Fleets should expect another major increase in fuel prices – on top of the usual tax and retail price increases – after the European Commission confirmed it is planning an EU-wide carbon tax for motor fuels.
The new rules would see an additional tax imposed on diesel and petrol, in additional to VAT and fuel duty.
Thomas Carroll from the EU’s taxation directorate general told a recent meeting of European aaccountants that the new incoming new commission could review the EU’s 2003 energy taxation directive as early as the New Year.
This would include a draft, which is already written, that would insist excise duties contain a tax on CO2 emissions on sectors, including transport, which are currently excluded from EU emissions trading.
The draft proposals - seen by Fleet News - insist excise duties should contain a tax based on the CO2 emissions of specific fuels, with its level set by complex formulae.
The timing of the proposal – just after the conclusion of December’s Copenhagen climate change summit at which the EU is likely to make tough new long-term commitments to reduce CO2 emissions – means it is less likely to be challenged politically.
However, it will be easier to resist legally, because although energy and climate change policies are now decided by majority voting in the EU Council of Ministers following ratification of the Lisbon Treaty, taxation decisions must remain unanimous.
If it does fail, the commission could take a case to the European Court of Justice arguing a CO2 levy should be considered under climate change-based majority rules rather than taxation unanimity.
Should the formal proposals come in the spring, it is likely to take until the end of next year to agree and another 18 months for enforcement.