Proposal for a COUNCIL IMPLEMENTING DECISION authorising France to apply a reduced rate of taxation to unleaded petrol used as motor fuel and consumed in Corsican departments in accordance with Article 19 of Directive 2003/96/EC
Date: 2025-02-21
Institutions: Directorate-General for Taxation and Customs Union, European Commission
Subjects: Corsica, France, derogation from EU law, fuel tax, lead-free petrol, tax relief

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   EUROPEAN COMMISSION  Brussels, 21.2.2025  COM(2025) 55 final 2025/0029 (NLE)  Proposal for a COUNCIL IMPLEMENTING DECISION authorising France to apply a reduced rate of taxation to unleaded petrol used as motor fuel and consumed in Corsican departments in accordance with Article 19 of Directive 2003/96/EC  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

The  taxation  of  energy  products  and  electricity  in  the  EU  is  governed  by  Council  Directive 
2003/96/EC (hereafter 'the Directive'). The Directive specifies which products are taxable, the 
uses that make them taxable and the minimum rates at which they must  be taxed depending 
on whether they are used as motor fuel, for certain industrial or commercial purposes or for 
heating. 

Pursuant  to  Article  19(1)  of  the  Directive,  the  Council,  acting  unanimously  on  a  proposal 
from the Commission, may authorise any Member State to introduce further exemptions from 
or reductions in the rate of excise duties for specific policy considerations. 

The objective of this proposal is to permit France to continue to apply a reduction in the rate 
of taxation on unleaded petrol used as motor fuel and consumed in the Corsican departments 
with  a  view  to  partially  offsetting  the  additional  costs  induced  by  geographical  remoteness 
and difficulties of supply. 

The request and its general context 

Council  Decision  2007/880/EC  of  20  December  2007  authorised  France  to  apply  a  reduced 
rate  of  excise  duty  to  unleaded  petrol  used  as  motor  fuel  and  consumed  in  the  Corsican 
departments  on  the  condition  that  the  reduction  does  not  go  beyond  the  additional  cost  of 
transport,  storage  and  distribution  compared  with  mainland  France.  Council  Implementing 
Decision 2013/192/EU of 22 April 2013 and Council Implementing Decision 2019/372/EU of 
5 March 2019 authorised France to continue to apply a reduced rate of taxation to unleaded 
petrol  used  as  motor  fuel  and  consumed  in  the  Corsican  departments  in  accordance  with 
Article 19 of Directive 2003/96/EC.  

The  objective  of  these  Decisions  is  to  permit  France  to  partially  offset  the  additional  costs 
induced  by  geographical  remoteness  and  difficulties  of  supply.  In  application  of  those 
Decisions, France applies a reduction of EUR 1 per hectolitre of unleaded petrol. 

By letter dated 31 October 2024, the French authorities requested an authorisation to continue 
to apply a reduction of EUR 1 per hectolitre for a period of six years, from 1 January 2025 to 
31 December 2030. The French authorities provided additional information by letter dated 27 
November 2024. 

As  in  the  previous  requests,  the  French  authorities  argue  that  the  reduction  in  the  rate  of 
excise duty is required to offset part of the higher price of unleaded petrol. The pump price of 
unleaded petrol in Corsica stays more than 10% higher than the average price in the mainland 
France.  According  to  the  French  authorities,  several  reasons  explain  this  additional  cost. 
Corsica is supplied with fuel by sea only, which increases the final fuel price. Road transport 
of fuels  to  service stations is  also  more expensive, as mountainous terrain extends transport 
times.  The  seasonality  of  demand,  linked  to  the  summer  tourist  season,  finally  leads  to  the 
management of just-in-time stocks and entails the risk of quotas causing significant additional 
costs, as Corsica’s oil depots have a low storage capacity. 

France  also  pointed  out  that  the  measure  comes  under  the  specific  government  policy  in 
favour  of  development  in  Corsica,  justified  by  the  handicap  of  insularity.  According  to  the 
French  authorities,  this  derogation  also  aims  to  correct  the  structural  shortcomings  in  the 

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provision  of public transport in  Corsica linked to  a very limited rail network and a difficult 
road network due to the mountainous terrain of the island. 

Provisions in the field covered by the proposal 

Council Directive 2003/96/EC of 27 October 2003 restructuring the Community framework 
for the taxation of energy products and electricity.  

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

Specific policy considerations 

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

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

to 

The tax differentiation places unleaded petrol consumers in Corsica on a more equal footing 
with  similar  consumers  on  the  mainland  by  partially  offsetting  the  additional  cost  borne  by 
consumers  in  Corsica.  The  proposed  measure  therefore  meets  certain  regional  and  cohesion 
policy objectives.  

The tax reduction does not go beyond the additional costs of transport and distribution borne 
by consumers in Corsica. The EUR 1 per hectolitre reduction in the cost of unleaded petrol is 
much smaller than the difference between the respective final prices.  

The  reduced  rate  of  taxation  on  the  consumption  of  unleaded  petrol  currently  applied  in 
Corsica  (EUR  67.29/hl) is  still  appreciably  higher  than  the  minimum  EU  level  set  by 
Directive 2003/96/EC (EUR 35.90/hl).  

Consistency with the other policies and objectives of the Union 

When the Commission examines a request, it takes into account the proper functioning of the 
internal  market,  the  need  to  ensure  fair  competition  and  the  implementation  of  the  EU’s 
health, environment, energy and transport policies.  

The  measure  is  acceptable  from  the  point  of  view  of  the  proper  functioning  of  the  internal 
market  and  of  the  need  to  ensure  fair  competition.  It  merely  seeks  to  partially  offset  the 
additional  costs  associated  with  Corsica’s  island  status.  In  view  of  the  remote  and  insular 
nature of the departments to which it applies and the moderateness of the reduction in the rate 
-  which  is,  moreover,  very  high  compared  with  the  EU  minimum  -  the  measure  is  not 
expected  to  lead  to  changes  in  fuel  consumption,  through  the  attraction  of  consumers  from 
outside these areas. 

As the effect of the tax relief on transport is expected to be insignificant, and compensatory 
policies  could  be  found  for  any  marginal  effects  which  might  occur,  the  measure  is  not 
incompatible with the health, environment, energy and transport policies of the union. 

Period  of  application  of  the  measure  and  development  of  the  EU  framework  on  Energy 
Taxation 

Article 19(2) of Directive 2003/96/EC lays down, for this type of measure, a maximum period 
of  six  years,  with  the  possibility  of  renewal.  The  period  of  validity  initially  requested  was 
from 1 January 2025 until 31 December 2030, which is within the maximum period allowed 
by  Article  19  of  the  Energy  Taxation  Directive. Following  discussions  between  the  French 

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authorities  and  the  Commission,  in  particular  in  view  of  the  proposed  revision  of  Directive 
2003/96/EC1,  an  earlier  termination  date  of  31 December  2028  was  agreed.  Taking  into 
account the absence of any negative impact of the current arrangement on intra-EU trade and 
on the general level  of taxation of  fuels  in  France, in  order to  ensure legal  certainty for the 
region, the Commission suggests to grant the requested authorisation for four years, i.e. from 
1 January 2025 until 31 December 2028. Moreover, in order not to undermine future general 
developments  of  the  existing  legal  framework,  it  is  appropriate  to  provide  that,  should  the 
Council, acting on the basis of Article 113 of the Treaty, introduce a modified general system 
for the taxation of energy products to which the present authorisation would not be adapted, 
this Decision shall expire on the day on which those modified rules become applicable. 

Should  the  Council  adopt  such  a  new  system  and  should  the  Commission  consider  that  the 
authorisation  proposed  herewith  is  still  warranted,  it  would  examine,  positively  and  in  a 
timely  manner,  any  request  from  France  for  a  similar  authorisation  adapted  to  that  new 
system, so as to provide for the continuity of the present proposal. 

State aid rules 

The  French  authorities  argue  that  the  measure  does  not  constitute  a  State  aid  because  it  is 
addressed to final consumers and applies without discrimination based on their nationality or 
origin  of the products.  However, the measure  may constitute  a  State aid  in  accordance with 
Article 107(1) of the TFEU. Since the reduced rates are above the EU minima, the measure 
seems to fall under Article 44 of Commission Regulation (EU) 651/2014, which stipulates the 
conditions under which aid in the form of reductions in taxes under Directive 2003/96/EC can 
be exempted from the State aid notification requirements. It cannot be established at this stage 
whether  all  the  conditions  set  in  this  Regulation  are  fulfilled.  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, with Commission Regulation (EU) 
651/2014. The proposal for a Council Implementing Decision is also without prejudice to the 
Member State’s obligation to  notify the  aid  to  the Commission  before putting  it into effect, 
pursuant to Article 108(3) of TFEU, should the new aid not be covered by a block exemption. 

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 the TFEU is not in itself within the 
exclusive competence of the EU within the meaning of Article 3 of the Treaty. 

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 this proposal for a Council 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. 

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the taxation of energy products and electricity (recast). 

COM/2021/563  final:  Proposal  for  a  COUNCIL  DIRECTIVE  restructuring  the  Union  framework  for 

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Principle of 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 instruments 

Instrument proposed: Council implementing decision. 

Article 19 of Directive 2003/96 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 

The proposal consists of a tax reduction which concerns only France. 

• 

Collection and use of expertise 

No external expertise has been used. 

• 

Impact assessment 

No impact assessment has been carried out. 

• 

Regulatory fitness and simplification 

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

• 

Fundamental rights 

The measure has no bearing on fundamental rights. 

4. 

BUDGETARY IMPLICATIONS 

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

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  of  four  years.  The  tax  rate  that  will  apply  will  be  higher  than  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 four-year period has expired. 

Summary of the measure proposed 

The  Commission  proposes  to  authorise  the  tax  reduction  of  EUR  10  per  1 000 l  until  31 
December  2028,  thereby  permitting  France  to  apply  a  reduced  rate  of  taxation  to  unleaded 
petrol used as motor fuel and consumed in the Corsican departments. 

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2025/0029 (NLE) 

Proposal for a 

COUNCIL IMPLEMENTING DECISION 

authorising France to apply a reduced rate of taxation to unleaded petrol used as motor 
fuel and consumed in Corsican departments 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(1) thereof, 

Having regard to the proposal from the European Commission, 

Whereas: 

(1) 

(2) 

By  means  of  Council  Decision  2007/880/EC2  and  Implementing  Decisions 
2013/192/EU3  and  2019/372/EU4,  France  was  authorised  to  apply  a  reduced  rate  of 
taxation to unleaded petrol used as motor fuel and consumed in Corsican departments 
in accordance with Article 19 of Directive 2003/96/EC. 

By  letter  dated  31  October  2024,  France  requested  authorisation  to  apply  a  reduced 
rate  of  energy  tax  to  unleaded  petrol  used  as  motor  fuel  by  way  of  extension  of  a 
practice  followed  under  Decision  2007/880/EC  and  Implementing  Decisions 
2013/192/EU and 2019/372/EU. The reduction amounts to EUR 1 per hectolitre. The 
authorisation is requested for the period from 1 January 2025 to 31 December 2028. In 
Corsica,  the  cost  of  supplying  unleaded  petrol  to  the  forecourt  is  appreciably  higher 
than in mainland France, final prices being over EUR 0,10 per litre higher than on the 
mainland. 

(3) 

By reducing the tax on unleaded petrol borne by consumers in Corsica, the consumers 
concerned  will  be  placed  on  a  more  equal  footing  with  those  on  the  mainland.  The 
measure therefore meets regional and cohesion policy objectives. 

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4 

OJ L 283, 31.10.2003, p. 51, ELI: http://data.europa.eu/eli/dir/2003/96/oj.  
Council  Decision  2007/880/EC  of  20  December  2007  authorising  France  to  apply  a  reduced  rate  of 
taxation to unleaded petrol used as motor fuel and consumed in the Corsican departments in accordance 
with  Article  19  of  Directive  2003/96/EC 
(OJ  L  346,  29.12.2007,  p.  15,  ELI: 
http://data.europa.eu/eli/dec/2007/880/oj). 
Council  Implementing  Decision  2013/192/EU  of  22  April  2013  authorising  the  French  Republic  to 
apply  a  reduced  rate  of  taxation  to  unleaded  petrol  used  as  motor  fuel  and  consumed  in  the  Corsican 
departments in accordance with Article 19 of Directive 2003/96/EC (OJ L 113, 25.4.2013, p. 13, ELI: 
http://data.europa.eu/eli/dec/2007/880/oj). 
Council Implementing Decision (EU) 2019/372 of 5 March 2019 authorising France to apply a reduced 
rate  of  taxation  to  unleaded  petrol  used  as  motor  fuel  and  consumed  in  Corsican  departments  in 
(OJ  L  68,  8.3.2019,  p.  5,  ELI: 
accordance  with  Article  19  of  Directive  2003/96/EC 
http://data.europa.eu/eli/dec_impl/2019/372/oj). 

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(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

(10) 

(11) 

The  tax  reduction  is  no  larger  than  what  is  necessary  to  allow  for  the  additional 
transport and distribution costs borne by consumers in Corsica. 

The  final  level  of  taxation  complies  with  the  minimum  rates  laid  down  in  Directive 
2003/96/EC, currently EUR 359 per 1 000 litres (or EUR 35,90 per hectolitre). 

In view of the remote and insular nature of the departments to which it applies and the 
moderate  reduction  in  the  rate  —  which  is,  moreover,  very  high  compared  to  the 
minimum level set out in Directive 2003/96/EC — the measure requested will not give 
rise to any movement specifically linked to the supplying of fuel. 

Consequently,  the  measure  is  acceptable  in  terms  of  the  proper  functioning  of  the 
internal market and of the need to ensure fair competition and is not incompatible with 
the health, environment, energy and transport policies of the Union. 

France  should  therefore  be  authorised,  pursuant  to  Article  19(2)  of  Directive 
2003/96/EC, to apply a reduced rate of taxation to unleaded petrol used as motor fuel 
and consumed in Corsica.  

It  should  be  ensured  that  France  can  apply  the  specific  reduction  to  which  this 
Decision  relates  from  1  January  2025,  following  seamlessly  on  from  the  prior 
arrangements under Implementing Decision 2019/372/EU. The authorisation requested 
should therefore be granted with effect from 1 January 2025. 

It follows from Article 19(2) of Directive 2003/96/EC that each authorisation granted 
under that Article must be strictly limited in time. 

In order to provide the departments concerned with a sufficient degree of certainty, the 
authorisation  should  be  granted  for  a  period  of  four  years.  However,  in  order  not  to 
undermine  future  general  developments  of  the  existing  legal  framework,  it  is 
appropriate to provide that, should the Council, acting on the basis of Article 113 of 
the Treaty on the Functioning of the European Union, introduce a general system for 
the taxation of energy products to which this authorisation would not be adapted, this 
Decision should expire on the day on which that system becomes applicable. 

(12)  This Decision is without prejudice to the application of the Union rules regarding State 

aid, 

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HAS ADOPTED THIS DECISION: 

Article 1 

France is hereby authorised to apply a reduction in the rate of taxation not exceeding EUR 1 
per  hectolitre  to  unleaded  petrol  used  as  motor  fuel  and  consumed  in  the  Corsican 
departments. 

In order to avoid any overcompensation, the reduction shall not go beyond the additional costs 
of transport, storage and distribution borne in the Corsican departments compared to mainland 
France. 

The  reduced  rate  shall  comply  with  the  obligations  set  out  in  Directive  2003/96/EC,  in 
particular the minimum rates referred to in Article 7 thereof. 

This Decision shall take effect on the date of its notification. 

Article 2 

It shall apply from 1 January 2025. 

It shall expire on 31 December 2028. 

However,  should  the  Council,  acting  on  the  basis  of  Article  113  of  the  Treaty  on  the 
Functioning  of  the  European  Union,  introduce  a  general  system  for  the  taxation  of  energy 
products  to  which  the  authorisation  granted  in  Article  1  of  this  Decision  would  not  be 
adapted, this Decision shall expire on the day on which that system becomes applicable. 

This Decision is addressed to the French Republic. 

Done at Brussels, 

Article 3 

For the Council 
The President 

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