EU widens energy taxation

All energy products in the European Union (EU)—including coal, natural gas, and electricity—will be subject to a uniform minimum tax starting in January 2004, according to a directive set by EU’s environment ministers in October. Previously, minimum taxes were set only for mineral oils. Member states will levy taxes above the minimum set by the EU; the intention is to reduce tax disparities among different countries and fuels. The tax is also expected to increase the incentive to use energy more efficiently, and it will allow member states to offer tax incentives to companies in return for undertaking specific measures, such as new technologies to reduce emissions. States will tax energy products when they are used as fuel or for heating but not when they are used as raw materials or in chemical, electrolytic, or metallurgical processes. Energy products used in international air transport and maritime transport within EU waters are exempt. For more information, go to http://europa.eu.int/comm/taxation_customs/whatsnew.htm.