European Commission urges end to tax reform deadlock in energy cost-cutting plan
T he European Commission 'stands ready' to help EU governments reach an agreement on reforms to the Energy Taxation Directive proposed back in 2021, according to a leaked draft of an action plan to cut energy costs that put Europe at a disadvantage with competitors China and the US.
But with tax matters one of a handful of EU policy areas where legislation requires the unanimous backing of all 27 member state governments, reform is proving hard to achieve. Talks in the EU council have been deadlocked for years, with countries divided notably over whether the airline and shipping industries should continue to enjoy tax-free fossil fuels.
'The Council should conclude the revision of the Energy Taxation Directive ('ETD'), proposed in 2021, which aims at aligning the taxation of energy products with EU energy and climate policies, promoting clean technologies and removing outdated exemptions and reduced rates that currently encourage the use of fossil fuels,' the leaked text runs.
Among the proposed reforms is tax relief for low-income households. The European Parliament's industry and energy committee adopted an opinion on the proposal Wednesday, calling for the EU to bolster the reform with measures to 'incentivise local self-production, storage, sharing, and consumption of renewable energy'.
But the committee's role is merely advisory, and although the prerogative lies ultimately with the EU Council, the reform cannot go ahead until the parliament's economy committee also adopts its own position on the proposal.
The draft cost-cutting plan – seen by Euronews and due to be published in its final form on 26 February alongside a flagship Clean Industrial Deal – promises guidance for governments on how to reduce electricity levies to the lowest possible under the current regulations.
It also looks for non-taxation approaches, for example by promoting demand reduction to reduce price spikes during times of peak electricity demand, and a market based approach to incentivize energy efficiency improvements.
The Japanese model
Another mooted approach to reducing energy costs is 'demand aggregation' for imports of liquefied natural gas, with EU buyers able to 'leverage their economic weight' to push for lower prices in joint purchasing agreements.
The draft plan goes further, however, suggesting adopting a 'Japanese model' where European countries could invest in export facilities in gas producing countries to build up links with suppliers.
One of the paradoxes during the energy crisis of 2022 was that electricity prices hit record highs even when the bulk of power in the grid was coming from renewable sources like wind and solar, which last year overtook fossil fuel-fired generation. This is due to a market mechanism where the most expensive ingredient in the mix sets the price.
Hastily introduced reforms introduced caps and empowered governments to intervene with support for consumers, but did not change the fundamental structure of the system, and the draft text suggests there are no plans to revisit the market design.
Instead, the Commission wants to 'decouple retail electricity bills from high and volatile gas prices' in part by making it easier for firms to strike long-term power purchase agreements with renewable power operators, launching before the summer a collaboration with the European Investment Bank, which is to provide an as yet unspecified amount of financing.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
France 24
13 minutes ago
- France 24
Premier League 'under strain' despite record £6.3 bn revenues
The rise in income for England's 20 top-flight clubs was fuelled by commercial income surpassing £2 billion for the first time and a rise in matchday revenue beyond £900 million. English clubs continue to enjoy a huge financial advantage over their European rivals. Spain's La Liga, the second highest revenue-generating league, earned just over half that amount at 3.8 billion euros, almost 50 percent of which came from Real Madrid and Barcelona. However, fan protests have become a common sight at Premier League stadiums over rising ticket prices and the squeezing out of local supporters to make way for more tourists willing to spend more for a special matchday experience. "There can be no doubt that the system in English football is under strain," said Tim Bridge, the lead partner in the Deloitte Sports Business Group. "Repeated reports of fan unrest at ticket price and accessibility demonstrate the challenge in the modern era of balancing commercial growth with the historic essence of a football club's role and position in society: as a community asset." There is also uncertainty over the implications of an incoming independent regulator for England's top five leagues. And for the past two seasons, all three promoted clubs from the Championship have been immediately relegated back to the second tier. "The financial implications of the 'yo-yo effect' on clubs, their spending, and overall competitiveness are major factors to address in order to continue attracting high levels of investment across the system," added Bridge in Deloitte's Annual Review of Football Finance. Total revenue of European clubs rose by eight percent in the 2023/24 campaign to 38 billion euros, boosted by increased commercial revenue and stadium developments. The women's game also continues to grow commercially, particularly in England's Women's Super League (WSL). Collective revenues in the WSL rose 34 percent to £65 million in 2023/24 and are projected to reach £100 million in the upcoming season.
France 24
2 hours ago
- France 24
Italy forges on with world's largest suspension bridge
The 13.5-billion-euro ($15.3-billion) project would carry trains and six lanes of traffic, allowing cars to cross the Strait of Messina in 15 minutes. Giorgia Meloni's hard-right government hopes to boost the economy of the impoverished region, although critics say there are better ways to do this -- and many believe that after decades of false starts, the bridge will never actually happen. The choppy waters between the eastern tip of Sicily and the western edge of the region of Calabria are legendary as the place where monsters Scylla and Charybdis terrified sailors in Homer's epic poem "The Odyssey". These days the challenges are more prosaic, from winds of more than 100 kilometres an hour (62 mph) to the real risk of earthquakes in a region that lies across two tectonic plates. The government says the bridge will be at the cutting edge of engineering, with the section suspended between its two pillars stretching 3.3 kilometres, the longest in the world. But critics point to a long history of public works announced, financed and never completed in Italy, whether due to corruption or political instability, resulting in enormous losses for taxpayers. "The public does not trust this political class and these projects that become endless construction sites," said Luigi Storniolo, a member of protest group No Ponte (No Bridge). Infrastructure Minister and Deputy Prime Minister Matteo Salvini, one of the main champions of the project, insists it will be a game-changer for the local economy. "The bridge will be a catalyst for development," he said on a recent visit to Reggio di Calabria, the city where the bridge will begin. 'A senseless project' The government hopes to boost trade in Sicily, which currently suffers from an "insularity cost" of around 6.5 billion euros a year, according to regional authorities. Meloni's ministers are expected to give their final approval to the project -- which Rome will fund -- later this month, and Salvini insists construction will begin this summer. But work had already been announced for the summer of 2024, before being postponed -- a common theme in the history of the bridge, the idea of which dates back to the unification of Italy at the end of the 19th century. The first law for the project was passed in 1971. Since then, successive governments have either revived it or cancelled it. In 2012, the idea appeared to be definitely abandoned amid the eurozone debt crisis, only for Meloni's government, which took office in 2022, to return to it once again. Salvini has repeatedly stated that the bridge would create 120,000 jobs in Calabria and Sicily, which have the fourth and the 13th highest unemployment rates respectively in the EU for young people under 29. However, the left-wing CGIL trade union estimates around 2,300 workers a year will be hired during the project, and critics say the jobs created will be offset by long-term losses from the closure of ferries. Mafia risk The project has sparked local protests, with critics warning of the impact on a protected marine zone and an important bird migratory route. Storniolo told AFP it was a "senseless project" which used up valuable funds when "our regions already suffer from many problems... healthcare, schools, and infrastructure." The Italian Court of Auditors has also criticised the extent of the debt-laden Italian state's investment in this one project in its assessment of the 2024 budget. "They want to make an entire territory believe that its only hope is this bridge -- but then the bridge never arrives," protester Storniolo added. There is also the question of mafia infiltration. The attorney general of Messina recently warned of the risk that organised crime would benefit from the project, noting that "the power of the mafia is hidden... behind public contracts". The government has proposed placing companies relating to the project under control of an anti-mafia structure reporting to the interior ministry. But Italian President Sergio Mattarella blocked this, saying it should only be used for one-off events such as earthquakes or the Olympics. Salvini argued that the bridge can help tackle the mafia, saying: "You do not fight the mafia... with conferences and protests, but by creating jobs and giving hope to young people."
Fashion Network
5 hours ago
- Fashion Network
French Senate approves ‘anti-fast-fashion' bill chiefly targeting Shein, Temu
Louwagie said that the government will notify the European Commission of this bill even before the end of the joint parliamentary committee work that will start soon, and that the government will also work on the decrees regulating the bill's application, and notably define the thresholds that will formally identify an operator as 'ultra-express' or 'ultra-fast-fashion'. Before the vote, the representatives of the various Senate groups spoke to explain their positions on the vote. An opportunity to underline for some the positive amendments made to the bill, and its weaknesses for others. Many senators welcomed the removal of a provision of the 2022 anti-waste law on unsold goods, which allowed ultra-fast-fashion operators to benefit from tax allowances when donating unsold goods to charitable associations. The re-introduction of a blanket ban on advertising for ultra-express fashion operators was also appreciated. 'This law does not prohibit, it protects by defining what is abnormal. It protects our environment and that of our children. It protects the economy and our textile industry. We can be happy we are giving ourselves the means to achieve our goals,' said Nicole Bonnefoy, representing the Socialist, Ecologist and Republican group, adding that 'we welcome the re-introduction of article three, which will form a negotiation basis for requesting an amendment to the European e-commerce directive, so that these restrictive measures can be made to apply to companies based for example in Ireland.' Although the amendments have been approved by the groups, several points still prompted strong reservations. The introduction of the term 'ultra-express fashion' has led to much teeth-gnashing among environmental associations and sustainable fashion brands, which believe that the aim of fencing in all types of fast-fashion practices is no longer being pursued. Jacques Fernique of Ecologist group Solidarité et territoires insisted on this aspect, emphasising that the various laws will not enter into force for many months yet, since they have to be examined again by the European Commission and the joint parliamentary committee, something which won't happen before the autumn. 'Today's vote is a relatively positive step. Shein, Temu and Amazon are pushing to the extreme a business model that destroys local jobs and our city centres' appeal. But both ultra-express fast fashion and fast fashion adopt the same approach, selling transient, low-cost disposable products. This bill is targeting the ultra-fast fashion explosion, but we can't see why the penalties shouldn't potentially apply to everyone.' Fernique is campaigning for provisions that would 'push back against the kind of disposable fashion sold by foreign platforms but also by French and European companies. It's sustainable fashion that we ought to promote, regardless of the nationality of who sells it.' An issue which the majority of senators did not endorse. 'This bill has set a course. It doesn't pretend to solve everything, but it intends to draw boundaries,' said Valente Le Hir, who is affiliated with the Republican group and is the bill's rapporteur in the Senate. She has advocated for the middle ground in various issues, asserting that the Senate wants to draw up a 'stronger bill, not a travesty of it. We have said it's time to limit the excesses of express fashion without penalising those who are working towards greater sustainability in the industry. [The bill] has distinguished, within a poorly understood sector, what constitutes planned overconsumption and what constitutes sustainable innovation. We've clarified the target. We've drawn a clear line between what we want to regulate, ultra-express fast fashion as embodied by platforms like Shein and Temu, and what we want to preserve, in other words affordable, locally rooted fashion that generates jobs in France, that anchors our communities, creates connections and boosts local industry.' After the government will have sent the text over to the European Commission, the latter will have three to four months to comment. And while French MPs and senators will be working within the joint parliamentary committee, the Commission's analysis and observations will play a key role in the bill's final wording and provisions. In the meantime, the lobbying efforts that have been ongoing for months are set to continue.
