Exploring the Impact of EU Law on Energy and Environmental Taxation

Alice Pirlot, "Exploring the Impact of EU Law on Energy and Environmental Taxation", in: C. HJI Panayi, W. Haslehner, E. Traversa (Eds.), Research Handbook in European Union Taxation Law (2020) Cheltenham, UK

27 Pages Posted: 31 Oct 2019 Last revised: 10 Nov 2019

See all articles by Alice Pirlot

Alice Pirlot

University of Oxford - Said Business School; Catholic University of Louvain (UCL)

Date Written: October 22, 2019

Abstract

This chapter shows that EU law has shaped – and continues to shape – the development of environmental tax measures at both EU and Member State level. Firstly, at the EU level, the EU’s institutional framework has actually inhibited the harmonisation of environmentally-driven taxes. An analysis of the historical development of EU provisions surrounding energy taxation illustrates this point (sections 2.1. & 2.2). So far, the energy taxation directive remains largely disconnected from the EU’s climate policy, including the EU Emissions Trading Scheme (section 2.3). Secondly, EU substantive law has had an ambiguous impact on Member States’ environmental tax policy (section 3). On the one hand, EU substantive law has been interpreted by the EU Court of Justice in a way that encourages Member States to adopt environmental tax measures that are environmentally-driven and structured accordingly. Indeed, the environmental purpose of Member States’ tax measures seems to play a positive role in the assessment of their compatibility with EU law, including State aid provisions (section 3.1), the fundamental freedoms (section 3.2) and the energy taxation directive (section 3.3). On the other hand, in some instances, EU law strictly limits Member States’ ability to adopt environmentally-driven tax measures. Moreover, EU secondary law disregards the purpose of environmental taxes in order to classify them for statistical purposes (section 3.4).

The broad picture that emerges from the analysis of existing legislation, case-law and literature highlights that institutional and substantive EU law has shaped the use of environmental tax measures in a way that does not ensure the alignment of these taxes with the EU’s and Member States’ environmental and climate ambitions. Therefore, the last section of this chapter suggests new areas of research, which could improve the consistency of environmental tax policy at both EU and Member State levels (section 4).

Keywords: EU environmental tax law; EU green taxes; carbon taxes; energy taxes; environmental taxes

Suggested Citation

Pirlot, Alice, Exploring the Impact of EU Law on Energy and Environmental Taxation (October 22, 2019). Alice Pirlot, "Exploring the Impact of EU Law on Energy and Environmental Taxation", in: C. HJI Panayi, W. Haslehner, E. Traversa (Eds.), Research Handbook in European Union Taxation Law (2020) Cheltenham, UK. Available at SSRN: https://ssrn.com/abstract=3473726

Alice Pirlot (Contact Author)

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

Catholic University of Louvain (UCL) ( email )

Place Montesquieu, 3
Louvain-la-Neuve, 1348
Belgium

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