EU Stakeholders Call for Tax Exception on Shore Power

The European Sea Ports Organization (ESPO) and The Federation of European Private Port Companies and Terminals (FEPORT) has called for an EU wide mandatory tax exemption for shore power in the EU’s revised Energy Taxation Directive.

The groups say they fully support the European Green Deal ambition and the polluter pays principle.

However, considering the European Commission’s proposal and the compromise text on the table in the European Council, they fear that the new Energy Taxation Directive is not delivering on boosting the use of shore power which is identified as a major priority in the new Alternative Fuels Infrastructure Regulation (AFIR).

According to AFIR, by 2030, container and passenger ships above 5000 gross tonnes must connect to shore power while at berth for at least two hours. TEN-T core and comprehensive ports should therefore be equipped to provide it each year for at least 90% of the port calls.

ESPO and FEPORT say that agreeing on an EU wide exemption of taxation for electricity provided to ships at berth is an essential pillar of such policy and a crucial condition to encourage ships to use shore power as soon as it is installed.

The Energy Taxation Directive Commission proposal from 2021 gives Member States the option to give a total or partial tax exemption to electricity directly supplied to vessels berthed in ports. Currently, Member States have to ask the Commission to apply such an exemption and if authorization is given it counts for six years.

Even if the Commission proposal is making a modest step in the good direction by eliminating this burdensome procedure for the Member States, it is a missed opportunity not to turn the option into an EU wide mandatory and permanent exemption for shore power, says ESPO and FEPORT.

“We therefore call for a mandatory and permanent EU wide tax exemption for onshore power supply which would help deliver the priorities set in AFIR. By applying the tax exemption on the EU level, the Energy Taxation Directive would ensure a level playing field between the different Member States, giving shipping lines a clear signal and making the use of shore power more competitive.”