Proposal for a COUNCIL IMPLEMENTING DECISION authorising Denmark 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: Denmark, electrical energy, electricity supply, excise duty, harbour installation, tax relief, vessel

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   EUROPEAN COMMISSION  Brussels, 29.4.2021  COM(2021) 211 final 2021/0110 (NLE)  Proposal for a COUNCIL IMPLEMENTING DECISION authorising Denmark 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 2015/993/EU of 19 June 20152, Denmark was 
authorised to apply a reduced rate of taxation to electricity directly supplied to vessels, other 
than private pleasure craft3, berthed in ports (‘shore-side electricity’). 

The objective of this proposal is to extend that authorisation as requested by Denmark, given 
that the current derogation expires on 18 June 2021.  

By  letter  dated  5  May  2020,  the  Danish  authorities  informed  the  Commission  of  their 
intention  to  prolong  the  current  measure  until  17  June  2027.  Additional  information  was 
provided by letter dated 16 February 2021. 

The intention of the Danish  authorities is  to  continue to  apply  a reduced  rate of 0.4  øre per 
KWh (app. EUR 0.535 per MWh 4) of excise duty to shore-side electricity. At the time of the 
submission  of  the  request  proposed  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 18 June 2021 until 17 June 2027, 
which is in continuity with the current derogation and within the maximum period allowed by 
Article 19 of the Energy Taxation Directive. 

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2 
3 

4 

OJ L 283, 31.10.2003, p. 51–70. 
OJ L 159, 25.06.2015, p. 68–69. 
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 2019, i.e. DKK 7,4662 for EUR 1. Cf. OJ 
C 329/03 of 1.11.2019 

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The aim of reducing the tax is  to promote 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, compared with the burning of bunker fuels by those 
vessels. The measure will reduce emissions of air pollutants from vessels lying at berth.  

The reduction involves lowering the energy tax applicable to  shore-side  electricity from  the 
otherwise applicable level of ore 89.2 øre per KWh (rate 2020) to 0.4 øre per KWh. 

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. They may also exempt electricity produced on board ships for 
navigation  on  inland  waterways  according  to  Article  15(1)(f)  of  the  Directive.  Denmark 
confirmed the transposition of that latter optional exemption. 

Denmark intends to apply the reduced rate of taxation to all supplies of shore-side electricity 
of at least 380 V to vessels used for commercial shipping. The limit is considered appropriate 
by  the  Danish  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. Those 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. 

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

The Danish authorities consider that the measure is neutral with respect to competition, since 
it is available to all ships (except ships for private use) at berth in Danish ports.  

The  Danish  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. Even a full exemption would in most cases not 
reduce the operational costs of shore-side electricity below the operational costs of on board 
generation.  

The Danish authorities have informed the Commission that they expect that the tax reduction 
will result in annual tax expenditures of approximately DKK 15 million (EUR 2 million). The 
assumption is based on the estimated electricity consumption by cruise ships in Danish ports 
in  2008  of  approximately  16.9  million  KWh,  which  corresponds  to  an  annual  budgetary 
expenditure of DKK 15 million. The Danish authorities indicate that the statements for use of 
shore side electricity are subject to a great deal of uncertainty. 

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

• 

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. 

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The  measure  constitutes  State  aid  and  falls  within  the  ambit  of  the  EU  legislation  on  this 
subject matter, in particular Commission Regulation 651/2014/EU5. 

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 
Member  State 
for  specific  policy 
considerations. 

further  exemptions  or  reductions 

introduce 

to 

By  means  of  the  tax  reduction  in  question,  the  Danish  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 thereby to improve local air quality. 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 advantages6. 

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.  

Denmark has requested that the measure applies for 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-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.  Such  review  follows  the 
evaluation of the Energy Taxation Directive7 and the Council Conclusions on the EU energy 
taxation  framework  from  28  November  20198.  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 June 2027. 

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8 

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

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State aid rules 

The  reduced  tax  rate  of  0.4  øre  per  KWh  (app.  EUR  0.535  per  MWh9)  envisaged  by  the 
Danish  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 and climate change policy. To 
the extent that it will help to 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 Quality10 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 these 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)  2016/80211  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 Danish authorities expect that local 
emissions  of  air  pollutants  (NOx,  SOx, PM10,  PM2.5)  from  on-board  electricity  generation 
on  cruise  ships  could  be  reduced  significantly,  and  up  to  90  %,  given  that  some  auxiliary 
power and back-up power systems cannot be turned off. 

Energy policy 

The  measure  is  in  line  with  Directive  2014/94/EU  on  the  deployment  of  alternative  fuels 
infrastructure12, 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 

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12 

All calculations are based on the exchange rate on 1 October 2019, i.e. DKK 7.4662 for EUR 1. Cf. OJ 
C 329/03 of 1.11.2019 
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). 
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) 

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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 TFEU13. 

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. Under these circumstances, it can be justified not  to 
penalize the less-polluting alternative of shore-side electricity by allowing Denmark 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  ports14  and  with  the  Commission 
Communication  Strategic  goals  and  recommendations  for  the  EU's  maritime  transport 
policy15. 

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 Danish 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 
fishing  vessels  make  use  of  the  shore-side  electricity.  In  addition,  the  Danish  authorities 
mention,  that  cargo  ships  use  shore-side  electricity  to  a  certain  extent,  but  especially  when 
they are in port for a longer period of time. The Danish authorities mention, that there are not 
yet  facilities  in  the  Danish  ports  for  large  ships,  such  as  cruises  or  container  ship,  that  use 
shoreside electricity. 

As  the  scheme  will  reduce  ships'  costs,  it  will  affect  trade  between  Member  States.  The 
impact is estimated as minimal, however, as passengers' wishes and the destination of cargoes 
will determine whether ships call in Danish ports.  

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15 

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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Furthermore,  the  Danish  authorities  consider  the  scheme  as  competition-neutral,  because 
access to shore-side electricity will be open to all vessels that meet the above conditions and 
call  in  Danish  ports  regardless  of  their  flag  without  leading  to  a  more  advantageous  tax 
treatment  of  national  economic  operators  over  their  competitors  from  other  EU  Member 
States. 

The restriction to apply the reduced rate of taxation to supplies of shore-side electricity of at 
least 380 V to vessels could be regarded as a distortion of the market. However, in practice 
there  is  no  supply  of  shore-side  electricity  of  less  than  380  Volt  to  commercial  vessels, 
electricity of this voltage is only supplied to small pleasure crafts. 

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. 

• 

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. 

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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 Denmark 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 Denmark 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  Danish  authorities,  a  loss  of  DKK  15  million  per  year  is  expected  for  the 
coming years. 

For historic reasons a great number of the commercial ports in Denmark have provided shore-
side  electricity  for  vessels.  The  Danish  authorities  have  observed  that  in  the  last  few  years, 
several  ports  have  installed  and  are  planning  to  install  facilities  for  bigger  vessels,  such  as 
ferries sailing in regular international and national routes. It is also the case for cruise ships in 
international traffic. Also, some Danish ports have established mobile shore power plants for 
cargo ships. Ferries and cruise ships require new infrastructure installations to provide enough 
power. 

Denmark  authorities  estimate  the  measure  to  have  a  significant  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 
Denmark 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. 

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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  17  June  2027.  The  applicable  tax  rate  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  Denmark  will  be  allowed  to  apply  a  reduced  rate  of  electricity 
taxation to electricity directly supplied to vessels, other than private pleasure craft, berthed in 
Danish 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 18 June 2021, 
in  continuity  with  the  current  Council  Implementing  Decision  2015/993/EU,  until  17  June 
2027,  within  the  maximum  period  of  6  years  allowed  by  the  Directive,  as  requested  by 
Denmark. 

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2021/0110 (NLE) 

Proposal for a 

COUNCIL IMPLEMENTING DECISION 

authorising Denmark 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 2015/993/EU2, Denmark was authorised to apply 
a reduced rate of taxation to electricity directly provided to vessels, other than private 
pleasure craft, at berth in a port (‘shore-side electricity’) in accordance with Article 19 
of Directive 2003/96/EC until 18 June 2021. 

By letter of 5 May 2020, Denmark 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 Danish authorities provided additional information by letter dated 16 
February 2020. 

(3)  With the reduced tax rate that it intends to apply, Denmark aims at further promoting 
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. 

(4) 

(5) 

1 
2 

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.  A  continued  reduced  rate  of 
taxation 
the 
environmental, health and climate policy objectives of the Union. 

to  shore-side  electricity 

therefore  expected 

to  contribute 

to 

is 

Allowing  Denmark  to  apply  a  continued  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 reduced rate of taxation is unlikely to lead to 
significant  distortions  in  competition  during  its  period  of  validity  and  will  thus  not 
negatively affect the proper functioning of the internal market. 

OJ L 283, 31.10.2003, p. 51. 
Council  Implementing  Decision  (EU)  2015/993  of  19  June  2015  authorising  Denmark  to  apply  a 
reduced rate of taxation on electricity directly provided to vessels at berth in a port, in accordance with 
Article 19 of Directive 2003/96/EC (OJ L 159, 25.06.2015, p. 68). 

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(6) 

Each  authorisation  granted  under  Article  19(2)  of  Directive  2003/96/EC  is  to  be 
strictly limited in time. In order to ensure that the 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 17 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 17 June 2027.  

(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,  the  authorisation  requested  should  follow  seamlessly  on  from  the  prior 
arrangements under Implementing Decision 2015/993/EU. 

(8) 

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

HAS ADOPTED THIS DECISION:  

Article 1 

Denmark  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 18 June 2021 until 17 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 Denmark. 

Done at Brussels, 

Article 3 

For the Council 
The President 

EN 

10 

  EN