IMPLICATIONS 

The  measure  does  not  impose  any  financial  and  administrative  burden  on  the  EU.  The 
proposal therefore has no impact on the EU budget. 

5. 

OTHER ELEMENTS 

• 

Detailed explanation of the specific provisions of the proposal 

Article  1  -  The  Netherlands  will  be  allowed  to  reduce  the  rate  for  electricity  supplied  to 
electric vehicles charging stations providing electricity to electric vehicles for a period of four 
years. 

EN 

6 

   EN 

 
The level of taxation after reductions can never be lower than the EU minima set in Directive 
2003/96/EC  and  the  reduction  would  apply  to  electricity  used  both  by  privite  and  business 
cars.  

The national measure provided by this decision is part of a policy designed by the Netherlands 
to  decrease  the  CO2  emissions,  improve  air  quality,  increase  the  share  of  renewables  in 
transport and contribute to the EU's climate change objective. The measure will provide for 
incentives for the consumers to switch to cleaner energy in transport.  

Article  2  –  This  article  provides  for  definitions  of  'electric  vehicles'  which  is  not  present  in 
Directive  2003/96/EC  and  which  is  in  line  with  existing  EU  legislation.  The  definition 
provides clarity about the scope of application of the measure. 

Article  3  –  The  authorisation  requested  is  granted  with  effect  from  1  January  2017  for  a 
period of four years, as requested by the Netherlands.  

EN 

7 

   EN 

2016/0332 (NLE) 

Proposal for a 

COUNCIL IMPLEMENTING DECISION 

authorising the Netherlands to apply a reduced level of taxation to electricity supplied to 
charging stations for electric vehicles  

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty on the Functioning of the European Union, 

Having  regard  to  Council  Directive  2003/96/EC  of  27  October  2003  restructuring  the 
Community framework for the taxation of energy products and electricity8, and in particular 
Article 19 thereof, 

Having regard to the proposal from the European Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

On 29 March 2016 and in accordance with Article 19(1) of Directive 2003/96/EC, the 
Netherlands  sought  authorisation  to  apply  a  reduced  rate  of  taxation  on  electricity 
supplied to electric vehicles. At the Commission’s request, the Netherlands provided 
additional information on 6 April 2016, 20 June and 18 August. 

The reduced rate of taxation aims at promoting the use of electric vehicles by reducing 
the costs for the electricity used to propel those vehicles. 

The  use  of  electric  vehicles  avoids  emissions  of  air  pollutants  originating  from  the 
combustion  of  petrol  and  diesel  or  other  fossil  fuels  and  therefore  contributes  to  an 
improvement  of  air  quality  in  cities.  The  use  of  electric  vehicles  can  furthermore 
reduce  CO2 emissions  where the electricity used is  produced from renewable energy 
sources. The measure is therefore expected to contribute to the environmental, health 
and climate policy objectives of the Union. 

The  Netherlands  requested  explicitly  that  the  reduced  rate  of  taxation  be  applied  to 
electricity supplied to electric vehicles for both business and non-business use and that 
charging stations that are not accessible to the public would also be covered. 

The Netherlands asked for the reduced rate of taxation on electricity to apply only to 
charging stations where the electricity is used to charge an electric vehicle directly and 
not to apply to electricity that is provided through the exchange of batteries. 

A  reduced  rate  of  taxation  on  electricity  supplied  to  electric  vehicles  via  charging 
stations will improve the business case of publicly accessible charging stations in the 
Netherlands, which should make the use of electric cars more attractive and result in 
improvements of air quality. 

Considering  the  limited  number  of  electric  vehicles  and  the  fact  that  the  level  of 
taxation on electricity supplied to electric vehicles via charging stations will be above 
the  minimum  level  of  taxation  for  business  use    laid  down  in  Article 10  of 
Directive 2003/96/EC,  the  measure  is  unlikely  to  lead  to  distortions  in  competition 

8 

OJ L OJ L 283, 31.10.2003, p. 51. 

EN 

8 

   EN 

                                                 
(8) 

(9) 

during  its  lifetime  and  will  thus  not  negatively  affect  the  proper  functioning  of  the 
internal market. 

The level of taxation on electricity supplied to electric vehicles via charging stations 
that  are  not  for  business  use  will  be  above  the  minimum  level  of  taxation  for  non-
business use laid down in Article 10 Of Directive 2003/96/EC. 

According to Article 19(2) of Directive 2003/96/EC, each authorisation granted under 
Article 19(1)  of  that  Directive  must  be  strictly  limited  in  time.  The  Netherlands 
requested  that  the  authorisation  is  granted  for  four  years  to  ensure  that  the 
authorisation  period  is  sufficiently  long  so  as  not  to  discourage  economic  operators 
from  making  the  necessary  investments.  This  decision  is  without  prejudice  to  the 
application of the Union rules regarding State aid, 

HAS ADOPTED THIS DECISION:  

Article 1 

The  Netherlands  is  authorised  to  apply  a  reduced  rate  of  taxation  on  electricity  supplied  to 
charging stations directly used for charging electric vehicles, excluding charging stations for 
exchange of batteries for electric vehicles, provided that the minimum levels of taxation laid 
down in Article 10 of Directive 2003/96/EC are respected. 

For the purpose of this Decision, the definition of 'electric vehicle' laid down in Article 2 of 
Directive 2014/94/EU of the European Parliament and of the Council9 shall apply. 

Article 2 

This Decision shall be applicable from 1 January 2017 until 31 December 2020. 

Article 3 

This Decision is addressed to the Kingdom of the Netherlands. 

Done at Brussels, 

Article 4 

For the Council 
The President 

9 

Directive  2014/94/EU  of  the  European  Parliament  and  of  the  Council  of  22  October  2014  on  the 
deployment of alternative fuels infrastructure (OJ L 307, 28.10.2014, p. 1). 

EN 

9 

   EN