Proposal for new minimum tax on fuels

The European Commission proposes a minimum tax rate for CO2 on transport and heating fuels from 2013 and minimum rates for energy based on the energy content of a fuel rather than on its volume as is the case for most motor fuels now. This means fuels would also be taxed according to the amount energy they produce, driving higher efficiencies. One of the proposal's main objectives is to make energy taxation fairer by introducing a carbon element reflecting the true environmental impact of various types of fuels. For example, diesel is less taxed than petrol even though it has a higher energy and CO2 content. The commission is likely to face hefty opposition when it puts the proposal to ministers later this year.

Source:  European Commission and Transport & Environment, 13 April 2011

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