EU: Proposals to reduce greenhouse gas emissions, energy tax measures

Proposals that would aim to reduce net greenhouse gas emissions in the EU by 55% by 2030

Proposals that would aim to reduce net greenhouse gas emissions in the EU by 55% by 2030

The European Commission today adopted a package of proposals that would aim to reduce net greenhouse gas emissions in the EU by 55% by 2030 (compared to 1990 levels).

With today's proposals, the EC is presenting the legislative measures that would target and transform the economy and society “for a fair, green and prosperous future.”

As explained in an EC release:

  • There would be a comprehensive and interconnected set of proposals that would combine application of emissions trading to new sectors and tighten the existing EU emissions trading system and lower the overall emissions cap, as well as other measures.
  • A combination of measures would also implement stricter CO2 emissions standards for cars and vans, with a goal of zero-emissions with the result that all new cars registered as of 2035 would be zero-emission. For aviation fuel suppliers, there would be increasing levels of sustainable aviation fuels in jet fuel taken on-board at EU airports.
  • A revision of the Energy Taxation Directive would align the taxation of energy products with EU energy and climate policies, by promoting clean technologies and removing outdated exemptions and reduced rates that currently encourage the use of fossil fuels. The new rules would aim at reducing the harmful effects of energy tax competition, helping secure revenues for EU Member States from “green taxes.”
  • A new carbon border adjustment mechanism would put a price on imports of a targeted selection of products to provide that “ambitious climate action in Europe” does not lead to “carbon leakage” and that the European emission reductions would contribute to a global emissions decline, instead of pushing carbon-intensive production outside Europe.

Read a set of questions and answers about the proposals.

Read a July 2021 report prepared by the KPMG EU Tax Centre

 

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