CO2 tax exemptions probe spreads to Sweden

Commission launches formal investigation;  Norway and Liechtenstein warned over buildings directive

The European commission is to investigate Swedish plans to grant carbon dioxide (CO2) tax exemptions to companies covered by the EU emission trading scheme, marking the first step towards a possible legal challenge.

Sweden argues that granting full or partial exemptions will avoid double regulation.   The commission warned on Tuesday that it might breach minimum tax rates in the EU’s 2003 energy tax directive and run counter to the polluter pays principle.  It launched a similar investigation into proposed Danish tax exemptions in late September (EED 02/10/06).

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