Brussels, 29 January 1997
Environmental taxes and charges:
The Commission presents guidelines for their efficient use in the single market.
The European Commission today adopted a Communication on environmental taxes and charges in the single market Document COM(97) 9.
. With an increasing use of such instruments in Member States, environmental policy can be expected to become more efficient. However, there is also a fear that the instruments are not always used in a way compatible with EU legislation. This concerns particularly rules related to the single market. The document adopted today explains the legal framework applicable to Member States and clarifies both the possibilities and constraints for Member States to act in this field. It shows that there is considerable room for action by the Member States to use fiscal instruments that respects the obligations of the Treaty of the European Union. The Communication can thus serve as guidelines for Member States active in this field. The document mainly deals with product taxation, as this is the area most sensitive to internal market aspects.
The Communication was adopted on the initiative of Commissioners Ritt BJERREGAARD, responsible for the Environment, and Mario MONTI, responsible for Internal market and Taxation. With today's Communication, the Commission wishes to facilitate and ensure that Member States use environmental taxes and charges in a way compatible with European legislation. These levies are increasingly used in the Member States as a step towards implementing the "polluter pays" principle, by including the environmental costs in the price of goods or services. This approach is in line with the Community Fifth Environmental Action Programme.
The Communication describes which Articles of the Treaty can apply in this field. It also explains the effects of these articles on the use of levies, including:
· if a levy has a clearly positive environmental effect, it may be judged in a more positive way in terms of its effect on other policy areas.
· levies may not be used to discriminate against products from other Member States.
· levies should be in accordance with Secondary legislation on indirect taxation, e.g. in the field of energy taxation, where detailed rules exist.
· exemptions from paying the levy, and the way revenues from environmental levies are used, should fulfill rules in the field of state aid.
The document specifies when Member States have to inform the Commission of their activities, the so called notification rules. Such rules exist in the following areas:
· state aid.
· technical standards and regulations linked to fiscal measures (Directive 83/189/EC).
· national measures taken to transpose Community Directives into national law.
As this is a rapidly evolving area, the Commission will closely follow the evolution of the use of environmental taxes and charges in Member States and their impact on the single market and on environmental policy. Therefore it will systematically collect experience from Member States on their use of these instruments. The Commission also plans to carry out an evaluation on the economic and environmental effects of their use. The results of this work will be used to draw policy conclusions on the further use of environmental levies on Community and Member State levels.
Upon the adoption of the Communication, Environment Commissioner Ritt BJERREGAARD says: "We have now clarified for Member States that environmental taxes and charges can be in accordance with Community legislation, and thus fully compatible with the single market. I welcome an increased use of fiscal instruments in Member States, respecting Community legislation, since this can make environmental policy more efficient. The document shows that there is considerable room for action for Member States to increase their activities in this field".
Single Market and Taxation Commissioner Mario MONTI, says: "Fiscal instruments can provide a cost effective solution to environmental problems. However, the rules of the internal market and other Community legislation must be respected. This Communication will contribute to ensuring a balanced and efficient use of environmental taxes and levies by Member State authorities at both national and regional level. On the basis of the transparent guidelines laid down in the Communication, the Commission will assess the various systems that Member States might introduce in the future."