Additives
The European Commission has adopted a decision on 20 April 2012 concerning the application of the control and movement provisions of Council Directive 2008/118/EC to certain additives, in accordance with Article 20(2) of Council Directive 2003/96/EC. Please click here for further information.
EMSC
On a similar but separate issue, some countries have called for the application of the EMCS system to base oils referring to possible tax fraud of mixing cheap base oils with fuel. The cost to implement the EMCS for the movement of base oils would be substantial and completely unwarranted as almost all lubricant manufacturers in the EU are currently not using EMCS at all for any of their products/raw materials. Especially as in the end there is no excise duty on any of the lubricant additives, the application of the EMCS to these lubricant additives would be completely out of proportion. At the moment UEIL is actively engaging with the European Commission and the EU Member States on this issue. UEIL has presented its views during a workshop the 6th of December 2011.
During the most recent Excise Committee in March 2012 Poland and Lithuania pleaded again for the application of the EMCS system to base oils. The only country that reacted was Ireland expressing its concern and mentioning there is no need to bring base oils and metal working fluids under EMCS (also referring to the additional administrative burden).
Follow up path
Next discussion in Council working group will take place in June. The European Commission will prepare a rapport for this next working group mentioning all the advantages/disadvantages of the Polish/Lithuanian proposal and possible alternatives and then it is up to the EU Member States to take a decision. If the EU Member States decide to include base oils and metal working fluids under EMCS, then the European Commission will come with a new decision the second half of the year and implementation of new legislation will be applicable from 2013.
However the chance that base oils and metal working fluids will be brought under EMCS control is rather limited, as certain Member States expressed already there negative views on the Polish/Lithuanian proposal and UEIL will actively lobby other EU Member States (specifically Germany, Belgium, The Netherlands, France, Spain, Sweden and Finland) to get a blocking minority (decision is taken by qualified majority). Furthermore in the European Commission’s report alternative solutions will probably be proposed like better classification or better regional cooperation.
The next expert meeting (Fiscalis) is foreseen for the 3rd of May 2012. UEIL is invited to attend and has already expressed its presence.
Energy tax directive
Concerning the main issue on the energy tax directive (directive does not propose any specific prohibition on taxation of lubricants outside of the Directive/it declares them out of scope, which leaves the freedom to many countries to impose a national tax on lubricants like Italy, Poland, Portugal and Denmark) there are not so many new developments. This topic will be on the agenda of next ECOFIN (Economic and Financial Affairs Council) in May or June 2012. After ECOFIN conclusions, there will be a more technical debate about equal treatment of taxes on oils and metal working fluids. However this discussion will only start the beginning of 2013. UEIL will engage with the EU Member States to push for an amended text on the basis of the old 1992 directive in the second half of the year. However decision will be taken by unanimity what makes chances for success more challenging.