1. TAX GOES GREEN
The EU aims to reach carbon-neutrality and promote a sustainable lifestyle. Taxation is one of the most effective ways of incentivising changes. The European Commission has already considered a potential change in 2020 of the Energy Tax Directive. This would mean minimum tax rates on energy products and electricity, the promotion of renewable energy use and an increased energy efficiency. New taxes on aviation and marine transport fuel may also see the light of day. One of the most controversial ideas is getting more traction; a Carbon Border Tax on the import of goods, and potentially on services as well, from countries that have not meaningfully reduced their carbon emissions. This proposal could be seen by some as a tariff while others argue it is a needed measure to protect European businesses from environmental dumping.
Potential impact? The changes to green taxation will directly affect energy producers as well as the broader economy by impacting compliance costs and changing power dynamics among market operators. While developing these changes, legislators face difficulties in anticipating and addressing the potential negative impacts.