The Energy Taxation Directive 2003/96 sets out rules for the taxation of different energy products in the EU. A reform of the directive was proposed by the Commission as part of the European Green Deal in December 2019, which aims to better align energy taxation with the EU’s increased climate objectives. The reform introduces updated minimum taxation rates for fossil fuels and energy sources based on environmental criteria. A public consultation was launched to gather stakeholder views in March 2020.
After intense negative engagement from heavy industry sectors, the EU Commission proposal contained unambitious reforms of the taxation of energy-intensive industry and fossil gas, although it proposed increased taxation of maritime and aviation fuels despite opposition from the affected sectors. In February 2024 a new compromise proposal was tabled at the EU Council, with discussions ongoing.
Energy Transition & Zero Carbon Technologies
Under consideration: first reading and being discussed in Parliament and Council.
Energy Transition & Zero Carbon Technologies
Under consideration: first reading and being discussed in Parliament and Council.
On 04 February, Destination 2050, a coalition between different European industry associations including Airlines For Europe (A4E), AeroSpace and Defence Industries Association of Europe (ASD), Airports Council International Europe (ACI Europe) and European Regions Airline Association (ERA), put out their new decarbonization roadmap.
It supports a long-term aspirational goal through ICAO of net-zero CO2 emissions from international aviation by 2050, supports the Carbon Offsetting and Reduction Scheme for International Aviation, the Paris Agreement, supports the Carbon Border Adjustment Mechanism for sustainable aviation fuel and advocated for increased use of bio-based SAF in aviation in the short-term with clear support for a switch to zero-emissions technologies in the medium to long-term. The roadmap appears to generally support policies incentivizing the production and uptake of SAFs. Destination 2050's roadmap supports continued free emissions of SAF allowances after 2030 and the inclusion of carbon removals under the EU ETS by 2026 alongside the re-investment of EU ETS revenues in clean technologies research and upscaling. The roadmap opposes any increase to SAF and e-fuel targets under ReFuelEU, but advocated for a gradual SAF supply increases of the SAF target under ReFuelEU.
More negatively, Destination 2050's roadmap opposes the EU tax on jet fuel and advocated for the alignment of feedstocks sustainability criteria for SAFs while advocating for the removal of non-biogenic CO2 restrictions. It also supports the Clean Industrial Deal but emphasize carbon leakage and competitiveness concerns from the Fit for 55 package, advocating that EU regulations must align with global measures.
In a 9 September Euronews article, Airlines for Europe (A4E) welcomed Hungary’s proposal to delay the EU aviation jet fuel levy until 2049 by emphasizing cost and competitiveness concerns resulting from the EU Energy Taxation Directive, and called aviation fuel taxes “counterproductive”.
On March 25th, SmartEN, AVERE and Eurelectric released a letter supporting the reform of the EU Energy Taxation Directive to incentivize the uptake of electric vehicles. The associations advocated in favor of an amendment that would ensure electric vehicles will not be taxed twice if used as storage for grid electricity.
In a February 28th letter to the EU President of the Economic and Financial Affairs Council, BusinessEurope supported the revision of the EU Energy Taxation Directive with major exceptions - opposing a tax on maritime and aviation fuels and supporting several sector exemptions.
The Financial Times reported in an October press briefing that the CEOs of Lufthansa and Ryanair, and the chair of Airlines for Europe publicly criticized EU plans to phase-out fossil fuel subsidies, appearing to advocate for the continued exclusion of kerosene jet fuel from taxation.
In a May 10th position paper, Airlines For Europe (A4E) opposed an EU jet fuel tax, emphasizing costs, competitiveness and carbon leakage concerns. A4E also argued the tax would impede tourism and decarbonization efforts by diverting funds from decarbonization solutions. In the position paper, A4E further appeared to leverage its support for the EU Emissions Trading Scheme, EU sustainable aviation fuels mandate, and global Carbon Offsetting and Reduction Scheme to oppose the kerosene tax.
On November 30th, Airlines For Europe (A4E) Managing Director, Thomas Reynaert, released a letter providing policy recommendations ahead of an EU Transport Minister’s meeting occurring on December 5th. The letter appeared to support the Alternative Fuels Infrastructure Regulation while proposing exemptions for small airports and cautioned against targets for hydrogen and electric re-charging infrastructure for aircraft. It also supported an EU sustainable aviation fuel mandate while appearing to oppose the provision enabling member states to increase national mandates, suggest that fuel cost implications from the invasion of Ukraine be considered for interim targets, and emphasize carbon leakage concerns.
On December 5th, A4E released a YouTube video opposing an EU jet fuel tax, while supporting the EU Emissions Trading System (EU ETS). The video stated a jet fuel tax would undermine the EU ETS, distort competition and could lead to an increase in CO2 emissions.
Following trilogue negotiations on the EU ETS for aviation, A4E released a position paper on December 7th. The paper appeared supportive of the EU’s decision to maintain the scope of the EU ETS to intra-EU flights and create sustainable aviation fuel-based allowances, while opposing the proposed 2026 phase-out date for free emissions allowance.
On 26th September, the President of the Spanish Confederation of Business Organizations (CEOE) stated opposition to fiscal measures and taxes being placed on the aviation industry under the EU's Energy Taxation Directive, suggesting it would be a burden on the competitiveness of industry.
In a position paper, published on 13th June, CEMBUREAU opposed the removal of taxation exemptions for mineralogical processes in the reform of the Energy Taxation Directive, and stressed the policy should avoid overlap with the EU Emissions Trading System (EU ETS). On the 17th June, CEMBUREAU also published responses to the EU Commission’s consultations on the Renewable Energy Directive reform Delegated Act on fuels of Renewable Non Biological Origin (RNFBOs), both of which did not support the EU Commission’s proposal. The association did not support simultaneity and location criteria, and suggested that CO2 accounting for GHG savings from recycled carbon fuels should not apply upstream.
An open letter to EU policymakers on 19th April, initiated by Air Liquide's Head of Innovation Dr. Armin Günther, supported a long-term role for internal combustion engine vehicles in the EU, advocating for EU policies (including the Alternative Fuels Infrastructure Regulation, the Energy Taxation Directive, CO2 Standards for Light and Heavy Duty Vehicles and the Renewable Energy Directive) to support e-fuels and hydrogen over the electrification of transportation. The letter stated that “electromobility will in all likelihood not lead to any significant greenhouse gas reductions in the period up to 2030, which is crucial for the long-term success or failure of climate protection. In particular to, the high CO2 emissions caused by the construction of batteries, the high share of fossil fuels in power generation that will still exist for a long time and the enormous expense for the charging infrastructure.”
In direct consultation with EU Parliament rapporteur for the Energy Taxation Directive (ETD) on the 18th March, BusinessEurope Green Tax Group supported the revision of the ETD and the reform to introduce a framework based on energy content. However, the group stressed concerns regarding elements which they said would harm the competitiveness of energy-intensive industry.
In a joint statement, published on 2nd March, energy-intensive associations including Eurofer, the International Federation of Industrial Energy Consumers and the Confederation of European Paper Industries advocated for less stringent measures for high-efficiency cogeneration (combined heat and power, CHP) in reforms to EU climate policy. The statement advocated against strong criteria for high-efficiency CHP in the Energy Efficiency Directive and was supportive of exemptions for high-efficiency CHP in the Energy Taxation Directive.
In feedback to the EU Commission in November 2021, Confindustria appeared not to support the EU Energy Taxation Direction reform proposal, not supporting taxation rates applied to fossil gases, and advocating for a longer phase-in period, exemption for EU ETS sectors and a process tax reduction for mineralogical processes.
In feedback to the EU Commission in November 2021, the Federation of German Industry appeared not to support the proposed EU Energy Taxation Directive reforms, suggesting proposed change of taxation for fossil gas in the ETD would "jeopardize the competitiveness of energy intensive industry", and opposing a kerosene tax for aviation.
In a position paper on the EU’s Energy Taxation Directive (ETD), the International Federation of Industrial Energy Consumers (IFIEC) supported the reform with major exceptions, as it was unsupportive of the removal of exemptions for energy intensive industries and stressed it should not create additional tax burdens.
In response to the EU Commission’s request for input on the energy intensive industries’ transition pathways working document, CEMBUREAU seemed to support indirect cost compensation in the EU Emissions Trading System. The association also was supportive of policies to increase CCUS in the EU and using the EU standardization process to increase the market for low-carbon cement. However, it did not support the removal of the exemption of mineralogical processes in the Energy Taxation Directive.
Cefic released a position paper which advocated to weaken the EU Commission’s Energy Taxation Directive proposal by maintaining exemptions for energy intensive industry and flexibilities for Member States. The association only supported environmental charges for sectors not covered by the EU Emissions Trading System.
Eurelectric released a position paper on the EU’s Energy Taxation Directive, in which it supported several aspects of the policy revision. The group stated support for the expansion of the scope of the policy, and suggested that the 10-year transition period for some fossil fuels should not be extended. Eurelectric also supported the phase out of tax exemptions on aviation and maritime fuels, but stressed the need for economic feasibility on the timing.
CEMBUREAU published a joint position paper advocating against the removal of Mineralogical processes from the sectors exempted from the Energy Taxation Directive (ETD), and stressed the cost burden from aligning the ETD with the EU's climate goals. The position paper emphasized the costs for industry from the EU ETS increased carbon prices and the increasing of the level of GHG reductions mandated by 2030 to 61%.
Verband der Chemischen Industrie’s Director General Wolfgang Große Entrup advocated for the abolishment of the EEG renewable energy surcharge in Germany due to high energy prices in Europe in October 2021. He also did not appear to support the revision of the Energy Taxation Directive and the State Aid Guidelines for Climate and Energy due to the high energy prices.
BDI published new position papers targeting the new German administration, strongly supporting increased ambition on national energy efficiency deployment, but opposing the proposed EU kerosene tax for aviation and advocating for increased free emissions permits for intra-EU feeder flights within the EU ETS.
An easyJet press release this week announced support for EU policies to decarbonize aviation, including tax breaks and reductions in airport charges for zero-emissions aircraft. Additionally, the press release reiterates their support for the expansion of key EU aviation climate policies, including a proposed kerosene fuel tax, the EU ETS, and a SAF mandate, to cover all international flights within the EU.
Eurogas have released a position paper on carbon pricing, in which it advocated for preferential treatment for fossil gas in the EU’s Energy Taxation Directive revision. The association expressed support for the role of fossil gas in the energy mix, highlighting the need for fossil gas when switching away from coal, without placing clear conditions on CCS or methane emission abatement. Eurogas also supported blending of fossil gas with low-carbon gases, whilst supporting tax exemptions for renewable, decarbonized and low-carbon gases without clear definitions on what is included in these terms and without being clear about the source or the extent to which CCS will accompany them.
The table below lists the entities found to be most engaged with the policy. The entities are ranked by performance band. InfluenceMap tracks over 500 companies and 250 industry associations globally. Each entity name links to its full InfluenceMap profile, where the evidence of its engagement can be found.
| Influencemap Performance Band | Organization | Policy Position | Policy Engagement Intensity |
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