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Climate Protection, Green Tax & Energy

The transition to a climate-neutral society is an urgent challenge where companies of all economic sectors, and society in general, play a vital role. The issues of climate protection and sustainability are being addressed in an increasingly global way, with the European Green Deal as a clear example.

At WTS Global we believe that an international and multidisciplinary approach is essential to offer the best services to our clients. For this reason, our team consists of experts from different countries, with a special focus in Europe. In addition, our advice in the field of climate protection and energy covers a wide range of issues, for which we have expert teams who are capable of accompanying the client throughout the whole process: from compliance to high-end tax and legal consulting. Alongside tax advisors, lawyers, economists and engineers also work in our team. Hence, we combine tax advice with comprehensive and holistic legal advice on regulatory, contractual and litigation matters. Together we have significant experience spanning more than twenty-five years in the field of excise taxes, especially “Green Taxes”, as well as in energy and climate protection law.

The aim of this WTS Global Mindset Hub is to bring together the expertise of our tax professionals around the world in the field of climate protection, electricity and energy taxation. Throughout our activities, our members share their knowledge and experiences, as well as combine their efforts to provide the best services to our international clients. Some of the main topics relevant to our group include electricity and energy regulation, digitalization and technical innovations such as e-mobility. We advise our clients according to their preferences on a comprehensive or project basis, and we also respond to individual inquiries. This includes strategic advice and advice on digital tax solutions in the key areas.

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In July 2020, the EU Member States agreed to introduce a levy on non-recycled plastic packaging waste as a new source of own resources to finance the EU budget as of 1 January 2021. This plastic levy is paid by the member states to the European Union and compensates partially for the COVID-19-related expenses.

The levy amounts to 0.80 euros per kilogramme of non-recycled plastic packaging waste. The decision does not lead to a new tax for producers, traders or consumers of plastics. However, in order to refinance the new plastic levy, the introduction of new sector-related levies for single-use plastics is already being discussed in various member states.

Some states have already drafted concrete legislative proposals for the introduction of a new plastic tax. Plans are particularly advanced in Italy, while Spain has recently published a new law which will introduce a plastic packaging tax as of 2023, and Great Britain's plastic packaging tax is already in place since April 1st, 2022. Other member states have announced that they do not want to introduce a new tax at all. In any case, in most countries there are only very vague plans, but an EU-wide harmonisation of plans is currently neither planned nor in sight.

If you want to learn more about this topic read our publication Plastic taxation in Europe.

Under the guiding principle of the European Green Deal, the EU wants to become the first climate-neutral continent by 2050. This requires comprehensive investments in measures to increase energy efficiency and reduce greenhouse gas emissions. The aim is an industrial transformation towards decarbonisation. Electrification, energy efficiency, electromobility and the use of renewable energy sources and hydrogen are topics of the future.

Just like technology, energy taxation is in a process of renewal. The revision of the Energy Tax Directive currently under discussion is intended to promote a sustainable structural change towards a green industry in Europe. Carbon leakage regulations on energy and electricity taxation should prevent production capacities from being relocated to countries with lower energy taxation and ensure a level playing field in Europe. The EU Commission's current plans also include a continuous increase in minimum tax rates and a change in the basis of assessment from volume to energy content. The requirements of the Energy Efficiency Directive and the discussed expansion of the European Emissions Trading Scheme (EU ETS) to include further sectors as well as a CO2 border adjustment mechanism for imported goods also give rise to discussion. Furthermore, we are closely monitoring new developments such as the introduction of meat taxes.

Global supply chains and international group restructuring also require cross-border excise advice. For this reason, we cooperate with local experts in almost every country in the world. This cooperation is based on strict quality criteria, long-standing partnerships and personal contacts. Our international partner firms are characterised by comprehensive excise know-how, a strong client orientation, practical relevance, implementation strength, team spirit and fast response times. Our advice covers all stages of the process chain, from the production of mineral oils and the generation of electricity, to the transport and trade of excisable goods (including energy products, alcohol), their use in industrial processes and the combustion of waste as secondary or substitute fuels.

Our consulting also includes process optimisation with the integration of our clients' IT landscape to increase efficiencies. The digitalisation of functions and processes in the finance sector is a megatrend that has been affecting all larger companies for many years. It can be assumed that the digitalisation of the tax function will ultimately lead to automated end-to-end processes that support tax compliance and tax advice as well as enable tax reporting "at the push of a button". In the context of excise duty, the integration of the company's mass data ("Big Data") as well as automated validation processes will also lead to profound changes. With the help of digitalisation, the transparency of business processes can be increased and tax risks avoided.

Updates and news on Climate Protection, Green Tax and Energy

In December 2022, the Council of the European Union and the European Parliament reached a provisional agreement on the Carbon Border Adjustment Mechanism (CBAM). CBAM is one of the EU's climate actions, designed to prevent the offset of the EU's efforts to reduce greenhouse gas (GHG) emissions.

Carbon Border Adjustment Mechanism (CBAM)

With extensive energy cost relief packages, national governments are trying to mitigate the dramatic effects on their economies and private households. For companies, there is a need for action on various fronts. These measures apply in Germany, Poland, and the UK, for example.

Tax Measures for Tackling the Increasing Energy Prices

The new Spanish tax on non-reusable plastic packaging came into effect on 1 January 2023. Several documents published by the Spanish tax authorities, as well as a ministerial order published in December 2022, provide new guidelines about compliance with this tax.

The Spanish Plastic Tax has become effective

Manufacturers and importers of products made of single-use plastic will contribute to the costs of municipal waste disposal in parks and streets in future through a new special levy. Until now, the general public has borne the costs of cleaning up and disposing of carelessly discarded waste. According to the Federal government’s plans, this situation is now about to change.

Germany introduces a new special levy for products made of single-use plastic

In the wake of the energy crisis which caused the skyrocketing of fuel prices in Bulgaria the Bulgarian Parliament in its final hours before its probable adjournment and impending new elections adopted a number of tax measures aiming at reduction of consumer energy products prices.

Tax Measures for Tackling the Increasing Energy Prices in Bulgaria

Tiago Marreiros Moreira and Filipe de Vasconcelos Fernandes of Vieira de Almeida discuss the types of policy objectives aligned with green taxation in Portugal, and predict upcoming changes.

The evolution of green taxation in Portugal

On 2 March 2022, 175 member states of the United Nations (UN) endorsed a resolution at the fifth session of the UN Environment Assembly in Nairobi to create an intergovernmental negotiating committee to commence work on crafting a legally binding international agreement by the end of 2024 to tackle plastics waste and pollution.

Plastic Taxation in Europe

The ELTIF is intended to promote long-term investments in the real European economy ('Europe 2020 strategy'). The main objective is to encourage investments in the public domain in order to stimulate job creation, infrastructure development, mobility projects, but also investments in certain unlisted companies or listed SMEs.

The Belgian ELTIF: Ready for launch in 2022?

Ministerial Order no. 331-E/2021, of 31 December, was published, regulating the contribution on single-use packaging made of plastic or aluminium purchased in ready-to-eat meals, provided for in article 320 of Law no. 75-B/2020, of 31 December, which approved the State Budget Law for 2021.

Portugal: Contribution on single-use plastic packaging

The UK plastic packaging tax will come into force on 1 April 2022. The new tax will apply to plastic packaging manufactured in or imported into the UK that does not contain at least 30% recycled plastic. In this context, plastic packaging is defined as packaging that is predominantly made of plastic by weight.

Necessary activities due to the new UK plastic packaging tax starting in April 2022

The massive expansion of electromobility in recent months is affecting many areas. After electric car purchases had for a long time remained at a low-level, new registration figures for pure battery vehicles and plug-in hybrids multiplied last year. These developments have also led to a need for action in the area of electricity tax.

Electromobility’s electricity tax implications in Germany

23.5 % of total gross electricity generation in Germany comes from wind energy. This article explains the electricity tax obligations for onshore and offshore wind power plants.

Electricity tax for wind farms

A glance at the EU’s so-called “plastic tax” and the current implementation status of this tax in Germany.

The Plastic Tax in Germany

The new Spanish Law on Waste and Contaminated Soils restricts the introduction of certain plastic products and establishes both a tax on single-use plastic to prevent waste generation and a tax on waste disposal and incineration.

Spain will introduce for the first time a tax on single-use plastic

In the online seminar hosted by Deutsches Verpackunsinstitut (German Packaging Institute), WTS Germany experts and selected WTS Global experts will talk about the challenges that arise for companies in the course of introducing a tax on unrecycled packaging waste as of 1 January 2021.

"Plastic tax in Europe: Who will pay the bill in the end?"

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