Revision of the Energy Taxation Directive: Fit for 55 package

The revision of the Energy Taxation Directive (ETD) is part of the 'fit for 55' package. The current ETD (Directive 2003/96/EC) is outdated and out of sync with the EU's climate and energy objectives. It favours the use of fossil fuels and no longer contributes to the proper functioning of the internal market. The aspects of energy taxation requiring most urgent revision are the level and structure of minimum rates, replacement of the volume-based approach to energy taxation with one based on energy content and environmental performance, and the introduction of an indexation mechanism. The effectiveness of the current directive is further limited by outdated coverage of energy products, specifically biofuels, and a series of tax differentiations, reductions and exemptions. In July 2021, the Commission presented a proposal for the revision of the Energy Taxation Directive. Its objective is to align the taxation of energy products with EU energy and climate policies by promoting clean technologies, removing outdated exemptions and reducing rates that de facto encourage the use of fossil fuels. The ETD revision is a consultation procedure. It requires unanimity in Council, after consulting the European Parliament and the European Economic and Social Committee. Parliament has assigned the file to the Committee on Economic and Monetary Affairs, which appointed a rapporteur in September 2021. The ITRE committee is associated with the procedure under Rule 57. First edition. 'EU Legislation in Progress' briefings are updated at key stages throughout the legislative procedure.