Energy Taxation Directive to Support EU Decarbonisation Targets

The European Commission has adopted a recast Energy Taxation Directive in the context of the Fit for 55 Package, in order to ensure that tax rates for energy products can support decarbonisation targets.

As demonstrated by the EU decarbonisation strategy for 2050, energy storage technologies are playing a valuable role in the transition to a low-carbon energy system. This role is only set to increase with upward revision of the 2030 decarbonisation targets. In order to enable the deployment of energy storage the barriers that hamper a robust storage business case should be avoided.

EASE welcomes the recast Energy Taxation Directive, which goes in the right direction by making it possible to consider energy storage facilities as redistributors so to avoid double taxation, but more ambitious steps are needed, such as basing minimum tax rates on carbon content of the energy product, setting enforceable rules to phase-out double taxation in all Member States, and ensuring system integration is incentivised through favourable rates.