Proposal for a COUNCIL IMPLEMENTING DECISION authorising Sweden to apply a reduced rate of taxation to electricity directly provided to vessels at berth in a port in accordance with Article 19 of Directive 2003/96/EC
Date: 2020-09-14
Institutions: Directorate-General for Taxation and Customs Union, European Commission
Subjects: Sweden, electrical energy, electricity supply, excise duty, harbour installation, tax relief, vessel

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 14.9.2020  COM(2020) 497 final 2020/0254 (NLE)  Proposal for a COUNCIL IMPLEMENTING DECISION authorising Sweden to apply a reduced rate of taxation to electricity directly provided to vessels at berth in a port in accordance with Article 19 of Directive 2003/96/EC  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

Taxation  of  energy  products  and  electricity  in  the  Union  is  governed  by  Council  Directive 
2003/96/EC of 27 October 2003 restructuring the Community framework for the taxation of 
energy products and electricity1 (the ‘Energy Taxation Directive’ or the ‘Directive’). 

Pursuant to Article 19(1) of the Directive, in addition to the provisions laid down 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. 

By virtue of Council Implementing Decision 2014/725/EU of 14 October 20142 (preceded by 
Council  Implementing  Decision  2011/384/EU  of  20  June  20113),  Sweden  has  already  been 
authorised to apply a reduced rate of taxation to electricity directly supplied to vessels, other 
than private pleasure craft4, berthed in ports (‘shore-side electricity’). 

The objective of this proposal is to extend that authorisation as requested by Sweden, given 
that the current derogation expired on 25 June 2020.  

By  letter  dated  15  August  2019,  the  Swedish  authorities  informed  the  Commission  of  their 
intention to prolong the current measure until 31 December 2023. Additional information was 
provided by letter dated 1 April 2020. 

The intention of the Swedish authorities is to continue to apply a reduced rate of SEK 5 (app. 
EUR  0.484)  (5)  per  MWh  of  electricity  tax  to  shore-side  electricity.  At  the  time  of  the 
submission of the request this tax rate was in accordance with the minimum rate of taxation 
for  electricity  for  business  use  as  laid  down  in  Directive  2003/96/EC.  Article  13  of  the 
Directive lays down a 5% tolerance limit for Member States that have not adopted the euro. 

It is recalled that Article 13 of the Energy Taxation Directive obliges Member States to check 
once a year if the tax rates expressed in national currencies are in line with the minimum rates 
of  the  Directive.  This  exercise  is  done  using  the  exchange  rates  published  in  the  Official 
Journal  of  the  European  Union  on  the  first  working  day  of  October.  Member  States  may 
maintain  the  amounts  of  taxation  in  force  at  the  time  of  the  annual  adjustment  only  if  the 
conversion  of  the  amounts  of  the  level  of  taxation  expressed  in  euro  would  result  in  an 
increase of less than 5% or EUR 5, whichever is  the lower  amount, in  the level  of taxation 
expressed in national currency. 

The requested period of  validity of the derogation is  from  26 June 2020 until  31 December 
2023,  which  is  in  continuity  with  the  current  derogation  and  within  the  maximum  period 
allowed by Article 19 of the Energy Taxation Directive. 

1 
2 
3 
4 

5 

OJ L 283, 31.10.2003, p. 51–70. 
OJ L 301, 21.10.2014, p. 27–28. 
OJ L 170, 30.06.2011, pp. 36–37. 
The  term  ‘private  pleasure  craft’  is  defined  in  Article  14(1)(c),  second  subparagraph  of  Directive 
2003/96/EC. 
All calculations are based on the exchange rate on 1 October 2018, i.e. SEK 10,3300 for EUR 1. Cf. OJ 
C 353/1 of 2.10.2018 

EN 

1 

  EN 

                                                 
The aim of reducing the tax is to encourage these vessels, which usually use an oil-propelled 
auxiliary  motor  for  their  electricity  supply,  to  use  shore-side  electricity  instead.  The 
provisions  lead  to  fewer  emissions  from  vessels  lying  at  berth,  thereby  reducing  the 
deposition  of  acidifying  substances,  which  is  a  problem  particularly  in  south-west  Sweden. 
The provisions are also  considered to lead to significant local environmental improvements, 
inter alia in the form of a reduction in noise levels. 

The reduction involves  lowering the energy tax applicable to  shore-side  electricity from  the 
otherwise applicable level of SEK 34.7 per MWh to SEK 5 per MWh. 

On the other hand, Article 14(1)(c) of the Energy Taxation Directive Member States have to 
exempt energy products used to produce electricity –and electricity produced- on board ships 
at berth in ports. They may also do so in the case of electricity produced on board ships for 
navigation  on  inland  waterways  according  to  Article  15(1)(f)  of  the  Directive.  Sweden 
confirmed the transposition of this latter optional exemption. 

Sweden  will  apply  the  reduced  rate  of  electricity  taxation  to  all  supplies  of  shore-side 
electricity  of  at  least  380 V  to  vessels  used  for  commercial  shipping  of  at  least  400  gross 
tonnage. The limit  is  considered  appropriate by  the Swedish  authorities  so as to  ensure that 
the absolute majority of vessels used in international traffic and larger vessels used in national 
traffic  will  be  covered  by  the  proposed  reduction.  These  are  the  vessels  considered  to  be 
responsible  for  the  largest  part  of  emissions  caused  by  the  running  of  auxiliary  motors  on 
board while berthed in ports. The reduction does not apply when the ship is used for private 
purposes or when it is laid up or has been taken out of service on a long-term basis. 

There is however no obligation for vessels to use shore-side electricity. 

The Swedish authorities acknowledge that the measure constitutes state aid. However, it falls 
within  the  scope  of  paragraphs  167-174  of  the  Commission  guidelines  on  state  aid  for 
environmental  protection  and  energy  2014  2020.  The  measure  also  meets  the  material 
conditions  in  Commission  Regulation  (EU)  No  651/2014  of  17  June  2014  declaring  certain 
categories of aid compatible with the internal market in application of Articles 107 and 108 of 
the Treaty (the ‘General Block Exemption Regulation’, ‘GBER’). 

The  Swedish  authorities  acknowledge  that  measure  favours  owners  of  ships  used  for 
commercial shipping. However, they consider it is neutral with respect to competition, since it 
is available to all ships (except ships for private use) at berth in Swedish ports. As regards the 
effect on trade between Member States, Sweden assumes that the effect will be negligible as 
the  choice  of  ports  depends  on  the  cargo's  destination  rather  than  on  the  reduced  costs  of 
berthing caused by the tax reduction for shore-side electricity. 

The annual budgetary expenditure is estimated at SEK 6 million. 

The measure is granted in the form of a repayment reducing the tax burden on the electricity 
concerned. 

The Swedish authorities consider that the tax reduction applied to shore-side electricity does 
not create a significant competitive benefit for vessel operators using shore-side electricity as 
opposed  to  those  using  on  board  generation.  If  only  the  electricity  cost  itself  and  the  tax  is 
taken  in  account,  then  the  cost  for  shore-side  electricity  with  a  lower  tax  rate  is  somewhat 
lower than the price for electricity produced on board. However, the total cost for the use of 
shore-side  electricity  is  also  affected  by  additional  costs  in  the  form  of  grid  charges, 
investments in the on-board connection and directly or indirectly the costs for investments in 
the port supply facilities. However, as the investments in the supply facilities in the ports and 

EN 

2 

  EN 

on  board  are  quite  costly,  the  Swedish  authorities  consider  that  a  lower  tax  rate  is  a 
prerequisite for ports and ship owners making these investments. 

The  aim  of  the  measure  is  to  reduce  the  environmental  impact  of  maritime  transport.  The 
measure  will  reduce  airborne  emissions  and  noise  from  vessels  lying  at  berth.  The  measure 
will go some way towards facilitating the achievement in the port cities of the limit values for 
nitrogen dioxide set  out  in  the Air  Quality  Directive (2008/50/EC). This  also  has  a positive 
impact on other air quality parameters around the ports. 

Sweden requested the authorisation to  be granted until  31 December 2023, starting from  26 
June 2020, without interruption with the current derogation and within the maximum period 
indicated in Article 19(2) of the Directive. 

• 

Consistency with existing policy provisions in the policy area 

Taxation of electricity is governed by Directive 2003/96/EC, in particular Article 10.  Article 
14(1)(c) provides for an obligatory tax exemption for energy products for navigation as well 
as for electricity produced on board a craft. Articles 5, 15 and  17 provide for the possibility 
for  Member  States  to  apply  tax  differentiations,  including  exemptions  and  reductions,  to 
certain  uses  of  electricity.  However,  as  such,  these  provisions  do  not  provide  for  reduced 
taxation of shore-side electricity. 

The  measure  constitutes  State  aid  and  falls  within  the  ambit  of  the  EU  legislation  on  this 
subject matter, in particular Commission Regulation 651/2014/EU6. 

Provisions under the Energy Taxation Directive 

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

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 
for  specific  policy 
Member  State 
considerations. 

further  exemptions  or  reductions 

introduce 

to 

The Commission has already recommended the use of shore-side electricity as an alternative 
to  the  generation  of  electricity  on  board  the  vessels  at  berth  and  thereby  recognised  its 
environmental advantages7.  

The  possibility  to  introduce  a  favourable  tax  treatment  to  shore-side  electricity  can  be 
envisaged  under  Article  19  of  the  Directive  since  its  purpose  is  to  allow  Member  States  to 
introduce further exemption or reductions for specific policy considerations.  

Sweden has requested that the measure should apply for approximately 3.5 years, less than the 
maximum period allowed by Article 19(2), i.e. 6 years. In principle, the period of application 
of  the  derogation  should  be  long  enough  in  order  not  to  discourage  port  operators  and 
electricity suppliers from continuing or starting to make the necessary investments in shore-

6 

7 

Commission  Regulation  (EU)  No  651/2014  of  17  June  2014  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, p. 1–78) 
Commission Recommendation 2006/339/EC of 8 May 2006 on the promotion of shore-side electricity 
for use by ships at berth in Community ports (OJ L 125, 12.5.2006). 

EN 

3 

  EN 

                                                 
side  electricity  facilities.  This  period  will  provide  the  legal  certainty  also  to  ship  operators, 
which have to plan their investments in on-board equipment.  

However,  the  derogation  should  not  undermine  future  developments  of  the  existing  legal 
framework  and  should  take  into  account  the  upcoming  revision  of  the  Energy  Taxation 
Directive  and  a  possible  adoption  by  the  Council  of  a  legal  act  based  on  a  Commission 
proposal for amendment of the Energy Taxation Directive. This review follows the evaluation 
of  the  Energy  Taxation  Directive8  and  the  Council  Conclusions  on  the  EU  energy  taxation 
framework from 28 November 20199. In its Conclusions, the Council invited the Commission 
to analyse and evaluate possible options with a view to publishing in due course a proposal 
for  the  revision  of  the  Energy  Taxation  Directive;  and  called  on  the  Commission  to  give 
particular  consideration  to  the  scope  of  the  Directive,  minimum  rates  and  specific  tax 
reductions and exemptions.  

Under  these  circumstances,  while  it  appears  appropriate  to  grant  the  authorisation  for  the 
requested  period,  the  validity  of  the  derogation  should  be  made  subject  to  the  entry  into 
application of general provisions in the matter at a point in time earlier than the end of 2023. 

State aid rules 

The  reduced  tax  rate  of  SEK  5  (app.  EUR  0.484)  (10)  per  MWh  envisaged  by  the  Swedish 
authorities was at the time of the submission of the request in accordance with the minimum 
rate of taxation for electricity for business use as laid down in Directive 2003/96/EC 

The  measure  thus  seems  to  fall  under  Article  44  of  Commission  Regulation  651/2014/EU, 
which  stipulates  the  conditions  under  which  aid  in  the  form  of  reductions  in  environmental 
taxes  under  Directive  2003/96/EC  can  be  exempted  from  the  State  aid  notification 
requirements. However it cannot be established at this stage whether all the conditions set in 
this  Regulation  are  fulfilled  and  the  proposal  for  a  Council  implementing  decision  does  not 
prejudge  the  Member  State’s  obligation  to  ensure  compliance  with  State  aid  rules,  in 
particular, in case of exempted aid, falling under Commission Regulation 651/2014/EU. 

• 

Consistency with other Union policies 

Environment and climate change policy 

The  requested  measure  concerns  mainly  the  EU's  environment  policy.  To  the  extent  that  it 
will help to reduce the burning of bunker fuels on board the vessels in ports, the measure will 
in fact contribute to the objective of improving local air quality, reducing noise and fighting 
climate  change.  Directive  2008/50/EC  on  Ambient  Air  Quality11  requires  Member  States  to 
ensure  that  the  levels  of  several  air  pollutants  are  kept  below  the  limit  values,  target  values 
and other air quality standards, established in the Directive. This obligation requires Member 
States  to  find  solutions  to  problems  such  as  ship  emissions  at  berth  in  ports  where  this  is 
relevant  and it is  conceivable that in  ports where these problems  exist the use of shore-side 
electricity  will  be  encouraged  as  one  element  of  the  overall  air  quality  strategy.  The  use  of 

8 
9 
10 

11 

SWD(2019) 329 final. 
Council conclusions of 28 November 2019, 14608/19, FISC 458.  
All calculations are based on the exchange rate on 1 October 2018, i.e. SEK 10,3300 for EUR 1. Cf. OJ 
C 353/1 of 2.10.2018 
Directive 2008/50/EC of the European Parliament and of the Council of 21 May 2008 on ambient air 
quality and cleaner air for Europe (OJ L 152, 11.6.2008, p 1). 

EN 

4 

  EN 

 
 
                                                 
shore-side  electricity  is  also  encouraged  under  Directive  (EU)  2016/80212  regulating  the 
sulphur content in marine fuels. 

According  to  the  Swedish  authorities,  the  use  of  shore-side  electricity  has  led  to  emission 
reductions  of  sulphur  dioxide,  nitric  oxides,  particulate  matters  and  carbon  oxides.  The 
Swedish  Authorities  do  not  presently  have  any  more  recent  estimates  of  the  emission 
reductions attributed to the measure. The full potential of the measure has not been reached 
since  costly  equipment  is  needed  both  on  quays  and  on  the  ships.  The  use  of  shore-side 
electricity  is  of  importance  in  the  Swedish  strive  to  meet  the  air  quality  standards  in 
accordance with the directive 2008/50/EC of 21 May 2008 on ambient air quality and cleaner 
air for Europe. 

Energy policy 

The  measure  is  in  line  with  Directive  2014/94/EU  on  the  deployment  of  alternative  fuels 
infrastructure13, which addresses the issue of installing shore-side electricity supply facilities 
in ports where there is demand for such facilities and the costs are not disproportionate to the 
benefits,  including  environmental  benefits.  It  has  also  been  recognised  as  an  objective  of 
common interest for the granting of State aid under Article 107(1) of TFEU14. 

It has to be recalled at this point that one important reason for the unfavourable competitive 
position of shore-side electricity lies in the fact that the alternative, i.e. electricity produced on 
board the vessels while in maritime ports, currently enjoys a full net tax exemption: not only 
is  the  bunker  fuel  burnt  for  generating  the  electricity  exempt  from  taxation,  which 
corresponds to the normal situation under Article 14(1)(a) of Directive 2003/96/EC, but also 
the electricity produced on board the vessels is itself exempt (cf. Article 14(1)(c) of Directive 
2003/96/EC). Although the latter exemption could as such be considered difficult to reconcile 
with the environmental objectives of the Union, it mirrors considerations of practicability. In 
fact,  taxation  of  the  electricity  produced  on  board  would  require  a  declaration  by  the  ship 
owner  –  often  established  in  a  third  country  –  or  operator  of  the  amount  of  electricity 
consumed. The declaration would furthermore have to  determine the share of the electricity 
consumed in the territorial waters of the Member State where the tax is due. It would create a 
huge  administrative  burden  for  ship-owners  to  have  to  make  such  declarations  for  every 
Member States whose territorial waters are concerned. 

Transport policy 

The measure is in line with Commission recommendation 2006/339/EC on the promotion of 
shore-side  electricity  for  use  by  ships  at  berth  in  Union  ports15  and  with  the  Commission 
Communication  Strategic  goals  and  recommendations  for  the  EU's  maritime  transport 
policy16. 

12 

13 

14 
15 

16 

Directive (EU) 2016/802 of the European Parliament and of the Council of 11 May 2016 relating to a 
reduction in the sulphur content of certain liquid fuels (OJ L 132, 21.5.2016, p. 58–78). 
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) 
C(2014) 2231 final of 9 April 2014. 
Commission Recommendation 2006/339/EC of 8 May 2006 on the promotion of shore-side electricity 
for use by ships at berth in Community ports (OJ L 125, 12.5.2006) 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic  and  Social  Committee  and  the  Committee  of  the  Regions  –  Strategic  goals  and 

EN 

5 

  EN 

                                                 
Internal market and fair competition 

From the point of view of the internal market and fair competition the measure only reduces 
the existing tax distortion between two competing sources of electricity for boats at berth, i.e. 
on board generation and shore-side electricity, caused by the tax exemption for bunker fuels. 

The Swedish authorities have not observed considerable changes in the ship owners’ choice of 
ports linked to the availability of shore-side electricity facilities. Presently mainly ferries and 
route bound traffic make use of the shore-side electricity. The ship owners’ choice of port is 
not  based  on  whether  shore  side  electricity  is  supplied  or  not.  According  to  stake  holders 
cruise liners often choses berths where shore-side electricity is available. 

Furthermore,  access  to  shore-side  electricity  will  be  available  for  the  ships  concerned 
regardless  of  their  flag  without  leading  to  a  more  advantageous  tax  treatment  of  national 
economic operators over their competitors from other EU Member States. 

Concerning competition between ports, it can be expected that any potential impact on trade 
between  Member  States,  which  could  result  if  vessels  alter  their  routes  because  of  the 
possibility  to  consume  shore-side  electricity  at  a  reduced  tax  rate,  will  be  negligible.  In  a 
situation where, as stated above, the use of shore-side electricity is, at least in the short term, 
unlikely to become more economic than on-board generation in spite of the tax reduction, this 
tax  reduction  for  shore-side  electricity  is  also  unlikely  to  significantly  distort  competition 
between ports by inducing vessels to change their itinerary according to the availability of this 
option. 

The  timeframe  for  which  it  is  proposed  to  prolong  the  authorization  to  apply  a  reduced  tax 
rate, unless there will be significant changes in the current framework and situation, makes it 
unlikely that the analysis conducted in the preceding paragraphs will change before the date 
of expiry of the measure. 

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  of  TFEU  is  not  in  itself  within  the 
exclusive competence of the European Union within the meaning of Article 3 of 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 
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. 

recommendations for the EU's maritime transport policy until 2018, COM(2009) 8 final of 21 January 
2009. 

EN 

6 

  EN 

                                                                                                                                                         
• 

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 

The  instrument  proposed  is  a  Council  implementing  decision.  Article  19  of  Directive 
2003/96/EC makes provision for this type of measure only. 

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 Sweden 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 information provided by Sweden suggests that the measure will have a limited impact on 
tax  revenues.  In  more  detail,  an  estimation  of  the  tax  expenditures  from  the  measure, 
according  to  the  Swedish  authorities,  a  loss  of  SEK  6  million  per  year  is  expected  for  the 
coming years. 

Sweden  expects  the  measure  to  have  a  positive  impact  on  the  achievement  of  its 
environmental  goals  and  in  particular  the  improvement  of  air  quality  in  accordance  with 
Directive 2008/50/EC on ambient air quality and cleaner air for Europe. The use of shore-side 
electricity has led to emission reductions of sulphur dioxide, nitric oxides, particulate matter 
and  carbon  oxides.  The  full  potential  of  the  measure  has  not  been  reached  since  costly 
equipment is needed both on quays and on the ships. 

• 

Regulatory fitness and simplification 

The  measure  does  not  provide  for  a  simplification.  It  is  the  result  of  the  request  made  by 
Sweden 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  or  administrative  burden  on  the  Union.  The 
proposal therefore has no impact on the budget of the Union. 

EN 

7 

  EN 

5. 

• 

OTHER ELEMENTS 

Implementation plans and monitoring, evaluation and reporting arrangements 

An  implementation  plan  is  not  necessary.  This  proposal  concerns  an  authorisation  for  a  tax 
reduction  for  an  individual  Member  State  upon  its  own  request.  It  is  provided  for  a  limited 
period until 31 December 2023. The tax rate that will apply will have to be in accordance with 
the  minimum  level  of  taxation  set  by  the  Energy  Taxation  Directive.  The  measure  can  be 
evaluated in case of a request for a renewal after the validity period has expired. 

• 

Explanatory documents (for directives) 

The proposal does not require explanatory documents on the transposition.  

• 

Detailed explanation of the specific provisions of the proposal 

Article 1 stipulates that Sweden will be allowed to apply a reduced rate of electricity taxation 
to electricity directly supplied to vessels, other than private pleasure craft, berthed in Swedish 
ports (‘shore-side electricity’). The tax rate must be in line with the minimum level of taxation 
for electricity for business use set by the Directive. It will not be possible to supply electricity 
at a reduced rate to private pleasure craft as defined in Article 14(1)(c), second subparagraph 
of Directive 2003/96/EC. 

Article 2 stipulates that the authorisation requested is granted with effect from 26 June 2020, 
in  continuity  with  the  current  Council  Implementing  Decision  2014/725/EU,  until  31 
December 2023, within the maximum period of 6 years allowed by the Directive, as requested 
by Sweden. 

EN 

8 

  EN 

2020/0254 (NLE) 

Proposal for a 

COUNCIL IMPLEMENTING DECISION 

authorising Sweden to apply a reduced rate of taxation to electricity directly provided to 
vessels at berth in a port in accordance with Article 19 of Directive 2003/96/EC 

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 electricity1, and in particular 
Article 19 thereof, 

Having regard to the proposal from the European Commission, 

Whereas: 

(1) 

(2) 

By Council Implementing Decision 2014/725/EU2 Sweden was authorised to apply a 
reduced  rate  of  taxation  to  electricity  directly  provided  to  vessels  at  berth  in  a  port 
(‘shore-side electricity’) in accordance with Article 19 of Directive 2003/96/EC until 
25 June 2020. 

By  letter  of  15  August  2019,  Sweden  sought  authorisation  to  continue  to  apply  a 
reduced  rate  of  electricity  tax  to  shore-side  electricity  pursuant  to  Article  19  of 
Directive  2003/96/EC.  The  Swedish  authorities  provided  additional  information  by 
letter dated 1 April 2020. 

(3)  With  the  reduced  tax  rate  that  it  intends  to  apply,  Sweden  aims  at  continuing  the 
promotion of the use of shore-side electricity. The use of such electricity is considered 
to  be  an  environmentally  less  harmful  way  to  satisfy  the  electricity  needs  of  vessels 
lying at berth in ports than, with the burning of bunker fuels by those vessels. 

(4) 

(5) 

Insofar  as  the  use  of  shore-side  electricity  avoids  emissions  of  air  pollutants 
originating from the burning of bunker fuels, it contributes to an improvement to the 
local air quality in port cities and to noise reduction. The measure is therefore expected 
to contribute to the environmental, health and climate policy objectives of the Union. 

Allowing Sweden to apply a reduced rate of taxation to shore-side electricity does not 
go  beyond  what  is  necessary  to  increase  the  use  of  such  electricity,  since  on-board 
generation  of  electricity  will  remain  the  more  competitive  alternative  in  most  cases. 
For  the  same  reason,  and  because  of  the  current  relatively  low  degree  of  market 
penetration of the technology, the measure is unlikely to lead to significant distortions 
in  competition  during  its  lifetime  and  will  thus  not  negatively  affect  the  proper 
functioning of the internal market. 

(6) 

In accordance with Article 19(2) of Directive 2003/96/EC, each authorisation granted 
under  that  provision  is  to  be  strictly  limited  in  time.  In  order  to  ensure  that  the 

1 
2 

OJ L 283, 31.10.2003, p. 51. 
OJ L 301, 21.10.2014, p. 27–28. 

EN 

9 

  EN 

                                                 
authorisation  period  is  sufficiently  long  so  as  not  to  discourage  relevant  economic 
operators  from  making  the  necessary  investments,  it  is  appropriate  to  grant  the 
authorisation  until  31  December  2023.  However,  the  authorisation  should  cease  to 
apply  from  the  date  of  application  of  any  general  provisions  on  tax  advantages  for 
shore-side electricity adopted by the Council under Article 113 or any other relevant 
provision  of  the  Treaty  on  the  Functioning  of  the  European  Union,  should  such 
provisions become applicable prior to 31 December 2023.  

(7) 

In order to provide legal certainty to port and ship operators and to avoid a potential 
increase  in  the  administrative  burden  for  the  distributors  and  redistributors  of 
electricity, it should be ensured that Sweden may continue to apply a reduced rate of 
taxation  to  shore-side  electricity.  The  authorisation  requested  should  therefore  be 
granted with effect from 26 June 2020, in order to follow seamlessly on from the prior 
arrangements under Council Implementing Decision 2014/725/EU. 

(8) 

This  Decision  is  without  prejudice  to  the  application  of  Union  rules  regarding  State 
aid, 

HAS ADOPTED THIS DECISION:  

Article 1 

Sweden  is  authorised  to  apply  a  reduced  taxation  rate  to  electricity  directly  supplied  to 
vessels, other than private pleasure craft, berthed in ports (‘shore-side electricity’), provided 
that  the  minimum  levels  of  taxation  referred  to  in  Article  10  of  Directive  2003/96/EC  are 
respected. 

Article 2 

This Decision shall apply from 26 June 2020 until 31 December 2023. 

However,  should  the  Council,  acting  on  the  basis  of  Article  113  or  any  other  relevant 
provision of the Treaty on the Functioning of the European Union, provide for general rules 
on tax advantages for shore-side electricity, this Decision shall cease to apply on the day on 
which those general rules become applicable. 

This Decision is addressed to the Kingdom of Sweden. 

Done at Brussels, 

Article 3 

For the Council 
The President 

EN 

10 

  EN