Considerations on COM(2024)18 - Authorisation of Sweden to apply a reduced rate of taxation to electricity directly provided to vessels at berth in a port

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dossier COM(2024)18 - Authorisation of Sweden to apply a reduced rate of taxation to electricity directly provided to vessels at berth in a port.
document COM(2024)18 EN
date February 26, 2024
 
table>(1)Council Implementing Decision 2020/1674/EU (2) authorised Sweden to apply a reduced rate of taxation to electricity directly provided to vessels, other than private pleasure craft, at berth in a port (‘shore-side electricity’) in accordance with Article 19 of Directive 2003/96/EC, until 31 December 2023.
(2)By letter dated 5 April 2023, Sweden sought authorisation to continue to apply a reduced rate of taxation to shore-side electricity pursuant to Article 19 of Directive 2003/96/EC, until 31 December 2027. The Swedish authorities provided additional information by letter dated 19 October 2023.

(3)By applying a reduced rate of taxation to shore-side electricity, Sweden aims to continue the promotion of the use of shore-side electricity. The use of such electricity allows the needs of vessels at berth in a port to be satisfied in a less environmentally harmful way than by their burning bunker fuels.

(4)In so far as the use of shore-side electricity helps to avoid emissions of air pollutants originating from the burning of bunker fuels, it contributes to an improvement to the local air quality in port cities, as well as to noise reduction. The measure is therefore expected to contribute to the environmental, health and climate policy objectives of the Union.

(5)Allowing Sweden to apply a reduced rate of taxation to shore-side electricity does not go beyond what is necessary to increase the use of such electricity, since on-board generation of electricity will remain the more competitive alternative in most cases. For the same reason, and because of the current relatively low degree of market penetration of the relevant technology, the application of that reduced rate of taxation is unlikely to lead to significant distortions in competition while it is in effect and would therefore not negatively affect the proper functioning of the internal market.

(6)In accordance with Article 19(2) of Directive 2003/96/EC, each authorisation granted under Article 19(1) of that Directive is to be limited in time. In order to ensure that the authorisation period is sufficiently long so as not to discourage relevant economic operators from making the necessary investments, it is appropriate to grant the authorisation until 31 December 2027. However, that authorisation should cease to apply from the date of application of any modified general rules on tax advantages for shore-side electricity adopted by the Council under Article 113 or any other relevant provision of the Treaty on the Functioning of the European Union, should such provisions become applicable prior to 31 December 2027.

(7)In order to provide legal certainty to port and ship operators and to avoid a potential increase in the administrative burden for the distributors and redistributors of electricity, it should be ensured that Sweden may continue to apply a reduced rate of taxation to shore-side electricity. The authorisation requested should therefore be granted with effect from 1 January 2024, in order to follow seamlessly on from the prior arrangements under Implementing Decision (EU) 2020/1674. By providing for application as from a date prior to entry into force of the special measure, the legitimate expectations of market operators and individuals are respected, as the special measure does not encroach upon their rights and obligations.

(8)This Decision is without prejudice to the application of Union rules regarding State aid,