Aligning the Energy Taxation Directive with the Energy Efficiency First Principle – The Case for Cogeneration
A joint letter to the Danish presidency of the Council of the European Union
On behalf of energy-intensive industries, the district heating sector, energy efficiency solution providers, and energy service companies, the undersigned urge EU legislators to ensure that the revised Energy Taxation Directive (ETD) is fully aligned with the Energy Efficiency First principle.
Despite the significant energy efficiency and resiliency advantages delivered by cogeneration across the EU economy, the proposed revision of the ETD inadvertently favours less efficient energy production. Centralised electricity generation benefits from a mandatory EU-wide full tax exemption on energy inputs, regardless of plant efficiency or fuel type used. In contrast, cogeneration receives only partial, temporary, or optional tax relief on the fuels used to produce both electricity and heat, under strict energy efficiency and emission requirements. This disparity risks discouraging investment in proven energy-saving cogeneration technologies and undermines Europe’s decarbonisation and energy resilience objectives.
