Proposal for a COUNCIL IMPLEMENTING DECISION authorising the Netherlands 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: 2021-04-29
Institutions: Directorate-General for Taxation and Customs Union, European Commission
Subjects: Netherlands, electrical energy, electricity supply, excise duty, harbour installation, tax relief, vessel

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   EUROPEAN COMMISSION  Brussels, 29.4.2021  COM(2021) 209 final 2021/0108 (NLE)  Proposal for a COUNCIL IMPLEMENTING DECISION authorising the Netherlands 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. 

The  Netherlands  asked  to  be  authorised  to  apply  a  reduced  rate  of  taxation  to  electricity 
supplied  to  shore-side  electricity  installations  supplying  electricity  to  vessels  at  berth,  other 
than private pleasure craft, for a period of six years. The objective of this proposal is to grant 
that authorisation by means of a derogation valid, as requested, until 30 June 2027.  

By  letter  dated  10  August  2020,  the  Dutch  authorities  informed  the  Commission  of  their 
intention to apply the measure. 

The  Netherlands  is  seeking  for  an  authorisation  to  apply  a  reduced  tax  rate  of  EUR 
0.50/MWh, equal to the minimum rate of taxation for the supply of electricity to installations 
supplying  electricity  entirely  or  almost  entirely  (90%  or  more)  to  vessels  not  being  private 
pleasure craft. The reduced rate will only apply if the installation has a direct connection to 
the electric grid, to ensure correct application of the reduced rate. 

The requested period of validity is from 1 July 2021 until 30 June 2027, which is within the 
maximum period allowed by Article 19 of the Energy Taxation Directive. 

This reduction aims to provide an economic incentive for the deployment and use of shore-
side  electricity  in  order  to  contribute  to  sustainable  ports  and  sustainable  shipping  and  to 
reduce  air  pollution  in  port  cities,  improve  local  air  quality  and  reduce  noise  for  the  health 
benefit of inhabitants. 

The  objective  of  the  measure  to  be  applied  by  the  Netherlands  is  also  to  reduce  the  overall 
environmental impact of water-borne transport. 

With the requested measure the Netherlands wants to give an incentive for the use of shore-
side electricity which is considered a less polluting alternative to the generation of electricity 
on board vessels lying at berth in a port. As indicated in the request, the reduced rate for the 
beneficiaries will be EUR 0.50/MWh. This is the minimum rate for electricity as specified in 
Article 10(1) and Table C of Annex I to the Directive. Due to the degressive structure of the 
energy tax, the relative advantage will be higher for operators (and users) of installations with 
a relative low consumption.  

On the other hand, according to  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. The exemption may also apply in the case of energy products 

1 

OJ L 283, 31.10.2003, p. 51–70. 

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used to produce electricity -and electricity produced- on board ships for navigation on inland 
waterways  according  to  Article  15(1)(f)  of  the  Directive,  which  was  transposed  into  Dutch 
law.  

The  Dutch  authorities  have  indicated  that  the  tax  reduction  applies  to  all  ships  other  than 
private pleasure craft, meaning that all ships involved in commercial navigation, regardless of 
size  or  flag,  can  benefit  from  the  tax  reduction.  Generator  bans  for  inland  shipping  are  in 
place in certain ports. 

As indicated in the request, in the inland waterway sector, most of the around 12.500 national 
and international inlands ships make use of shore-side electricity, which is available in most 
berths  along  the  main  corridors.  There  are  currently  very  few  shore-side  electricity 
installations in the maritime sector, where their use by larger seagoing ships is limited to one 
RoRo  ship  and  to  fishing  ships  (trawlers)  in  the  ports  of  Scheveningen  and  IJmuiden. 
However,  the  Dutch  authorities  plan  to  increase  the  availability  of  shore-side  electricity  for 
seagoing ships. 

The  measure  is  not  available  to  businesses  in  financial  difficulties,  or  businesses  which  are 
subject  to  recovery  orders  on  the  basis  of  an  earlier  Commission  decision  declaring  an  aid 
measure to be unlawful and incompatible with the internal market. 

The annual budgetary expenditure is estimated at EUR 1 million. 

The Netherlands requested the authorisation to be granted until 30 June 2027, starting from 1 
July 2021, within the maximum period allowed by Article 19(2) of the Directive. 

With the tax reduction, the Netherlands wants to provide an incentive for relevant operators to 
develop  and  use  shore-side  electricity  in  order  to  reduce  airborne  emissions  and  noise  from 
the  combustion  of  fuels  by  vessels  at  berth  as  well  as  CO2  emissions.  The  application  of  a 
reduced tax rate would strengthen the competitiveness of shore-side electricity relative to the 
burning of bunker fuels on board, which is tax exempt.  

• 

Consistency with existing policy provisions in the policy area 

Taxation  of  electricity  is  governed  by  the  Energy  Taxation  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/EU2. 

Provisions under the Energy Taxation Directive 

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 

2 

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). 

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Member  State 
considerations. 

to 

introduce 

further  exemptions  or  reductions 

for  specific  policy 

By  means  of  the  tax  reduction  in  question,  the  Dutch  authorities  pursue  the  objective  to 
promote an environmentally less harmful way for ships to satisfy their electricity needs while 
lying  at  berth  in  ports  and  hence  to  improve  local  air  quality  and  reduce  noise.  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  advantages3.  Beneficiaries  would  be  charged  the  EU  minimum  tax  rate  for 
electricity  under  the  Energy  Taxation  Directive  of  EUR  0.50/MWh  which  can  contribute  to 
the stated policy objectives. 

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.  

The Netherlands has requested that the measure applies for the maximum period allowed by 
Article  19(2)  of  the  Directive  (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  starting  -or  continuing-  to  make  the  necessary  investments  in  shore-side 
electricity  facilities.  That  period  will  provide  the  maximum  possible  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.  Such  review  follows  the 
evaluation of the Energy Taxation Directive4 and the Council Conclusions on the EU energy 
taxation  framework  from  28  November  20195.  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. It also called on the Commission 
to give particular consideration to the scope of the Directive, to minimum rates and to 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 June 
2027.  

State aid rules 

The reduced tax rate of EUR 0.50 per MWh envisaged by the Dutch authorities is equal to the 
EU  minimum  level  of  taxation  for  electricity  for  business  use  pursuant  to  Article  10  of 
Directive 2003/96/EC.  

The  measure  thus  seems  to  fall  under  Article  44  of  Commission  Regulation  651/2014/EU 
(GBER),  which  stipulates  the  conditions  under  which  aid  in  the  form  of  reductions  in 

3 

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5 

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). 
SWD(2019) 329 final. 
Council conclusions of 28 November 2019, 14608/19, FISC 458.  

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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.  

As  indicated  in  their  request,  the  Dutch  authorities  will  inform  the  Commission  of  the 
measure within 20 working days following its entry into force. 

• 

Consistency with other Union policies 

Environment and climate change policy 

The requested measure concerns mainly the EU's environment and climate change policy. To 
the extent that it will help reduce the burning of bunker fuels on board the vessels in ports, the 
measure will contribute to the objective of improving local air quality and reducing noise. In 
its  Article  13,  Directive  2008/50/EC  on  Ambient  Air  Quality6  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  are  respected.  Those  obligations 
require 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 those problems exist, the use of 
shore-side electricity is encouraged as one element of the overall air quality strategy. The use 
of  shore-side  electricity  is  also  encouraged  under  Directive  (EU)  2016/8027  regulating  the 
sulphur  content  in  marine  fuels.  That  would  also  contribute  to  comply  with  nitrogen 
deposition  requirements  pursuant  to  Directive  92/43/EEC  on  the  conservation  of  natural 
habitats  and  of  wild  fauna  and  flora.  In  this  regards,  the  Dutch  authorities  expect  that  local 
emissions  of  air  pollutants  (NOx,  SOx, PM10,  PM2.5)  from  on-board  electricity  generation 
could be reduced at 95% by the use of shore-side electricity. 

The  measure  would  encourage  the  use  of  shore-side  electricity  to  contribute  to  sustainable 
ports and sustainable shipping.  It  is  in  line with  the EU policy ambitions. Deploying shore-
side  electricity  in  European  ports  is  one  of  the  proposed  measures  to  achieve  the  ambitions 
targets set in the European Green Deal. 

The  measure  is  also  likely  to  lead  to  a  reduction  of  CO2  emissions  to  the  extent  that  the 
electricity  mix  from  the onshore  grid,  due  to  higher  system  efficiency  and  the  difference  in 
input  fuels  used,  is  less  carbon  intensive  than  the  electricity  produced  on  board  by  burning 
bunker fuels. In this regard, the Dutch authorities underlined that, while the actual saving of 
CO2 emissions depends on the quality of the electricity used, in the Dutch electricity mix, the 
estimated savings would be of between 28% and 67%, depending on the generator load, with 
this proportion set to rise in future. 

Energy policy 

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7 

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). 
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). 

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The  measure  is  in  line  with  Directive  2014/94/EU  on  the  deployment  of  alternative  fuels 
infrastructure8, 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 TFEU9. 

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  make  such  declarations  for  every  Member  States 
whose territorial  waters  are concerned. Analogous considerations  apply to inland navigation 
and  the  optional  tax  treatment  provided  by  Article  15(1)(f)  of  the  Directive  (actually 
implemented  by  the  Netherlands).  Under  these  circumstances,  it  can  be  justified  not  to 
penalize the less-polluting alternative of shore-side electricity by allowing the Netherlands to 
apply a reduced rate of taxation. 

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  ports10  and  with  the  Commission 
Communication  Strategic  goals  and  recommendations  for  the  EU's  maritime  transport 
policy11. 

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. 

As  regards  competition  between  vessel  operators,  it  first  has  to  be  mentioned  that  there  are 
currently  few  vessels  that  use  shore-side  electricity  on  a  commercial  basis.  Significant 
distortions  in  competition  could  therefore  only  arise  between  vessels  benefitting  from  the 
measure requested by changing to shore-side electricity and others that would continue to use 
on-board generation. Although precise cost projections depend crucially on the development 

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10 

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

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of  the  oil  price  and  are  hence  very  difficult,  the  latest  available  assessments  indicate  that, 
overall, even a full tax exemption would in most cases not reduce operational costs of shore-
side  electricity  below  the  costs  of  on-board  generation12  and  would  therefore  not,  in  any 
event,  represent  a  significant  competitive  benefit  for  vessel  operators  using  shore-side 
electricity  as  opposed  to  those  using  on-board  generation.  In  the  present  case,  a  significant 
distortion of the above mentioned kind can all the less be expected since the Netherlands will 
respect the minimum level of taxation prescribed by Directive 2003/96/EC for electricity for 
business use.  

Moreover, as already mentioned, the ship operators, receiving shore-side electricity taxed at 
the  minimum  level  provided  for  in  Directive  2003/96/EC,  do  not  in  principle  gain  an 
economic  advantage  over  operators  generating  their  own  electricity  on  board  because  this 
electricity is exempted from taxation. A reduced rate for shore-side electricity will reduce the 
difference in the tax treatment of shore-side electricity and the (mineral) energy products used 
to generate electricity on board. 

The  electricity  suppliers  are  liable  for  the  energy  tax  and  the  sustainable  energy  surcharge 
(Opslag  Duurzame  Energie,  ODE).  In  their  energy  tax  declaration  they  directly  apply  the 
reduced  rate.  The  direct  beneficiaries  are  the  operators  of  the  installations  supplying 
electricity to vessels at berth. It is  expected that the operators will pass on all or part of the 
financial advantage to the users of the shore-side electricity, which are the owners of inland 
vessels  and  sea  going  ships.  Existing  users  and  their  representatives  will  insist  that  port 
authorities have an interest in making shore-side electricity financially attractive for the users. 

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 Dutch authorities argue that 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 timeframe for which it is  proposed 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. 

12 

Cf.  European  Commission  Directorate  General  Environment,  Service  Contract  Ship  Emissions: 
Assignment, Abatement and Market-based Instruments, Task 2a – Shore-Side Electricity, August 2005, 
http://ec.europa.eu/environment/air/pdf/task2_shoreside.pdf  .  The  cost  analysis  is  carried  out  for  the 
three ports of Gothenburg (Sweden), Juneau and Long Beach (USA) 

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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. 

• 

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 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  information  provided  by  the  Netherlands  suggests  that  the  measure  will  have  a  limited 
impact  on  tax  revenues  and  the  tax  rate  for  shore-side  electricity  will  still  be  above  the 
minimum level of taxation set in Directive 2003/96/EC. The Netherlands expects the measure 
to have a positive impact on the achievement of its environmental goals and in particular the 
improvement of local air quality and reduction of noise in port cities. 

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In  more  detail,  as  an  estimation  of  the  tax  expenditures  from  the  measure,  according  to  the 
Dutch authorities, a loss of EUR 1 million per year is expected for the coming years.  

At  the  same  time,  the  environmental  benefits  can  be  significant.  The  Dutch  authorities 
underlined  that,  while  the  actual  saving  of  CO2  emissions  depends  on  the  quality  of  the 
electricity used, the estimated savings would be of between 28% and 67%, depending on the 
generator load, with this proportion set to rise in future. Moreover, Dutch authorities expect 
that local emissions of air pollutants from on-board electricity generation could be reduced by 
95%; noise, vibration levels and nitrogen deposition could also be significantly reduced. 

• 

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  or  administrative  burden  on  the  Union.  The 
proposal therefore has no impact on the budget of the Union. 

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  30  June  2027.  The  applicable  tax  rate  will  be  equal  to  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  the  Netherlands  will  be  allowed  to  apply  a  reduced  taxation  rate  to 
electricity  directly  supplied  to  vessels  other  than  private  pleasure  craft  berthed  in  ports 
(‘shore-side  electricity’).  The  tax  rate  must  not  be  less  than  EUR  0.50  per  MWh,  i.e.  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  1  July  2021 
until 30 June 2027, as requested by the Netherlands, within the maximum period of 6 years 
allowed by the Directive. 

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2021/0108 (NLE) 

Proposal for a 

COUNCIL IMPLEMENTING DECISION 

authorising the Netherlands 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) 

By letter of 10 August 2020, the Netherlands sought authorisation to apply a reduced 
rate  of  taxation  to  electricity  directly  provided  to  maritime  and  inland  waterway 
vessels,  berthed  in  ports  (‘shore-side  electricity’)  pursuant  to  Article  19  of  Directive 
2003/96/EC.  

(2)  With  the  reduced  tax  rate  that  it  intends  to  apply,  the  Netherlands  aims  at  further 
promoting  the  deployment  and  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 the burning of bunker fuels by 
those vessels. 

(3) 

(4) 

Insofar  as  the  use  of  shore-side  electricity  avoids  emissions  of  air  pollutants 
originating  from  the  burning  of  bunker  fuels  by  vessels  at  berth,  it  contributes  to  an 
improvement  to  the  local  air  quality  in  port  cities  and  to  noise  reduction.  Under  the 
specific conditions of the electricity generation structure in the Netherlands, the use of 
shore-side  electricity  instead  of  electricity  generated  by  burning  bunker  fuels  is,  in 
particular,  expected  to  reduce  CO2  emissions,  other  air  pollutants  and  noise.  The 
measure  is  therefore  expected  to  contribute  to  the  environmental,  health  and  climate 
policy objectives of the Union. 

Allowing the Netherlands 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. 

(5) 

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 

OJ L 283, 31.10.2003, p. 51. 

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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 from 1 July 2021 until 30 June 2027.  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 30 June 2027. 

(6) 

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

HAS ADOPTED THIS DECISION:  

Article 1 

The Netherlands is authorised to apply a reduced taxation rate to electricity directly supplied 
to shore-side electricity installations for vessels, other than private pleasure craft, berthed in 
ports,  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 1 July 2021 until 30 June 2027. 

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 the Netherlands. 

Done at Brussels, 

Article 3 

For the Council 
The President 

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