Taxation measures were used in the several Member States in the period from 2014 to 2020 and will be used in the upcoming period from 2021 to 2030 since the Member States indicated in their National Energy and Climate Plans (NECPs) the use of the taxation measures for the new period.
The type of policy measures in most cases of Member States is taxation on electricity, natural gas and oil products, fuels for transport and space heating, or on other specific energy products.
Taxation measures are effective in the sense that they can generate a high share of cumulative energy savings. However, implementing taxation measures requires a high degree of knowledge on how to calculate the energy savings in an appropriate way, and also the impact on the overall energy efficiency target.
What was identified is that from a country perspective, taxation measures appear to be an effective tool to cover an energy savings gap within a short time. Some Member States notified taxation measures in the middle of the obligation period 2014 to 2020, in addition to existing policy measures implemented through Article 7.
In order to generate real energy savings impacts, taxation measures should be designed carefully and aim at structural effects and facilitate the market transformation. Taxation can therefore be used in parallel and complete other alternative measures where the taxation measure can enhance the effectiveness of other measures. More specifically, the signal on the price increase of energy sources can further stimulate the adoption and purchase of energy efficiency measures/products.
The Commission is carrying out the revision of the EED as announced in the European Green Deal (the EC committed to review and revise if necessary, the Energy Efficiency Directive and also other Directives like the Renewable Energy Directive by June 2021). The starting point for the assessment is the target of at least 55% of CO2 reduction by 2030. This will require increased efforts also in energy efficiency. In this process, there was no special intention to revise the energy savings application, also Article 7, as it has already been subject to amendments within the framework of the Clean Energy Package in 2018.*
Experience exchange between Member States on taxation
Reporting energy savings from energy taxes and CO2 pricing for the Energy Efficiency Directive (EED) – experiences, challenges and
methodological aspects – Meeting presentations
- Introduction to ENSMOV, IEECP (Vlasios Oikonomou)
- Closing the loopholes – Assessment of the impact of tax measures on energy savings claimed under Article 7 of the EED, Vlasios Oikonomou (IEECP)
- Experiences from Sweden: Energy savings from energy and CO2 taxes in the Swedish NECP: experiences with quantification, challenges and methodological aspects (e.g. price elasticities used, additionality, materiality); Anna Lock, Yeasmin Sayeed (Swedish Energy Agency)
- Experiences from the Netherlands: Challenges in monitoring energy savings for compliance with Article 7 of the Energy Efficiency Directive, Martijn Verdonk, Dutch Enterprise Agency (RVO)
- Experiences from Lithuania: Energy savings from energy and CO2 taxes, Tadas Norvydas (LEA)
- Experiences from Finland: Energy savings from taxation measures under the Art 7 EED, Lea Gynther, Ulla Suomi (MOTIVA)
- Experiences from Germany: Energy savings from energy and CO2 taxes in the German NECP: experiences with quantification, challenges and methodological aspects (e.g. price elasticities used, additionality, materiality), Karsten Weinert (Prognos)
*source: DG ENER information & own opinions