Home Associations Revised Energy Taxation Directive should enable the transition to the decarbonisation of maritime transport

Revised Energy Taxation Directive should enable the transition to the decarbonisation of maritime transport

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Martin Dorsman

Revised Energy Taxation Directive should enable the transition to the decarbonisation of maritime transport

The European maritime industry partners – ECSA, INTERFERRY, EUDA and CLIA Europe – welcome the long awaited report on the evaluation of the Energy Taxation Directive (ETD) published by the European Commission yesterday. 

They agree that this directive needs updating and may be seen as a means of enabling the transition to a carbon neutral economy.

They recognise that the current Directive is not providing equal treatment of energy supplies to the shipping industry thus hampering investments in and the uptake of cleaner technologies, such as shore side electricity, fuel cells, methanol, etc.  They therefore advocate a technology neutral approach.  In view of the global nature of the industry and the importance of moving to greener shipping through the use of cleaner technologies in order to ensure that environmental objectives are met, a revised EU Energy Taxation Directive should provide for a mandatory EU wide taxation exemption for all energy carriers (i.e. fuels and electricity, including shore-side). Such level playing field would help close the cost gap between Heavy Fuel Oil and alternative fuels and electricity.

“We strongly believe energy taxation should be used to enable the transition to the decarbonisation of transport by incentivizing the uptake of low-carbon and carbon-free alternative fuels and to remove disparities in energy taxation. Taxation has a major impact on the price competitiveness of alternative fuels and therefore a technology neutral approach should be adopted to create a level playing field. Disparities in energy taxation for shore-side supply for ships and energy used to generate alternative fuels should be addressed.  It is unfortunate that our forward-looking approach, which was also reflected by the European Parliament in its report of October 2018 on ‘The deployment of infrastructure for alternative fuels in the EU’   is not sufficiently reflected in the report. It is a concrete proposal on how to make the Directive a tool for encouraging further use of alternative fuel and electricity, in order to facilitate Europe’s decarbonisation of maritime transport,” said ECSA’s Secretary General, Martin Dorsman.

These stakeholders also jointly call for the retention of the tax free bunkers and luboils provided for in the Energy Taxation Directive which are a reflection of the international norm and are essential for EU companies to compete on the same footing as shipowners and suppliers from outside the EU – as recognised in recital 23 of the current directive. “We welcome the recognition in the report that ‘any taxation regime for marine fuels, if not established at the international level, would likely be circumvented by a shift of bunkering operations to countries with no or lower fuel taxes’,” continued Mr Dorsman. “The industry is global and therefore solutions to the climate objective must be global to be effective and for European companies not to endure a competitive disadvantage. For Europe to be at the forefront of this transition, it can and should ensure it has in place enabling measures encouraging the transition.”

The maritime industry’s position may be accessed here.

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