EU Proposes Tax Shift From Gas to Electricity

The European Union is preparing changes to energy taxes and network charges aimed at reducing household electricity bills. According to a European Commission proposal seen by Reuters, member states would apply lower tax rates to electricity than to natural gas.

The measure forms part of the EU's efforts to address pressure on energy markets following the conflict with Iran. Higher oil and gas prices have increased costs for consumers, reflecting the bloc's continued reliance on imported fossil fuels.

By lowering taxes on electricity, the Commission hopes to accelerate the transition away from fossil fuels in transport, industry and heating. The proposal is also designed to encourage the adoption of technologies such as electric vehicles and heat pumps.

In addition, the plan includes incentives for consumers to shift electricity use to periods when power prices are lower.

The Commission wants at least 50% of electricity consumers to have smart meters by 2030. Network charges currently account for around one-quarter of the average household electricity bill across the European Union.

The proposed changes must be approved by the European Parliament and a reinforced majority of member states. However, several countries argue that changes to energy taxation should require unanimous approval.

(reuters, bak)