From Brussels to Paris, energy taxation is back on the table

illuminem summarizes for you the essential news of the day. Read the full piece on Euractiv or enjoy below:

🗞️ Driving the news: Energy taxation is at the center of European policy debates, with former Italian Prime Minister Mario Draghi urging lower energy taxes to improve competitiveness
• The European Green Deal's revision of the Energy Taxation Directive (ETD), which aims to tax energy based on environmental impact, has faced three years of political deadlock
• National exemptions and the need for unanimous Council approval have slowed progress

🔭 The context: Draghi's report highlights Europe's higher energy taxes compared to global competitors, calling for a "common maximum level of surcharges"
• Meanwhile, France's public auditor raised concerns about the inconsistency in taxing electricity more heavily than fossil fuels
• With the upcoming carbon market expansion in 2027, there are worries that combined energy taxes and carbon pricing may overly burden households

🌍 Why it matters for the planet: Aligning energy taxes with carbon prices is key for advancing climate goals without causing undue financial strain
• Reducing tax breaks on fossil fuels and ensuring fair taxation of renewable energy can help meet emissions targets while supporting the energy transition

⏭️ What's next: The EU must find consensus on revising the ETD to balance climate ambition with economic and social concerns
• If agreement remains elusive, countries may have to pursue alternative taxation strategies to avoid double burdens on consumers

💬 One quote: "Fuels will start being taxed according to their energy content and environmental performance," the European Commission stated in its 2021 ETD revision proposal

📈 One stat: Electricity in the EU is taxed 1.4 times more than gas, according to the European electricity trade association Eurelectric

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