European Parliament votes to remove tax barriers for shore-side electricity for ships

The transport committee of the European Parliament has voted to remove tax barriers for the uptake of shore-side electricity (OPS) in ports for ships at berth. The Ertug report on the deployment of infrastructure for alternative fuels in the EU, which was voted on by the transport committee, said that taxation has had a major impact on the price competitiveness of alternative fuels, and underlined that disparities in energy taxation for shore-side supply for ships should be addressed. Currently, electricity produced from marine fuel on board ships is tax-exempt. However, when ships at berth are plugged into a shore-side electricity system, they have to pay taxes applied to electricity. According to the European Sea Ports Organisation (ESPO), this taxation has proved a significant barrier to the uptake of shore-side electricity for ships, often being cited as the reason why it does not make a strong business case. Under the Energy Taxation Directive, Sweden, Germany and Denmark have been provided with a permit to temporarily apply a reduced rate of taxation to shore-side electricity for ships. However, ESPO believes that a permanent and EU-wide tax exemption for the use of shore-side electricity would put OPS on an equal footing with the electricity generated from tax-exempted marine fuel on board ships. “Ports in Europe are investing a lot in OPS infrastructure,” said ESPO’s secretary general, Isabelle Ryckbost. “But the tax barriers, which make it more expensive for ships to plug in, have resulted in OPS installations that are often underused. A permanent tax exemption for shore-side electricity for ships at berth would remove a great disadvantage of using electricity and would enhance its uptake, allowing ports and their surrounding communities to reap the environmental benefits of these costly investments.”