In April 2011, the European Commission came up with a proposal to revise the so called “Energy Taxation Directive”. This directive as a part of a green growth initiative aims to redefine the principles of the energy taxation with a special focus on their environmental impact. Whereas current rules favor traditional fuels like diesel over their “greener” competitors, new proposal supports energy taxes divided into two parts: the first specifically linked to CO2 emissions and the second based on the energy content of products. This could help alternative energy sources as bio fuels to compete on a larger scale with traditional energy sources.

The question of the revision of energy taxation policy has been discussed on this week’s plenary session of the EP.  However, the European Parliament as a consultative body has only limited competences in the process of consultation. The EP’s non-binding position recommends to the Council of Ministers not to adopt some specific features of the proposal. The EP does not recommend the adoption of the taxation rule that would phase out the advantage diesel fuel has in some countries of the EU (including the Czech Republic). According to the EP, this could lead to the price hike and harm further economic growth.

EP’s disapproval on the proposal is not binding for the Council, but the resolution adopted by the EP will be taken into account by it. Finally, the Council must meet a unanimous agreement on the proposal on its following meeting. Many EU Member States including Germany, the United Kingdom or Luxembourg oppose the plan, as did many MEPs in committee, so the plenary vote is likely to be close.