Damaging fuel subsidies are here to stay
Brussels, 13th April 2011. The European Commission has put forward a proposal for the review of the Energy Tax Directive which maintains an environmentally harmful exemption on tax for fuel used by the fishing and shipping sectors.
This is disappointingly incoherent with the Commission´s climate commitments for maritime sectors, and it constitutes a lost opportunity to promote fuel efficiency in the shipping and fishing industries.
Under the current proposal, the Energy Tax Directive prohibits Member States from putting an energy tax on the fuel used by marine vessels. By proposing to continue this measure, the Commission is in fact perpetuating a harmful indirect subsidy that sustains damaging practices such as fuel intensive, destructive fishing methods and gives the wrong economic signal regarding the need to reduce fuel consumption and greenhouse gas emissions in the maritime sector.
Seas At Risk has urged the European Commission to remove the mandatory fuel tax exemption for fisheries since 2007, and in a letter sent earlier this year to President Barroso by almost 100 NGOs, including Seas At Risk, the issue of tax exemptions as harmful indirect subsidies was also highlighted.
Not only do fuel tax exemptions provide a perverse incentive for environmentally damaging techniques, but they also rob Member States of the possibility to draw revenues from the fuel used for these activities, particularly at a time when most EU governments are struggling to reduce spending and increase national income.
The Commission’s proposal will now be discussed by the Council under the EU’s special legislative procedure, which does not confer decision-making power to the European Parliament.
The European Commission’s press release:
The European Commission's Proposal:
SAR 2007 submission on the Green Paper: