ESPO, FEPORT: EU-wide tax exemption for onshore power supply is necessary

The European Sea Ports Organisation (ESPO) and the Federation of European Private Port Companies and Terminals (FEPORT) are calling for an EU-wide mandatory tax exemption for onshore power supply (OPS) in the compromise text on the revised Energy Taxation Directive (ETD).

The two organizations said they fully support the ambition of the European Green Deal. For both ESPO and FEPORT, it is important that a reviewed energy taxation policy is based on the ‘polluter pays principle’, effectively reduces shipping and port emissions, and helps accelerate the energy transition of the shipping sector.

Considering the Commission proposal and the compromise text on the table in the Council, ESPO and FEPORT fear that the new directive is not delivering on boosting the use of onshore power supply 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 5,000 gross tonnes must connect to OPS while at berth for at least two hours and TEN-T core and comprehensive ports should therefore be equipped to provide it each year for at least 90% of the port calls.

“Now is time to walk the talk by developing policies that stimulate the use of OPS. 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 OPS, as soon as it is installed,” the organizations pointed out.

The ETD 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 OPS.

“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 ETD would ensure a level playing field between the different Member States, giving shipping lines a clear signal and making the use of OPS more competitive,” ESPO and FEPORT concluded.