Germany expects tough negotiations on the introduction of new energy taxes in the European Union, a senior official said on Thursday (19 September), as the bloc considers higher prices for carbon emissions as a way to achieve its climate protection targets.
Over the last decade, EU countries have led a global shift towards renewable energy and set up the world’s largest emissions trading system to price carbon and reduce reliance on more polluting fuels. The bloc’s rules on energy taxation have not changed for more than 15 years, however.
Speaking at a panel discussion in Berlin, Deputy Finance Minister Joerg Kukies said recent talks in Helsinki about modernising the tax rules had revealed deep divisions among EU member states.
“The Polish finance minister announced an absolute veto against any additional taxation of coal,” Kukies said.
“The Maltese finance minister pointed out that the idea of higher taxes for flights would be against the interests of any island country such as his country.”
And the Cypriot finance minister threatened to block any attempts to introduce additional taxation on shipping, he said.
The energy transition will hit the poor hardest unless it’s balanced by a shift in taxation, says Christian Egenhofer. The EU needs to acknowledge this and get started by lowering taxes on electricity to achieve the EU’s carbon reduction goals at least cost, he argues.