CELEX: 51995PC0172
Language: en
Date: 1995-05-10
Title: Amended proposal for a COUNCIL DIRECTIVE introducing a tax on carbon dioxide emissions and energy

COMMISSION OF THE EUROPEAN COMMUNITIES
                                      Brussels, 10.05.1995
                                      COM(95) 172 final
                  Amended proposal for a
                 COUNCIL DIRECTIVE
                    introducing a tax on
            carbon dioxide emissions and energy
(presented by the Commission pursuant to Article 189 a (2)
                     of the EC Treaty)
 ---pagebreak---                             EXPLANATORY MEflTORANDPM
The proposal for a Council Directive
                                              Since the framework adopted for the tax
COM(92) 226 introducing a tax on
                                              draws directly on the existing provisions
carbon dioxide emissions and energy,1
                                              on the general arrangements for products
which forms part of the overall strategy
                                              subject to excise duty and on the holding,
for stabilizing carbon dioxide emissions
in the Community at 1990 levels by the        movement and monitoring of such
year 2000, has not yet been adopted.          products, and on the harmonization of
                                              the structures of excise duties on mineral
                                              oils, the Commission also considered it
The Economic and Social Committee
                                              preferable to delete the original specific
gave its opinion on 24 February 1993.2
                                              provisions and to refer as much as
                                              possible to the relevant provisions of the
Nevertheless, the discussions within the
                                              excise duty Directives.
Council indicate that it is unlikely to be
 adopted in the short term.
                                               This approach does away with the need
                                               for certain safeguard clauses such as the
 At its meeting in Essen on 9 and
                                               conditionality    and    the    temporary
  10 December the European Council
                                               suspension of the tax originally
 took note "of the Commission's intention
                                               proposed, in so far as the choice of the
 of submitting guidelines to enable every
                                               rate of taxation is left to the Member
 Member State to apply a COj/energy tax
                                               States, according to their needs and
 on the basis of common parameters".
                                               possibilities.
 In order to comply with this
 commitment,        the    Commission      is  In addition, the wish to safeguard the
 proposing to amend its existing proposal      competitiveness of Community firms
 in order to incorporate elements of           should encourage Member States who
 flexibility which will overcome the           wish to apply a tax to use the revenue it
 obstacles which have emerged during the       generates to reduce other charges,
 Council discussions.                          particularly those on labour, in
                                               accordance with the guidelines of the
To this end, the Commission is                 White Paper on growth, competitiveness
 proposing that the implementation of a        and employment.
 harmonized tax be preceded by a
transitional period during which the
Member States, while respecting a
harmonized tax structure, are free to set
the tax rates product by product. In
addition, in order to help the Member
 States to take the measures necessary to
attain the objectives of reducing carbon
dioxide emissions, the Commission
considered it appropriate to provide that
the rates set in its original proposal, and
revised, should be target rates towards
which the Member States endeavour to
maice uieir uomestic rates converge in
the medium term.
          O J N o C 196, 3.8J992, p. 1.
          O J N o C 108, 19.4.1993, p. 20.
 ---pagebreak---                                                                                  A <^U
                                  Amended proposal for a
                                 COUNCIL DIRECTIVE
                               INTRODUCING A TAX ON
                   CARBON DIOXIDE EMISSIONS AND ENERGY
Original proposal                           Amended proposal
THE COUNCIL OF THE EUROPEAN THE COUNCIL OF THE EUROPEAN
COMMUNITIES,                                UNION,
Having regard to the Treaty establishing Having regard to the Treaty establishing
the European Economic Community, and the European Community, and in
in particular Articles 99 and 130s thereof, particular Articles 99 and 130s thereof,
Having regard to the proposal from the unchanged
Commission,
Having regard to the opinion of the unchanged
European Parliament,
Having regard to the opinion of the unchanged
Economic and Social Committee,
Whereas the greenhouse effect is a unchanged
problem that should be resolved in an
efficient and coherent manner;
Whereas the establishment and functioning unchanged
of the internal market necessitates free
movement of goods, including those
subject to specific duties;
Whereas a number of Member States have unchanged
already introduced, or are planning to
introduce, taxes on carbon dioxide
emissions and the use of energy; whereas a
harmonized approach is needed to ensure
the functioning of the internal market;
 ---pagebreak---   Whereas Article 1 (1) in fine of Directive unchanged
  92/12/EEC of 25 February 1992* excludes
  from the arrangements laid down by that
  Directive taxes established by the
  Commumty;
  Whereas the          Community's action unchanged
  programmes for the environment adopted
  in 19732 9 19773 19 g 3 4 i 98 75 m^ i 9 9 2 6
  stress the importance of reducing and
  preventing air pollution; whereas the
  1987-92 environmental action programme
  stresses the importance of concentrating
  Community action on the priority area of
  reducing air pollution at source;
 Whereas, at its meeting in Dublin in June unchanged
  1990, the European Council pressed for
 the adoption, at the earliest possible
 opportunity, of targets and strategies for
 limiting emissions of greenhouse gases;
 whereas carbon dioxide emissions are the
 major component of such gases;
 Whereas, at its meeting on 29 October unchanged
 1990, the Council concluded that
 aggregate carbon dioxide emissions should
be stabilised at 1990 levels by the year
 2000;
 Whereas the global dimension of the unchanged
 greenhouse effect has been recognised;
whereas this phenomenon should be
tackled at that level;
1
   OJ No. L 76, 23.3.1992, p. 1
2
   OJ No. C 112, 20.12.1973, p. 1
3
   OJNo. C 139, 13.6.1977, p.l
4
   OJ No. C 46, 17.2.1983, p.l
5
   OJ No. C 328, 7.12.1987, p.l
6
   C O M (92) 23final,30.3.1992
 ---pagebreak---  Whereas the introduction of a carbon unchanged
 dioxide/energy tax is an essential element
 of an overall strategy for improving the
 efficient use of energy and bringing about
 changes in the use of forms of energy in
 favour of less-polluting sources;
 Whereas, in order to safeguard this deleted
 competitiveness of Community industry,
 the tax arrangements cannot be applied in
 the Member States until such time as other
 member countries of the OECD have
 brought in a similar tax or measures
 having an equivalentfinancialimpact;
 Whereas, since the tax is to be established Whereas, since the system of tax is to be
 at Community level, it is necessary to      established at Community level,' it is
determine the territory to which it will     necessary to determine the territory to
 apply as well as the system of taxation for which it will apply as well as the rules
the products covered, the rules relating to  relating to the holding and movement of
the holding and movement of such             taxable products, and the methods of
products, and the tax rates and exemptions   calculating the rates and the framework
or reduced rates at Community level;         for exemptions or reduced rates at
                                             Community level;
Whereas use of the existing administrative unchanged
structures and application of the definition
of territory applicable in the case of
harmonised excise duties will ease the
burden on the administrations and firms
without giving rise to any distortions of
competition;
Whereas the tax must be levied on fossil unchanged
energy sources as regards its objective of
limiting carbon dioxide emissions and on
all forms of energy as regards its objective
of promoting efficient use of energy;
 ---pagebreak---  whereas use of energy sources as feed
 stocks should be excluded; whereas,
 however, as regards the taxation of energy
 as such, steps should be taken to avoid
 distortions between various energy
 sources arising in connection with the
 extraction     process;    whereas      the
 arrangements      should    provide     for
 appropriate treatment of electricity;
 Whereas, in order to promote the use of unchanged
 alternative sources of energy, renewable
 should be excluded from the scope of the
 tax;
 Whereas, in order to achieve these two unchanged
 objectives, the tax should be based on the
 energy content and on the level of carbon
 dioxide emissions from the products used;
 Whereas, in order to ensure that the tax unchanged
yield accrues to the Member States
without impending the free movement of
the products subject to the tax and
without giving rise to any distortions of
competition,      harmonised     monitoring
arrangements must be introduced; whereas
such arrangements exist for products
already subject to excise duty; whereas the
Commission should adopt the appropriate
measures for monitoring the other
products while ensuring, however, that
such monitoring does not impede their
free movement;
Whereas, in order to allow economic deleted
operators to adapt in a flexible manner to
the new conditions created by the tax, the
rates must be fixed at a tolerable level at
the outset and raised gradually to the
desired level;
 ---pagebreak--- Whereas, subject to certain limits and     geje&i
conditions, the Mendier Stales should, in
temporary derogations;
                                           Whereas harmonisation of the rates of tax
                                           remains a key objective:
                                           Whereas the attainment of this objective in
                                           the short term nevertheless creates
                                           implementation problems for some
                                          Member States;
                                          Whereas, in order to encourage the
                                          introduction of a harmonised tax in the
                                           Community, it is necessary to set common
                                           parameters which are flexible enough to
                                          enable each Member State that so wishes
                                          to apply the tax, in accordance with the
                                          conclusions of the European Council
                                          meeting in Essen on 9 and 10 December
                                           1994:
                                          Whereas, therefore, on 1 January 1996. a
                                          clearly defined transitional period must be
                                          introduced during which transitional
                                          provisions designed to make it easier to
                                          move to a system of harmonised rates of
                                          tax will be implemented:
                                          Whereas, during this transitional period
                                          the Member States must be left a degree
                                          of flexibility in derteirnining the rates of
                                          tax:
                                          Whereas, however, the rates applied per
                                          product should be coherent with the
                                          different content of carbon and energy for
                                          the whole of the products to be taxed, in
                                          accordance       with     the Community
                                          objectives for the improvements of energy
                                          efficiency and the reduction of carbon
                                          dioxide emissions:
                                          Whereas, with a view to making it easier
                                          to move to a system of harmonised rates.
                                          it is necessary to set target rates to be used
                                          as reference values for the Member States
                                          during the transitional period and towards
                                          which thev endeavour to make their
                                          domestic rates converge:
 ---pagebreak--- Whereas the transitional arrangements
must be replaced, on 1 January 2000 by a
harmonised system of taxation, which is
the objective to be attained in the medium
term:
Whereas to this end, the Commission will,
by 1 January 1999. present to the Council
and to Parliament a report on the
operation of the transitional arrangements
accompanied bv proposals on moving to a
harmonised system of taxation.
and whereas the Council will act
unanimously before 1 January 2000. after
consulting the European Parliament, on
the practical details of the harmonised
system of taxation and on its entry into
force:
 ---pagebreak---  Whereas, in order to safeguard the            Whereas, in order to safeguard the
 competitiveness of Commun"'/, : k             competitiveness of the industry of the
appropriate     to     grant     COL v Jonal   Member States, it is appropriate to grant
exemptions from, or reductions in, the tax     conditional      exemptions     from,     or
of energy-intensive firms in so fer as their   reductions in, the tax to energy-intensive
competitors in third countries are not         firms in so far as their competitors in other
encumbered with a similar tax or financial     Member States or third countries are not
burden; whereas such exemptions and            encumbered with a similar tax or financial
reductions must be authorised subject to       burden; whereas such exemptions and
the conditions laid down by Community          reductions must be authorised subject to
law and in compliance with the                 the conditions laid down by Community
Community's international commitments;         law and in compliance with the
                                               Community's international commitments;
Whereas provision should be made in this unchanged
connection for a system of tax incentives
for investment in energy saving or carbon
dioxide abatement; whereas the conditions
for such incentives must be fixed uniformly
in order to ensure that they do not display
the characteristics of aid likely to distort
the conditions of competition;
Whereas a committee needs to be set up in     Whereas assistance is needed from the
order to ensure that the provisions of this   Committee on Excise Duties established
Directive are applied in a coordinated        by.          Directive 92/12/EEC           of
manner;                                       25 February 1992 7 in order to ensure that
                                              the provisions of this Directive are applied
                                              in a coordinated manner;
                                             ?> OJ no L 76,23.3.1992. Directive last amended
                                                by Directive 94A74/EC(OJ No L 365,
                                                31.12.1994)
 ---pagebreak--- Whereas it is essential that introduction of Whereas it is essential that the
the new tax should not result in an          introduction of the new harmonised tax
increase in the overall tax burden; whereas  complies with the guidelines laid down in
compliance with the principle of tax         the Commission White Paper on growth,
neutrality will help to modernise tax        competitiveness and employment: whereas
systems by encouraging behaviour             for this purpose the application of the tax
conducive to greater protection of the       must not be reflected in an increase in the
environment; whereas tax neutrality will     overall tax burden:
cushion the effects on inflation and growth
of introducing the tax; whereas              Whereas compliance with the principle of
compliance with the principle of tax         tax neutrality will help to modernise tax
neutrality will help to modernise tax        systems by encouraging behaviour
systems by encouraging behaviour             conducive to greater protection of the
conducive to greater protection of the       environment;
environment;
Whereas, however, determination of the unchanged
arrangements for ensuring tax neutrality is
a matter for each Member State,
HAS ADOPTED TEDS DIRECTIVE                   unchanged
 ---pagebreak---   TITLE I - GENERAL PROVISIONS                unchanged
 Article 1                                    Article 1
  1. The purpose of this Directive is to       IThe Member States shall apply a
     provide       for      the  harmonised   harmonised tax on the products specified
     introduction in the Member States of a   in Article3 and to be levied on carbon
     specific tax on the products specified   dioxide emissions and energy content, in
     in Article 3 and to be levied on carbon  accordance with the provisions of this
     dioxide emissions and energy content     Directive.
     The rate of the tax shall be in addition
     to the rates applied by the Member
     States to the products concerned by
     the Council Directives on the
     harmonisation of the structures of
     excise duties on mineral oils8 and on
     the approximation of the rates of
     excise duties on mineral oils9.
 2. Member States shall take the measures unchanged
     necessary to collect for themselves the
     tax referred to in paragraph 1 and to
     monitor its application.
     Application of the tax arrangements deleted
     provided for in paragraph 1 shall be
     conditional on the introduction by
     other member countries of the OECD
     of a similar tax or of measures having a
     financial impact equivalent to those
     provided for m this Directive. The
     Council, acting by qualified majority
     on a proposal form the Commission,
     shall fix the date on which the tax
     arrangements ate to take effect.
«QJNo.L.               ,1992
9
  OJNo.L.          ..,.,1992
 ---pagebreak---                                                                                          10
 Article 2                                    Article 2
 1. This Directive shall apply in the         This Directive shall apply in the territory
     territory of the Community as defined,   of the Community within the limits laid
     for each Member State, by the Treaty     down bv Article 2 of Directive 92/12/EEC
     establishing the European Economic       on the general arrangements for products
     Community, and in particular Article     subject to excise duty and on the holding,
     227 thereof except for the following     movement and monitoring of such
     national territories :                   products(7)
-    in the case of the Federal Republic of deleted
     Germany; the Island of Heligoland and
    the territory of Busingen;
-    in the case of the Italian Republic : deleted
    Livigno, Campione d'ltalia and the
    Italian waters of Lake Lugano;
-   in the case of the Kingdom of Spain: deleted
    Cueta and Melilla.
2. By way of derogation from paragraph deleted
     1, this Directive shall not apply to the
    Canary Islands, Madeira or the Azores.
    However, the Kingdom of Spain and
    the Portuguese Republic may give
    notice, by means of a declaration, that
    this Directive applies to those
    territories in respect of all or some of
    the products specified in Article 3 as
    from the first day of the second month
    following deposit of that declaration.
3. By way of derogation from paragraph deleted
    1, this Directive shall not apply to the
    overseas departments of the French
    Republic. However, the French
    Republic may give notice, by means of
    a declaration, that this Directive
    applies to those territories, subject to
    measures to adapt their extreme
    remoteness, from the first day of the
    second month following deposit of the
    declaration.
 ---pagebreak---                                                                                               11
 4. The provisions of this Directive shall deleted
      not prevent Greece from maintaining
     the specific, status granted to Mount
     Athos and guaranteed by Article 105
     of the Greek Constitution.
 5. If the Commission considers that the deleted
     exclusions provided for in paragraph 1
     to 3 are no longer justified, particularly
     in terms of fair competition, it shall
     present appropriate proposals to the
     Council.
Article 3                                        Article 3
1. The tax referred to in Article 1 (1) unchanged
    shall be levied on the products
    specified below and intended for use as
    heating fuels or as motor fuels:
a. coal, lignite, peat and their derivatives     a)coal, lignite, peat and their derivatives
    (coke, gas, tar, etc.), with the             (coke, gas, etc) with the exception of blast
    exception of blast-furnace gas, falling      furnace gas, falling within CN codes 2701
    within CN codes 2701 to 2706;                to 2705.
b. natural gas falling within CN codes unchanged
    271121 00 to 2711 29 00;
c. mineral oils; the following shall be (c) mineral oils as defined in Article 2(1)
    considered as such for the purposes of of           Directive 92/81/EEC       on     the
    this Article :                               harmonisation of the structures of excise
                                                 duties on mineral oilsCIO)
                                                 (d) ethyl and methyl alcohol falling within
                                                 CN codes 2207 and 2905 where obtained
                                                 by distillation from products specified at
                                                 (a)to(c).
                                                tO) 0J No. I. 316, 3T.tO.t992, Directive Last
                                                    amended by Directive 94/74/EC (0J No. L 365,
                                                    31.12.1994)
 ---pagebreak---                                                  12
products falling within CN codes 2707    deleted
 10, 2707 20, 2707 30, 2707 50, 2707
91 00 and 2707 99 (with the exclusion
of CN codes 2707 99 30, 2707 99 50
and 2707 99 70);
products falling within CN code 2709;    deleted
products falling within CN code 2710;    deleted
liquefied petroleum gasesrailingwithin   delete
CN codes 2711 12 11 to 2711 19 00;
productsrailingwithin CN codes 2712      deleted
20 00, 2712 90 31, 2712 90 33, 2712
90 39 and 2712 90 90;
products falling within CN codes 2712    deleted
10 and 2713, with the exception of
resinous products, sued bleaching
earth, acid residues and basic residues;
products falling within CN code 2715;    deleted
products falling with CN code 2901       deleted
and CN codes 2902 11 00, 2902 19
90, 2902 20, 2902 30, 2902 41 00,
2901 42 00, 2902 43 00 and 2902 44;
productsrailingwithin CN codes 3403      deleted
11 00 and 3403 19;
productsrailingwithin CN code 3811;      deleted
productsrailingwithin CN code 3817.      deleted
 ---pagebreak---                                                                                          13
 2. The tax referred to in Article 1 (1) unchanged
     shall also be levied on :
 a ethyl and methyl alcohol falling within   (a) any other product intended for use as
     CN codes 2207 and 2905 where            motor fuel or as an additive or extended in
     obtained by distillation from products  motor fuels, with the exception of those
     specified in paragraph 1 and intended   specified in paragraph 3;
     for use as heating fuels or as motor
     fuels. The tax shall also be levied on
     any other product intended for use,
     offered for sale or used as motor fuel
     or as an additive or extended in motor
    fuels, with the exception of those
    specified in paragraph 3 below;
b. electricity railing within CN code        unchanged
    2716, and heat, generated :
- in hydroelectric installations with a      unchanged
    capacity of over 10 MW;
- or using products railing within CN        unchanged
    codes 2612, 2844 10 to 2844 50 and
    2845 10.
3. The tax referred to in Article 1 (1) unchanged
    shall not be levied on :
- fuel wood and wood charcoal railing unchanged
    within CN codes 4401 and 4402, and
    products resulting from the distillation
    or processing of wood;
 ---pagebreak---                                                                                        14
    any product of agricultural or unchanged
    vegetable origin obtained directly or
    after chemical modification, and in
    particular alcohol's railing within CN
    codes 2207 and 2905 and crude or
    esterified vegetable oils railing within
    CN codes 1507 to 1518.
                                             -forms of energy of solar, wind .tidal and
                                             geothermal origin, or from biomass
                                             transformation.
    Products specified in paragraphs 1 and unchanged
    2 and used in metallurgical or
    electrolytic processes shall be regarded
    as being intended for use as heating
    fuels.
TITLE H - CHARGEABLE EVENT unchanged
   AND CHARGEABUJTY
Article 4                                    Article 4
1. The chargeable event for the tax shall unchanged
   be the extraction or manufacture of the
    products specified in Article 3 on the
    territory of the Community, as defined
    in Article 2, or their importation into
   that territory.
2. Member States shall not be obliged to unchanged
   treat as "extraction or manufacture
   products":
a. operations during which small unchanged
   quantities of products specified in
   Article 3 (1) and (2) (a) are obtained
   incidentally;
 ---pagebreak---                                                        15
b. the operation consi?tLng of mbdng in a unchanged
    tax warehouse products specified in
    Article 3 (1) and (2) (a) with other
    products or substances specified in that
    same Article provided that :
-   the tax referred to in Article 1 (1) and unchanged
   chargeable on the basic substances has
   been paid previously, in cases where
   the mixture obtained is intended for
   use as heating fuel or as motor fuel;
-  the amount paid is not less than the unchanged
   amount of the tax referred to in Article
   1 (1) that would be chargeable on the
   mixture intended for use as heating
   fuel or as motor fuel.
3 The consumption of products specified unchanged
   in Article 3 on the site of an
   establishment in which these products
   or some of them are obtained shall not
   be considered as a chargeable event for
   the tax referred to in Article 1 (1),
   except where such consumption is for
   purposes not related to that
   production.
 ---pagebreak---                                                       16
 Article 5                                  Articles
 1. The tax referred to in Article 1 (1) unchanged
     shall become chargeable at the time of
     release for consumption or when
     shortages are recorded.
     Release for consumption of             unchanged
     subject to the tax means :
 a. any departure, including irregular unchanged
     departure, from a           suspension
     arrangement;
 b. any extraction or manufacture, unchanged
    including irregular extraction or
    manufacture, of those products outside
    a suspension arrangement;
c. any importation, including irregular unchanged
    importation, of those products where
    they have not been placed under a
    suspension arrangement.
2. The chargeability conditions and rate unchanged
    of the tax referred to in Article 1(1)
    shall be those in force on the date on
    which the tax becomes chargeable in
    the Member State where release for
    consumption takes place or shortages
    are recorded.
The tax shall be levied and collected unchanged
according to the procedure laid down by
each Member State, it being understood
that Member States shall apply the same
procedures for levying and collection to
national products and to those from other
Member States.
 ---pagebreak---                                                                                          17
 TITLE m - PERSONS LIABLE FOR TTTLEÎH                              HOLDING         AND
PAYMENT OF THE TAX                          : MOVEMENT OF PRODUCTS
HOLDING AND MOVEMENT OF
PRODUCTS
Article 6                                      deleted
The tax referred to in Article 1 (1) shall be
payable by persons who carry out a
taxable transaction within the meaning of
Article 5.
Article 7                                     becomes Article 6
1. The production, holding;movement            1. The production, holding, movement
    and monitoring of the products            and monitoring of the products specified
    specified in Article 3 (1) and (2) (a)    in Article 3(1) shall be determined in
    shall be determined in accordance with    accordance with the provisions of Council
    the provisions of Council Directive       Directive 92/12/EEC of 25 February 1992
    92/12/EEC of 25 February 1992 on          on the general arrangements for products
   the general arrangements for products      subject to excise duty and on the holding,
    subject to excise duty and on the         movement and monitoring of such
   holding, movement and monitoring of        products.1
    such products(l).
2. In the case of electricity falling within  2. In the case of electricity falling with
    CN code 2716 and generated using          CN code 2716 and generated using
   products or in installations specified in  products or in installations specified in
   Article 3, the Commission shall, where     Article 3, the Commission shall, where
   necessary, determine the appropriate       necessary, determine the appropriate
   measures relating to trade between         measures relating to trade between
   Member States and . with third             Member States and with third countries in
   countries in accordance with the           accordance with the procedure provided
   procedure provided for in Article 13.      for in Article 10.
3. a) Invoices issued by electricity- deleted
   generating enterprises shall indicate the
   amount of tax per kW/h supplied and
   the total amount of tax payable on the
   inputs used for the electricity supplies
   invoiced;
 ---pagebreak---                                                                  18
 these amounts of tax shall be indicated on
 invoices issued by electricity-distributing
 enterprises.
     b)The amounts of tax shown on deleted
     invoices shall be the same per kW/h for
     all the customers of electricity-
     producing or electricity-distributing
     enterprises over a given period;
4. Invoices issued in respect of supplies tiejetçd
     of the primary energy sources specified
     in Article 3 (I) and (2) (a) shall
     indicate the unit rate of the tax applied
     and the amount payable; such
     information shall, where appropriate,
     be given on a prorata basis on invoices
     issued in respect of subsequent
     supplies.
        *
TITLE IV - DETERMINATION OF unchanged
THE TAX BASE
Article 8                                      becomes Article 7
The tax base shall be :                        unchanged
-   for the energy component of the tax: unchanged
    the energy content of the products
    specified in Article 3 (1) and (2).
    However, electricity as specified in
    Article 3 (2) (b° and that generated
    using the products referred to above
    shall be taxed on the basis of the
    electricity generated, the said products
    used being exemptfromthe tax;
-   for the carbon dioxide component of unchanged
    the tax : the volume of carbon dioxide
    emitted on combustion in the presence
    of excess oxygen of the products
    specified in Article 3 (1) and (2) (a).
 ---pagebreak---                                                                                            19
TTTLEV-RATES                                  unchanged
Article 9                                     becomes Article 8
 1. The rates of the tax referred to in 1. During a transitional period ending on
    Article 1 (I) shall be determined as 31 December 1999. and without prejudice
    follows :                                 to the provisions of Article 9. the Member
                                               States shall set a single rate of tax per
                                              product
                                              Member States should determine the
                                              structure of their rate in conformity with
                                              the objectives set out in Article 2 of the
                                              Council Decision 93/389/EEC(in in
                                              order to contribute to the stabilisation and
                                              limitation of CQ2 emissions by
                                              encouraging energy efficiency and by
                                              taking into account the content of carbon
                                              in the products taxed.
                                              For the application of this provision, the
                                              term product shall also apply to the
                                              bv-products covered by the CN codes
                                              specified m Article 3.
a.) for the products specified in Article 3 deleted
    (1) (a) and (b) and (2) (a), with the
    exception of the products specified at
    (b) below:
-   ECU 2.81 per tonne of carbon dioxide deleted
    emitted on combustion in the presence
    of excess oxygen, and
-   ECU 0.21 per gigajouie of energy deleted
    content. However, electricity as
    specified in Article 3 (2) (b) and that
    generated using the products specified
    in Article 3 (1) and (2) (a) shall be
    taxed at the rate of ECU 2.1 per
    MWZh, with the exception of
    electricity    generated      by
    hydroelectric installations specified in
                                             t1> OJ No. L t 6 7 , 9 . 7 . t 9 9 3 , p.32
 ---pagebreak---                                                        20
       the first indent of Article 3 (2)
       (b), which shall be taxed at the rate of
      ECU 0.76 per MW/h.
  In the interests of simplifying application deleted
  of the tax and effective monitoring,
 Member States may, in the case of coal,
 ligmte, peat and natural gas, apply a
  simplified tax schedule based on bands
 each equivalent to 5% of the carbon
 content convertible into carbon dioxide on
 combustion in the presence of excess
  oxygen and to 1.5 gigajoule of energy
  content of the crude products per tonne of
 solid fossil energy sources or liquefied
 petroleum gas or per 1.000 m3 of non-
 liquefied gas;
 b). for mineral oils :
 -    leaded or unleaded petrol falling within deleted
      CN codes 2707 and 2710 : Ecu 13.46
      per 10001;
 -    diesel and gas oil as defined in deleted
      additional note 1 (f) of CN Chapter 27:
      Ecu 15.42 per 10001;
 -    kerosene and aviation fuel as defined in deleted
      additional note 1 (d) of CN Chapter
      27: Ecu 14.40 per 10001;
-    heavy fuel as defined in additional note deleted
      1 (g) of CN Chapter 27: Ecu 17.21 per
      1.000 kg;
-    petroleum coke, etc. falling within CN deleted
     codes 2713 11 00 to 2713 90 90 : Ecu
     15.36 per 1.000 kg;
-    liquefied petroleum gases falling within deleted
     CN codes 2711 12 11 to 2711 19 00:
     Ecu 0.39 per gigajoule;
 ---pagebreak---                                                                                  21
Member States may apply a higher rate deleted
than that proddedforat (a) and (b).
                                      2. Therateof the tax shall be -a*alated
                                      in ECU half relating to thg_:.-i;ûrat of
                                      carbon dioxide emitted on combur bn. in
                                      the presence of excess oxygen and half
                                      relating to its content per gjgaioule of
                                      energy value! with reference to the
                                      relationship expressed bv the target rates
                                      mentioned in paragraph 3a) hereunder.
                                      However, electricity as specified in
                                      Article 3(2)(b) and that generated using
                                      the products specified in Article 3(1) and
                                      (2)(a) shall be taxed at rates expressed in
                                      ECU per MWh.                               ';
                                      In the interests of simplifying application
                                      of the tax and effective monitoring,
                                      Member States may:
                                      - in the case of coal, lignite, peat and
                                      natural gas apply a simplified tax schedule
                                      based on bands of carbon content and
                                      energy content;
                                      - in the case of mineral oils, apply rates
                                      expressed in ECU per 1000 1 with the
                                      exception of heavy fuel liquefied
                                      petroleum gases and methane for which
                                      the rates shall be expressed in ECU per
                                       1000 kg or as a proportion of quantities.
                                      3. With a view to the application of a
                                      harmonised fax at the end of the period
                                      specified in paragrapnl. the Member
                                      States shall endeavour to make their rates
                                      converse towards target rates which shall
                                      be set as follows:
                                      (a) for products other than those specified
                                      at®:
                                      - ECU 9.37 per tonne of carbon dioxide
                                      emitted on combustion in the presence of
                                      excess oxygen
                                      and
                                      ECU 0.70 per gigajoule of energy content
                                      However, for electricity as specified in
                                      Article 3(2Xb) and that generated using
                                      the products specified m Article 3fl> and
                                      f2¥a). the target rate shall be ECU 7 per
                                      MWh. with the exception of electricity
                                      generated bv the hydroelectric installations
                                      specified in Article 3f2Vbl for which a
                                      target rate of ECU 2.53 per MWh shall be
                                      set
 ---pagebreak---                                                                                          22
                                             (b) for mineral oils:
                                            - leaded or unleaded petrol falling within
                                            CN codes 2707 and 2710: ECU 44.87 per
                                             10001;
                                            - diesel and gas oil as defined in additional
                                            note 1(f) of Combined Nomenclature
                                            Chapter 27: ECU 51.40 per 1 0001;
                                            - kerosene and aviation fuel as defined in
                                            additional note 1(d) of Combined
                                            Nomenclature Chapter 27: ECU 48 per
                                             10001;
                                            - heavy fuel as defined in additional note
                                            1(g)     of Combined Nomenclature
                                            Chapter 27: ECU 57.37 per 1000 kg/mass;
                                            - petroleum coke etc. falling within
                                            Combined          Nomenclature        codes
                                            2713 11 00 to 2713 90 90: ECU 51.20 per
                                            1 000 kg/mass;
                                            - liquefied petroleum gases falling within
                                            CN codes 271112 11 to 271119 00:
                                            ECU 1.30 per gigajoule.
 2. The value in national currency of the becomes 4
    Ecu to be taken into consideration in unchanged
    applying this Directive shall be fixed
    once a year. The rates to be applied
    shall be those obtaining on the first
    working day in October with effect
    from 1 January of the following year.
Member States may round the amounts in unchanged
national     currency    resulting from
conversion of the amounts in Ecus
referred to in the first paragraph in
accordance with their own rules provided
that the rounding operation does not result
in an amount that is higher or lower than
the conversion value by more than 5%.
 ---pagebreak---                                                   23
  3. For file first time at the end of the dieted
      twelfth month following the date
      specified in Article 1 (2) and at the end
      of each of the ensuing six periods of
      twelve months, the Commission shall,
      in accordance with the procedure
     provided for in Article 13, raise the
     rate of the tax by one third of the
     amountfixedin paragraph 1
 4. Exceptionally, the Council, acting dejetei
     unanimously on a proposal from the
     Commission, may, if so requested and
     on the basis of information obtained by
     it in connection with the Council
     Decision       for    the     monitoring
     mechanism of Community C02 and
     other greenhouse gas emissions12 and
     additional information provided in tins
     respect, authorise on one more
     Member States to suspend temporarily
     the application of the tax in order to
     take account of the particular situation
     in Member States, developments in the
     economic situation, and progress made
     in achieving the objective of stabilising
     carbon dioxide emissions.
13
  COM(92) 181 fe* of 1.6.1992
 ---pagebreak---                                                                                          24
                                                TITLE VI - EXEMPTIONS AND
                                                REDUCED RATES
                                                Article 9
 5. Products subject to the tax referred to becomes 1. Products subject to the tax
     in Article 1 (1) shall be exempted from shall be exemptedfrompayment of the tax
     the tax where they are intended :          when thev satisfy the conditions referred
                                                to in Article 23 (1) of Directive
                                                92/12/EEC.
 - for delivery in the context of deleted
     diplomatic or consular relations;
-    for      international       organisations deleted
     recognised as such by the public
     authorities of the host Member State
     and by members of such organisations,
     within the limits and under the
     conditions laid down by the
     international conventions establishing
     such organisations or by headquarters                            -\
     agreements;
     for the armed forces of any State party deleted
    to the North Atlantic Treaty other than
    the Member State within which the tax
    is chargeable as well as for the armed
    forces referred to in Article 1 of
    Decision 90/640/EEC13, for the use of
    those forces or for the civilian staff
    accompanying them;
-   for consumption under an agreement deleted
    concluded with third countries or
    international organisations provided
    that such an agreement is allowed or
    authorised with regard to exemption
    from VAT.
These exemptions shall be subject to the deleted
conditions and limitations laid down by the
Commission in accordance with the
procedure provided for in Article 13.
Eligibility for exemption may be granted in
accordance with a procedure for
reimbursing the tax.
13
  OJ No L 349, 13.12.1990, p. 19.
 ---pagebreak---                                                                                            25
 Article 10                                     deleted
 In the case of firms with a high energy        becomes 2. In the case of firms with a
 consumption        that    are      seriously  high energy consumption that are seriously
 disadvantaged on account of an increase        disadvantaged on account of an imbalance
 in imports from third countries which are      in trade from other Member States, or an
not specified in Article 1 (2) and which        increase in imports from third countries,
have not introduced a similar tax or           Member States may, while complying with
measures having an equivalent financial        the rules of Community law and the
impact, the Commission may authorise           Community's international commitments.
Member States, after notification of the       grant such firms:
corresponding plans, to grant such firms:
(i) a graduated reduction in the tax           (i)a graduated reduction in the tax payable
     payable under Article 9 or an             or an equivalent refund.
     equivalent refund where the total
     energy cost, inclusive of all taxes       The Member States shall calculate the
     except VAT, expressed as a                bands of the reduction on the basis of the
     percentage of the value added as          total energy cost, inclusive of all taxes
     defined in Article 2 of Directive         except VAT, expressed as a percentage of
     67/227/EEC of         11 April 1967       the value added as defined in Article 2 of
     generated in respect of the products      Directive 67/227/EEC          of         11
     obtained using the energy taken into      April 1967(14)
     account in determining the above cost,
     amounts to at least 8%.
(ii) A full and temporary exemption from       (ii)A full and temporary exemption from
     the tax referred to in Article 1 (1) or   the tax payable or an equivalent refund
     an equivalent refund provided that the    provided that the firms hâve made
     firms have made substantial efforts to    substantial efforts to save energy or to
     save energy or to reduce carbon           reduce carbon dioxide emissions. The
     dioxide emissions.                        Member       States    shall  notify    the
                                               Commission of the commitments they
                                               enter into with these firms.
The conditions for granting the tax deleted
     reductions or exemptions referred to
     at (1) and (2) above shall comply with
     the rules of Community law and with
     the      Community's       international
     commitments.
                                               14) OJ No. L 7 1 , 14.4.1967, p.1302
 ---pagebreak---                                                                                        26
Article 11                                  deleted
Member States shall reduce the amounts                  . Member States may reduce
of tax payable or, where appropriate, grant the amounts of tax payable or, where
equivalent refunds to the extent of n©w     appropriate, grant equivalent refunds to
investment expenditure incurred by a firm   the extent of new investment expenditure
during a given reference period in          incurred by a firm during the period
improving the efficient use of energy or in specified in Article 8 in improving the
limiting carbon dioxide emissions. The      efficient use of energy or in limiting
nature and proportion of the investment     carbon dioxide emissions.
expenditure taken into consideration and    These amounts or equivalent refunds mav
the reference period shall be determined by represent the entire cost of the investment
the Commission in accordance with the       made.
procedure provided for in Article 13.
Where the amount of such expenditure        Where the amount of such expenditure
exceeds the amount of tax payable or paid,  exceeds the amount of tax payable or paid,
a tax payable or paid, a tax credit or a    a tax credit or a corresponding entitlement
corresponding entitlement shall be carried  shall be carried over to subsequent years.
over to subsequent years.
Article 12                                  deleted
The arrangements for granting tax deleted
exemptions, reductions or refunds referred
to in Article 10 and the arrangements for
tax incentives referred to in Article 11
shall be reviewed every three years.
Before expiry of each three-year period, deleted
and for the first time before expiry of the
third year of application of the tax, the
Commission shall present to the Council a
report on the operation of the system
accompanied, where appropriate, by a
proposal for amending this Directive.
 ---pagebreak---                                                                                        27
TITLE VI - COMMITTEE ON THE TITLE VII - COMMITTEE
CARBON DIOXIDE/ENERGY TAX
Article 13                                   becomes Article 10
1 The Commission shall be assisted by a 1. The Commission shall be assisted by
   Committee       on      the      Carbon       the Committee laid down in Article 24
   Dioxide/Energy Tax,           hereinafter     of the Directive 92/12/EEC of 25
   referred to as the "Committee". The           February 1992( 1)
   Committee shall be composed of
   representatives of the Member States
   and chaired by a Commission
   representative.
2 Without prejudice to the matters deleted
  frilling within the remit of the
   Committee provided for in Directive
   92/12/EEC of 25 February 1992,(1)
  the measures necessary for the
   application of the provisions of this
  Directive shall be adopted in
  accordance with the procedure laid
  down in paragraphs 3 and 4.
3 The Commission representative shall        becomes 2. The representative of the
  submit to the Committee a draft of the     Commission shall submit to the committee
  measures to be taken. The Committee        a draft of the measures to be taken. The
  shall deliver its opinion on the draft     committee shall deliver its opinion on the
  within a time-limit which the Chairman     draft within a time-limit which the
  may lay down according to the              chairman may lay down according to the
  urgency of the matter. It shall take its   urgency of the matter. The opinion shall
  decision by the majority laid down in      be delivered by the majority laid down in
  Article 148 (2) of the Treaty. The         Article 148 (2) of the Treaty in case of
  Chairman and the Commission                decisions which the Council is required to
  representative shall not vote.             adopt on a proposalfromthe Commission.
                                             The votes of the representatives of the
                                             Member States within the committee shall
                                             be weighted in the manner set out in that
                                             Article. The chairman shall not vote.
 ---pagebreak---                                                                                          28
     The Commission shall adopt the          becomes X
     intended measures where they are in     a) The Commission shall adopt the
     accordance with the Committee's             measures envisaged if they are in
     opinion. Where the intended measures        accordance with the opinion of the
     are not in accordance with the              committee.
     Committee's opinion or in the absence   b) If the measures envisaged are not in
     of any opinion, the Commission shall    accordance with the opinion of the
    forthwith place before the Council a     committee, or if no opinion is delivered,
     proposal relating to the measures to be the Commission shall,, without delay,
    taken. The Council shall act by          submit to the Council a proposal relating
    qualified majority.                      to the measures to be taken. The Council
                                             shall act by qualified majority.
If, on expiry of a period of three months    IÇ on expiry of a period to be laid down in
from the date on which the matter was        each act to be adopted by the Council
referred to it, the Council has not adopted  under this paragraph but which may in no
any measures, the Commission shall adopt     case exceed three months from the date of
the proposed measures.                       referral to the Council, the Council has not
                                             acted, the proposed measures shall be
                                             adopted by the Commission.
    In addition to the measures referred to deleted
    in paragraph 2, the Committee shall
    examine the matters raised by its
    Chairman, either on his own initiative
    or at the request of the representative
    of a Member State, and concerning the
    application of the Community
    provisions on the tax referred to in
    Article 1(1).
 ---pagebreak---                                                                                        29
 TITLE VH - MUTUAL ASSISTANCE                  TITLE Vffl - MUTUAL ASSISTANCE
 Article 14                                    becomes Article II
 1 Afifthindent shall be added to Article 1. Afifthindent shall be added to Article
     1 (1) of Directive 77/799/EEC*5 , as         1 (1) of Directive 77/799/EEC(15), as
     last     amended        by      Directive    bat amended by Directive 92/12/EEC
     92/12/EEC(l):                                (1):
 "-the carbon dioxide/energy tax introduced "-the carbon dioxide/energy tax introduced
by      Council       Directive    92/..7EEC      by CouncS Directive 95/....JEEC
of.../1992".                                      o£..7199Sfi6V"
2 A fourth indent shall be added to 2. A fourth indent shall be added to
     Article 3 (f) of Directive 76/308/EEC17      Article    3     (f)   of   Directive
     as last amended by Directive                 767308/EEQ17) as test amended by
4
     92/.../EEC o£..1992 :                        Directive        92/108/EEC        of
"-the carbon dioxide/energy tax introduced "-aie carbon dioxide/energy tax introduced
by      Council      Directive 92J..JEEC          by Council Directive 95/...7EEC
o£...1992"..                                      of M995Q6}*
15
   OJ No. L  336, 27.12.1977, p.15                C16>......
17
   OJNo.L73,19.3.1976, p.18                       <18>0J No. L 390, 31.12.1992, p.124
 ---pagebreak---                                                                                     30
TITLE V m : FISCAL NEUTRALITY            deleted
Article 15                               becomes Article 12 ,
1 Member States shall :                  Not later than 31 December 1998. the
                                         Commission shall present to the Council
-  notify     the    Commission, when    and to Parliament a report on the
   introducing the tax referred to in    implementation of this Directive by the
   Article 1 (1), of the steps they have Menfter States ana* pn the effectiveness of
   taken to ensure tax neutrality;       the measures taken bv the Community and
                                         the Member States to attain the objectives
-  inform the Commission each year of    set bv the Council with respect to carbon
   the conditions under which tax dioxide emissions, accompanied bv
   neutrality has been achieved.         appropriate proposals on the rules for the
                                         application of harmonised rates of tax on
                                         carbon dioxide and energy.             The
                                         Commission proposals shall in particular
                                         take account of the need to safeguard the
                                         competitiveness of Community industries
                                         and ensure that the tax does not reflect an
   The measures taken by the Member increase in the overall tax burden. Before
   States to ensure tax neutrality shall 1 January 2000. the Council, acting
   comply with Community law.            unanimously on a proposal from the
                                         Commission, shall, after examining the
                                         Commission report and consulting the
                                         European Parliament, adopt the measures
                                         necessary for the introduction of
                                         harmonised rates of tax in the Community.
 ---pagebreak---                                                                                      31
TITLE IX - FINAL PROVISIONS
Article 16                                   becomes Article 13
 1 Member Stales          bring into force   1. Member States shall bring into force
    the      laws,                      and  the laws, regulations and administrative
    administrative             necessary to  provisions necessary to comply with this
    comply with          Directive on 1      Directive on 1 January 1996.
    January 1993.
When Member States adopt
measures shall contain a             to this
Directive or shall be                  such
reference on the occasion           official
publication. The arrangements
such a reference shaH be laid down by
Member States.
    Member States shall inform the unchanged
    Commission of the mam provisions of
    national law which they adopt to
    comply with this Directive.
Article 17                                   becomes Article 14.
This Directive is           to
States.
Done at Brussels,
For the Council,
The President
 ---pagebreak---                                                                    ISSN 0254-1475
                                                             COM(95) 172 final
                                              DOCUMENTS
EN                                                                   14 09 12
                                     Catalogue number : CB-CO-95-204-EN-C
                                                              ISBN 92-77-88886-5
Office for Official Publications of the European Communities                      *
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