Select Committee on European Union Forty-Ninth Report


BIOFUELS FOR TRANSPORT: (15500/01)

Letter from the Chairman to Mr David Jamieson MP, Parliamentary Under-Secretary of State, Department for Transport, Local Government and the Regions

  As you know, the Scrutiny reserve on this document has already been lifted. Nevertheless, Sub-Committee B considered your supplementary Explanatory Memorandum dated 13 March at their meeting on 15 April.

  We strongly support the Government's concern about the restrictive nature of this proposed Directive, and are equally reluctant to see mandatory targets set for the quantity of biofuels sold in each of the Member States. Like you, we would prefer indicative targets.

  We understand that there have been only three meetings of the Energy Council Working Group so far, and that there is some support for the UK's concerns on these two essential issues.

  We should be grateful if you could keep us informed of the progress of this proposed Directive—it has serious implications for the United Kingdom.

Letter from the Chairman from Mr David Jamieson MP, Parliamentary Under-Secretary of State, Department for Transport.

  Thank you for your letter dated 28 June which Sub-Committee B considered at its meeting on 8 July.

  We are glad to see that the text agreed at the Energy Council reflected not only the majority viewpoint of Member States, but the two major UK national concerns—indicative targets as opposed to mandatory targets, and a less restrictive scope for the Directive.

  We are grateful to you for keeping us informed, and we look forward to seeing what the next stage brings.

9 July 2002

BIOFUELS FOR TRANSPORT (12043/02)

Letter from The Chairman to Mr David Jamieson MP

  Thank you for your Explanatory Memorandum dated 7 October submitting the amended proposal. Sub-Committee B considered this document at its meeting on 21 October.

  We assume that this document, 12043/02, supersedes EM 15500/01 in that it reflects the amendments proposed during the first reading debate of the European Parliament.

  We are concerned that the European Parliament is intent on introducing mandatory targets, and we look forward to learning how the November Energy Council deals with the amended proposal.

  We are also alarmed by the suggestion in paragraph 30 of your Department's preliminary impact assessment that the Commission contemplates recommending the introduction of a selective tax on the environmental performance of various biodiesels. Does the Commission have the power to make such a recommendation? Were the Commission to do so, what support would such a recommendation attract among other EU Member States and in the European Parliament?

  In the meantime, the Scrutiny reserve on this document is maintained.

22 October 2002

Letter from David Jamieson to the Chairman

  Thank you for your letter of 22 October, detailing Sub-Committee B's response to the amended proposal from the European Parliament, which includes amendments suggested during first reading debate.

  In response to the points raised by the Committee, I agree that the considered inclusion of mandatory targets for the use of biofuels in transport is regretful. The UK Government position (and one shared by the majority of Member States in the European Council) remains that mandatory targets are totally unacceptable. This point was explicitly acknowledged by the Parliament's rapporteur at the Energy Council meeting on 6-7 June. Consequently, there is extremely limited political backing for the inclusion of mandatory targets and we expect the final text to include indicative targets, in line with the UK position. The UK Government will, of course, continue to work with Members of the Council and the European Parliament to secure this outcome.

  Equally, with regard to the Committee's other concern, we expect that the amendment entitling the Commission to make recommendations on a differentiated tax based on the environmental impact of alternative transport fuels will be removed from the final version.

  As you are aware, the UK strongly withholds the right to take decisions on taxation policy and is opposed to any action not consistent with this principle. It is the UK's opinion that the provision in the amended proposal is "primarily of a fiscal nature" and as such is excluded from the scope of Article 175(1) and the co-decision process under which the Directive is being negotiated. It is therefore the UK's opinion that this provision would be ultra vires under this article and we would insist on it being removed from any final text prior to giving the UK's agreement. Our argument is that a proposal authorising such a recommendation ought to be made under the same procedures as legislation which may result from that recommendation—in this case Article 175(2).

  I hope that you find this response reassuring.

11 November 2002

Letter from David Jamieson to the Chairman

  I am writing further to my letter of 11 November to your predecessor, Lord Brabazon, responding to his letter of 22 October outlining the Scrutiny Committee's concerns.

  As you may recall from my EM of 7 October (12043/02), we had expected that this dossier would be discussed at the Energy Council on 25 November where it was expected that the political agreement reached on 6 June would be adopted as the Common Position. However, I have since been informed by the UK Permanent Representative, that the Presidency now wish the Common Position to be adopted as an "A" point at the General Affairs Council on 18 November. This is for tactical reasons, as they want to avoid the possibility of the dossier being reopened at the Energy Council.

  The UK agrees with this approach. The UK has been instrumental in shaping the common position text which is fully in line with your Committee's concerns, including importantly, the inclusion of indicative targets and exclusion of taxation. Including the dossier on the Energy Council agenda could open the possibility of negative changes being imposed on a text which is currently fully acceptable to the UK. Therefore, I do not believe it would be in the national interest to upset the Danish Presidency's plans for this dossier.

  As you will appreciate, the General Affairs Council is unable to agree the dossier whilst the present UK scrutiny reserve is maintained. These are exceptional circumstances and in the interests of securing a positive outcome for the UK, I hope that you will agree that the best way forward is to lift the scrutiny reserve on the document. I apologise for having to pre-empt the Committee's formal clearance of the additional evidence provided in my previous letter. However, I am taking this exceptional action only after serious consideration.

  I enclose a copy of the proposed Common Position document (12695/02) tabled for agreement, for your information.

15 November 2002

Letter from the Chairman to David Jamieson MP

  Thank you for your letter dated 16 November which was considered by Sub-Committee B on 3 December together with your letter dated 11 November.

  We are reassured by the explanation in your letter of 11 November that mandatory targets are totally unacceptable to HMG.

  We are also content with the strong line that your Department has been taking over the question of taxation policy. We note your statement that "the UK strongly withholds the right to take decisions on taxation policy and is opposed to any action not consistent with this principle".

  We accept that there was benefit in the tactical decision to take this dossier as an "A" point at the General Affairs Council on 18 November, rather than have it reconsidered at the Energy Council on 25 November.

  Under the circumstances, therefore, we regard the Scrutiny reserve on this document as having been lifted but we should be grateful to be kept informed of the progress of this document in the European Parliament.

4 December 2002

Letter from David Jamieson to the Chairman

  I am writing to inform you that a set of compromise amendments on the biofuels Directive have been agreed between the Council, the Parliament and the Presidency in trilogue. These amendments were voted through by the European Parliament at Second Reading on 12 March.

  The final proposal for agreement is based on the Council Common Position, amended as set out in document 7133/03. It is the Greek presidency's intention to table the amendments as an "A" point at Council on 7 April—marking the final agreement on this dossier.

  You may recall we last exchanged correspondence on this dossier in late November, in advance of agreement being reached on the Council's Common Position at General Affairs Council (GAC). The Common Position text requires member States to set indicative targets for the use of biofuels and other renewable fuels and for reports on progress towards these targets to be submitted to the Commission on an annual basis.

  Since then, the Presidency has been working hard to reconcile the spirit of the Common Position document with the European Parliament's aspirations—as voiced at first reading—for the Directive to require mandatory targets for biofuels use. The UK has always opposed this approach on the principle that such decisions should be made at the national level, consistent with their domestic circumstances. Happily, this major point of principle has been accepted by Parliament. The trade-off compromise amendments, as detailed in document 7133/03, are largely tokenistic and do not involve any radical departure from the Common Position. They are fully acceptable to the UK and the Government is content to back agreement to this text when it goes to Council as an "A" point on 7 April.

  I enclose document 7133/03 together with the original Common Position text (12695/02), for consideration by your Committee. Regrettably, the Commission has not yet circulated an official consolidated text.

27 March 2003


 
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