The European Commission is looking into a Europe-wide carbon tax on road fuel as it seeks to bring more carbon emitters into line with the EU’s climate change policy.
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The Times newspaper said a proposed tax on petrol, natural gas and diesel would hit consumers directly and was supported by the Nordic countries and by France, which has introduced a carbon tax on domestic fuel.
The UK is opposed to the tax, but the proposal is gaining support among other European countries.
A proposal, from European taxation commissioner Laszlo Kovacs, already has backing from Belgium’s backing as a means of shifting revenue collection from unpopular payroll taxes to consumption taxes on carbon.
The Times quoted a UK treasury spokesman as saying Britain had no plans to introduce a carbon tax and wpi;d almost certainly oppose it in Brussels, arguing that the commission had no mandate to legislate on matters of national taxation.
However, the UK’s main political concern is likely to be opposition from the haulage industry and from motorists.
A commission spokeswoman said a consumer tax was needed because the ETS, Europe’s carbon trading system, covered less than half of Europe’s CO2 emissions, adding that taxation was a responsibility for member states but that a common approach was needed “to avoid distortions within the internal market”.
She added that without agreement, the EU might need to introduce “a border compensation mechanism”.
The commission said the purpose of the tax would be to change behaviour, rather than to raise revenue.
The Times noted that like VAT, the EU’s carbon tax would be set at a minimum level with member states free to set higher levels. In a draft proposal, the Commission suggested EUR10 (GBP9) to EUR30 per tonne of CO2. The present market price for a tonne of CO2 on the ETS is between EUR11 and EUR12 (US$16 and $17.5).
