Taxes Incentives to Promote Res Deployment: The Eu-27 Case

Abstract

The share of renewable energy source (RES) in gross final energy consumption was 10.3% in the European Union (EU-27) in 2008; the remaining 89.7% was covered through the use of conventional fuels such as natural gas or oil products (Eurostat, 2010). The renewable energy share in gross final energy consumption was used for the production of heat (5.5%), electricity (4%) and transport fuels (0.8%). Deployment of RES contributes to two of the four targets of the EU-27 energy strategy: the need to reduce primary energy dependency and the stress of demand on primary energy resources. In addition, the Green House Gas (GHG) abatement due to a more intensive use of RES contributes to improve the EU-27’s target related to climate change, this being the fourth target in its energy strategy. From a legal point of view, The Green Paper (EC 1996), which was the first attempt of establishing a common policy on renewable energies in the European Union, settled down the goal of duplicating the contribution of RES in the gross domestic consumption in 15 years. From the year 1996 until the present, the European Union has developed an intense ruling activity around the promotion of RES. An important step forward the construction of the Community framework about harmonized fiscal treatment was the passing of the Directive (EC, 2003/96), that restructures the community regime about taxation over energy products and electricity. In order to improve on energy efficiency, the most important EU policies for the households sector are the EPBD (EPC 2. Gross final consumption of energy from renewable sources for heating and cooling (H & C); and 3. Final consumption of energy from renewable sources in transport. IEA (2009) has recently pointed out that part of renewable energies growth is due to strong policy support. Therefore, policy measures to promote RES are becoming an interesting issue in its deployment.