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Brussels, 13 March 2007

Excise duties on gas oil: The European Commission proposes to fight "tank tourism" and reduce environmental damage

(see MEMO/07/99)

The proposal is based on the fact that existing tax differentials on diesel used by trucks ("commercial gas oil") create distortions of competition within the liberalised Internal Market of the haulage sector. In addition, they lead to "fuel tourism", where truck drivers alter their routes in order to benefit from low tax rates applied in certain Member States, thereby having a negative impact on the environment. In consequence, the Commission’s proposal aims at narrowing these differentials while reducing environmental damages.

"I am firmly convinced that European haulage markets, now fully opened to competition can no longer afford the excessive differentials in excise duties applied to gas oil used by trucks by the Member States. These create significant distortions of competition among companies competing on the same markets and threatens jobs." said László Kovács, the Commissioner responsible for Taxation and Customs Union. "At the same time, it is important that any proposal concerning road transport contributes to reducing its greenhouse gas emissions, since this sector alone represents 19.3% of the CO2 emissions in EU-25. I am therefore also very satisfied that this proposal would help the environment by reducing notably the unnecessary kilometres driven by truck drivers just to benefit from low taxes on gas oil."

The proposal for a Council Directive aims at reducing the distortions of competition in the haulage market caused by excessive differentials in excise duties applied on fuel used for commercial purposes by the haulage sector.

It will also provide better environmental protection by reducing the phenomenon of 'fuel tourism' in the haulage sector and foster a decrease in motor fuel consumption in Europe.

Why make such a proposal?

Excise duties on fuel represent up to 18% of the running costs of a road haulage business. At present, in a liberalised market where competition is stiff, differences in operating costs resulting from national taxes have a large impact.

Indeed, big trucks currently cover between 1500 and 3000 kilometres on a single tank. That means that hauliers involved in international activities or located at or near the border of a low tax country can take advantage of the very significant differences in national excise duties on gas oil fuel by filling up in Member States with the lowest taxes. This has lead to significant distortions of competition in the haulage sector.

This fiscal planning also impacts on the environment: studies have shown that millions of extra kilometres were driven by hauliers in order to benefit from lower taxation. Furthermore, it impacts negatively on the budget of countries applying a relatively high excise duty on gas oil.

For these reasons the Commission proposes to narrow the tax differentials existing on gas oil used for commercial purposes by the haulage sector by offering more flexibility to Member States to differentiate between commercial and non-commercial gas oil rates. All Member States will now be able to lower the taxation of commercial diesel below their respective national level of taxation on 1 January 2003, provided the minima are respected and provided the fiscal burden remains the same, through the introduction of road charges.

In addition, the proposal will increase in two steps the minimum rate of excise duties from 302 to 380 € per 1000 l in 2014 (intermediate step at 359 €), which will reduce the distortions of competition and environmental damages.

Finally, it provides that in any given Member State, the rates for non-commercial diesel and for unleaded petrol cannot be less than that applied to commercial diesel. If these other fuels remain at a lower level than commercial gas oil, they would be treated more favourably than commercial diesel, whereas there is no valid reason (be it environmental or economic) to justify such favourable treatment.


The White Paper on "European transport policy for 2010: time to decide" (IP/01/1263) mentioned that, with the road transport sector now fully opened up to competition, the absence of harmonised fuel taxes seemed increasingly to be an obstacle to the smooth functioning of the internal market.

An initial proposal relating to the taxation of gas oil used for commercial purposes was presented in 2002. This proposal was withdrawn in 2005 after the Commission announced its intention to propose legislative intervention based on the results of a comprehensive impact assessment.

In its recent Communication "Keep Europe moving – Sustainable Mobility for our continent" (IP/06/818), the Commission said that it "will examine how excessive differences in fuel tax levels can be narrowed". It also underlined that "international environmental commitments, including those under the Kyoto Protocol, must be integrated into transport policy".

The Communication of the Commission "Action Plan for Energy Efficiency: Realising the Potential" (IP/06/1434) confirmed the intention of the Commission to propose in 2007 special tax arrangements for commercial gas oil.

Existing EU rules on taxation of energy products are determined in the Energy Tax Directive (IP/03/1456) that was agreed in 2003.

Further information on the proposal can be found at:

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