Green fuels to get boost from EU tax revamp -draft

Mon Mar 14, 2011 12:54pm GMT

* EU fuel taxes to be split into carbon, energy components

* Leaked draft shows carbon tax of 20 euros per tonne

* Petrol at 9.6 euros per gigajoule, diesel slowly aligned

By Pete Harrison

BRUSSELS, March 14 (Reuters) - The greenest fuels would become cheaper under an planned overhaul of European fuel taxes that would also narrow the price gap between petrol and diesel.

The European Union's executive wants to overhaul Europe's 240 billion euro ($334.4 billion) annual taxation of energy, which varies widely between countries and often creates paradoxical incentives that encourage the biggest polluters.

The EU's commissioners aim to debate the plan before the summer break. They had already discussed it last June and put in on hold while taxation commissioner Algirdas Semeta smoothed out a number of issues.

Over the next decade, the European Union plans to cut by a fifth its emissions of carbon dioxide, the gas most blamed for climate change.   Continued...

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