Proposal for a Council Decision authorising Germany to apply a reduced rate of excise duty to certain mineral oils, when used for specific purposes, in accordance with the procedure provided for in Article 8(4) of Directive 92/81/EEC

Proposal for a COUNCIL DECISION authorising Germany to apply a reduced rate of excise duty to certain mineral oils, when used for specific purposes, in accordance with the procedure provided for in Article 8(4) of Directive 92/81/EEC

(presented by the Commission)

EXPLANATORY MEMORANDUM

Under Article 8(4) of Council Directive 92/81/EEC on the harmonisation of the structures of excise duties on mineral oils, [1] the Council, acting unanimously on a proposal from the Commission, may authorise any Member State to introduce exemptions from, or reductions in, excise duties on grounds of specific policy considerations.

[1] OJ L 316, 31.10.92, p. 12, Directive as last amended by Directive 94/74/EC (OJ L 365, 31.12.94, p. 46).

The German authorities have informed the Commission that they wish to bring a new law on the continuation of environmental tax reforms into force on 1 January 2000, differentiating levels of mineral oil duty on fuels according to their sulphur content. The draft law includes inter alia rules on differentiating levels of excise duty according to the sulphur content of the fuel. The purpose of this preferential tax treatment is to speed up the introduction of sulphur-free fuels.

The new law will provide for mineral oil duty on petrol and diesel fuel with a sulphur content of over 50 ppm (parts per million) to be increased by 3 pfennigs per liter from 1 November 2001. It provides further that, from 1 January 2003, this higher tax is to be applied to fuels with a sulphur content of over 10 ppm.

Germany therefore requests authorisation from 1 November 2001 to 31 December 2002, to apply to fuels with a maximum sulphur content of 50 ppm a mineral oil tax of 3 pfennigs per liter less than that on fuels with a higher sulphur content and from 1 January 2003, to apply to fuels with a maximum sulphur content of 10 ppm a mineral oil tax of 3 pfennigs per liter less than that on fuels with a higher sulphur content.

In accordance with Directive 92/81/EEC, the other Member States have been informed of this request.

The Commission has carefully examined the request from Germany and has prepared a proposal for Council Decision authorising a differentiated rate of excise duty for fuels with a maximum sulphur content of 50 ppm from 1 November 2001 to 31 December 2002.

However, the Commission also considers that more time is needed to examine carefully certain aspects of the request for a differentiated rate of excise duty for fuels with a maximum sulphur content of 10 ppm. In particular, further examination of technological issues and environmental benefits is required together with a more detailed examination of how fuel standards issues can effect competition and trade within the single market.

The Commission has therefore prepared a Communication to the Council to explain these concerns and to explain why no proposal has been prepared as yet for fuels with a maximum sulphur content of 10 ppm.

Directive 92/81/EEC provides for the Commission to review such exemptions and reductions periodically. If the Commission considers that they may no longer be applied because they distort competition or the operation of the internal market or are incompatible with Community policy on protection of the environment, it is to present appropriate proposals to the Council.

In any event, on the basis of a proposal from the Commission, this derogation must be reviewed no later than 31 December 2002 when the authorisation granted by this Decision expires. The Council will review the situation on the basis of a Commission Proposal and decide whether the authorisation granted under Article 1 of this Decision should be withdrawn, modified or confirmed.

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to Council directive 92/81/EEC of 19 October 1992 on the harmonisation of the structures of excise duties on mineral oils [2], and in particular Article 8(4) thereof,

[2] OJ L 316, 31.10.92, p. 12, Directive as last amended by Directive 94/74/EC (OJ L 365, 31.12.94, p. 46).

Having regard to the proposal from the Commission,

Whereas:

(1) Pursuant to Article 8(4) of Directive 92/81/EEC, the Council, acting unanimously on a proposal from the Commission may authorise any Member State to introduce exemptions or reductions in the excise duty charged on mineral oils for special policy considerations.

(2) The German authorities have informed the Commission that they wish to bring a new law on the continuation of environmental tax reforms into force on 1 January 2000, differentiating levels of mineral oil duty on fuels according to their sulphur content.

(3) The other Member States have been informed thereof.

(4) The German authorities have notified the draft law on the continuation of environmental tax reforms to the Commission under Article 88(3) of the Treaty; this decision does not prejudge the outcome of the relevant state aid procedures under Articles 87 and 88 of the Treaty.

(5) The Commission regularly reviews reductions and exemptions to check that they are compatible with the operation of the internal market or with Community policy on protection of the environment.

(6) Germany has requested authorisation from 1 November 2001 to 31 December 2002, to apply to fuels with a maximum sulphur content of 50 ppm a mineral oil tax of 3 pfennigs per liter less than that on fuels with a higher sulphur content; the Council is to review its application on the basis of a proposal from the Commission no later than 31 December 2002 when the authorisation granted by this decision expires.

HAS ADOPTED THIS DECISION:

Article 1

In accordance with Article 8(4) of Council Directive 92/81/EEC, Germany is authorised from 1 November 2001 until 31 December 2002 to apply a different rate of excise duty to fuels with a maximum sulphur content of 50 parts per million provided that these differential rates are in accordance with the obligations laid down in Council Directive 92/82/EEC of 19 October 1992 on the approximation of the rates of excise duties on mineral oils [3], and in particular the minimum rates of excise duty provided for in Articles 4 and 5 thereof.

[3] OJ L 316, 31.10.92, p. 19, Directive as last amended by Directive 94/74/EC (OJ L 365, 31.12.94, p. 46).

Article 2

This Decision is addressed to Germany.

Done at Brussels,

For the Council

The President