Exposed: Europe’s accounting tricks on energy savings

(EurActiv, 11 Oct 2019) A growing number of EU member states are planning to use accounting tricks, including changes in fuel taxes introduced in the past, to claim “additional” energy savings as part of their EU climate obligations, EURACTIV can reveal.

“In the beginning, there were eight countries notifying taxation measures. Now, we’re looking at eleven,” said Stefan Scheuer, head of the Coalition for Energy Savings, a platform that brings together businesses, local authorities and civil society groups.

“There is definitely a risk,” warned Scheuer, whose platform represents 2,500 cities and towns across Europe, as well as hundreds of companies, cooperatives, environmental groups, and trade associations involved in energy savings.

Accounting tricks under consideration include claiming savings from changes to VAT on fuel introduced in the past, which were not necessarily intended to deliver energy savings in the first place, Scheuer said.

One of the wrongdoers is the Czech Republic, which is planning to retroactively claim savings from old fuel taxes that went into effect in 2014 as part of its national energy savings obligations. Latvia, Lithuania, and Greece are similarly planning to use retroactive tax changes to claim “additional” energy savings.

The accounting trick is quite simple: It involves comparing estimated energy savings from existing tax measures with the likely savings if taxes were set at the minimum EU level – and credit the difference as “additional” savings, explains Brook Riley, head of EU affairs at Rockwool, an insulation company.

“In practice of course, they’re almost never additional,” Riley says, calling the accounting trick “very disingenuous”.

View the RAP report here 

External link

EurActiv, 11 Oct 2019: Exposed: Europe’s accounting tricks on energy savings