Members' Research Service By / January 20, 2022

Revision of the Energy Taxation Directive: Fit for 55 package [EU Legislation in Progress]

Taxation is still largely a Member State competence. When it comes to tax rates, EU legislation only sets harmonised minimum rates of taxation in order to avoid market distortions.

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Written by Miroslava Karaboytcheva (1st edition).

The revision of the Energy Taxation Directive (ETD) is part of the ‘fit for 55’ package. The current ETD (Directive 2003/96/EC) is outdated and out of sync with the EU’s climate and energy objectives. It favours the use of fossil fuels and no longer contributes to the proper functioning of the internal market. The aspects of energy taxation requiring most urgent revision are the level and structure of minimum rates, replacement of the volume-based approach to energy taxation with one based on energy content and environmental performance, and the introduction of an indexation mechanism. The effectiveness of the current directive is further limited by outdated coverage of energy products, specifically biofuels, and a series of tax differentiations, reductions and exemptions.

In July 2021, the Commission presented a proposal for the revision of the Energy Taxation Directive. Its objective is to align the taxation of energy products with EU energy and climate policies by promoting clean technologies, removing outdated exemptions and reducing rates that de facto encourage the use of fossil fuels. The ETD revision is a consultation procedure. It requires unanimity in Council, after consulting the European Parliament and the European Economic and Social Committee. Parliament has assigned the file to the Committee on Economic and Monetary Affairs, which appointed a rapporteur in September 2021. The ITRE committee is associated with the procedure under Rule 57.


Proposal for a Council Directive restructuring the Union framework for the taxation of energy products and electricity (recast)
Committee responsible:Economic and Monetary Affairs (ECON)COM(2021)0563
Rapporteur:Johan Van Overtveldt (ECR, Belgium)2021/0213(CNS)
Shadow rapporteurs:Georgios Kyrtsos (EPP, Greece)
Joachim Schuster (S&D, Germany)
Ondřej Kovařík (Renew, Czechia)
Claude Gruffat (Greens/EFA, France)
Gunnar Beck (ID, Germany)
José Gusmão (The Left, Portugal)
Consultation procedure (CNS) –
Parliament adopts a
non-binding opinion only
Next steps expected: Publication of draft report

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