May 2020 / Policy Papers - Responses to Public Consultations

Future EU Strategy for Smart Sector Integration

EASE submitted a response to the European Commission Public Consultation on Future EU Strategy for Smart Sector Integration. EASE believes energy storage is a key instrument enabling a smart sector integration. In order to meet the climate objectives, while also guaranteeing secure and affordable energy for consumers, it is paramount to link up the energy system with other sectors and exploit the synergies enabled through an integrated energy system.

November 2020 / Policy Papers - Responses to Public Consultations

Conclusions on EASE Reply to the European Commission Public Consultation on the Revision of the Energy Taxation Directive.

EASE, as the voice of energy storage sector, welcomes the revision of the Energy Taxation Directive and sees, in addition to the barriers of double taxation the following as the main recommendations relevant for energy storage for the review of ETD, many of which were also raised in the European Commission study on energy storage:

  • Update minimum tax rates for energy products considering technology neutrality. Energy taxation should in general be technology neutral, stimulate processes that increase overall efficiency, and internalise the externalities of the different technologies. The latter refers especially to negative environmental externalities such as emissions of greenhouse gases and local pollutants, when not internalised through other mechanisms such as the Emissions Trading Scheme.
  • End-use and intermediate processes. A distinction needs to be made between on the one hand energy use for intermediate processes, for example storage and conversion technologies such as power-to-gas or gas-to-power, and on the other hand energy end-use. Energy taxation should only apply to end-use of energy products, as is the stated objective of the current ETD.
  • Energy losses. Energy losses in the storage cycle could be subject to energy taxation if considered end-use. However, the current ETD states in art. 21(3) that energy consumption in an establishment producing energy products does not give rise to a chargeable event (e.g. electricity consumption in power plants). Following this and to treat storage equally vis-à-vis other energy producers, losses in the storage cycle should not be subject to energy taxation either.
  • Update of energy products. The use in the ETD of static references to Common Nomenclature codes and the lack of reference to products not significant at the time of the approval of the ETD leads to an outdated harmonised scope for certain energy products, such as hydrogen, produced from carbon neutral energy sources. Energy products scope should be updated to include products supporting cross-sectoral integration, such as power-to-gas. In the process of revision of the energy products EASE would like to emphasise that hydrogen should be classified with reference to its carbon footprint and the nature of the electricity used for its productio For further information please find EASE recommendations on the classification and definition of the renewable and low-carbon gases;
  • Define taxation levels based on the energy and GHG content. The ETD does not treat energy products equally, as taxes are not required to be based on the carbon content, nor energy content in the case of fuels. Defining minimum taxation levels based on energy and carbon content is a central step in providing an equal playing field for all energy products;
  • Clarify whether the conditional exclusion of electricity from the ETD scope applies to hydrogen electrolysis. The ETD scope does not cover electricity, when it accounts for more than 50 % of the cost of a product (considering purchased goods, personnel and fixed capital costs). This could be the case of hydrogen produced from electrolysis but would also depend on electricity prices and electrolyser costs. The threshold could provide perverse incentives to increase the cost share of purchased electricity;
  • Consider including smart sector integration, including electricity heat and cold, in the scope of the ETD. There is a need to introduce additional multi-sectorial elements in the ETD to further support energy efficiency and decarbonisation goals. Heat or cold networks are not significantly integrated at the moment. However, competition between alternative energy carriers for heating, increased sector coupling and integration of heat networks could require minimum harmonization of taxation for heat and other energy carriers (considering energy and GHG content). This includes any potential exemptions for all energy carriers. For example, Liquid Air Energy Storage could provide a means to support electricity and cooling networks, providing an alternative to solutions relying on refrigerant gases with high GWP.

Please read the article summarising the main points of EASE reply to the European Commission public consultation or the EASE reply itself, accessible below.

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May 2020 / Policy Papers - Responses to Public Consultations

Future EU Strategy for Smart Sector Integration

EASE submitted a response to the European Commission Public Consultation on Future EU Strategy for Smart Sector Integration. EASE believes energy storage is a key instrument enabling a smart sector integration. In order to meet the climate objectives, while also guaranteeing secure and affordable energy for consumers, it is paramount to link up the energy system with other sectors and exploit the synergies enabled through an integrated energy system.

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