Background: a 2003 directive in a 2024 world
The current EU Energy Taxation Directive dates from 2003. It sets minimum excise duty rates on motor fuels in volume terms: €359/1,000 litres for petrol, €330 for diesel, €125 for LPG. These floors have not been updated since then, meaning inflation alone has halved their real value.
The Commission put forward a revised ETD in July 2021 as part of the "Fit for 55" package. The core change: shift from volume-based to energy-content and carbon-content rates. Diesel, which has higher carbon content per litre than petrol, would no longer receive a lower minimum rate — a deliberate move to end a subsidy the Commission estimates costs EU treasuries €17 billion annually.
Excise duty is the single largest component of petrol and diesel prices in most EU states — ahead of VAT and the crude cost. A structural change to minimum rates would permanently alter the floor below which member states cannot set their levies. See the guide on price composition for context.
The proposed rate structure
Under the Commission's proposal, fuels would be taxed on two bases simultaneously: an energy-content rate (€/GJ) and a carbon rate (€/tCO₂). Motor fuels would face a combined minimum of approximately €10.75/GJ plus a carbon rate transitioning toward alignment with the EU ETS carbon price.
For petrol this translates to roughly €0.38–0.44/litre at current energy content figures — higher than today's €0.359 minimum. For diesel, the energy-content component gives around €0.43/litre, compared to today's €0.330 minimum. The European Parliament's legislative observatory tracks the dossier's progress through the co-decision procedure.
| Country | Current petrol duty (€/L) | Current diesel duty (€/L) | Direction of change |
|---|---|---|---|
| Netherlands | €0.80 | €0.52 | Diesel ↑, petrol neutral |
| Germany | €0.65 | €0.47 | Diesel ↑ modestly |
| France | €0.69 | €0.59 | Broadly neutral |
| Poland | €0.37 | €0.34 | Both ↑ to meet new floor |
| Hungary | €0.36 | €0.31 | Both ↑ significantly |
The unanimity problem
Taxation in the EU requires unanimous agreement in the Council. Any single member state can block the proposal indefinitely, and several — particularly those that would face large increases — have already signalled reluctance. Hungary, Poland, and some smaller Eastern European states have highlighted energy poverty concerns and competitiveness issues for road haulage.
The Commission has suggested moving energy taxation to qualified majority voting, but this itself requires unanimity to implement. The Council of the EU's tax policy page outlines the current decision-making framework.
Diesel's tax advantage: a slow death either way
Even without ETD reform, the diesel tax gap is narrowing in several member states unilaterally. France has been raising diesel duties relative to petrol since 2018. Germany eliminated the haulage duty benefit for road freight from 2024. The Netherlands has a roadmap to full parity by 2030.
For drivers, the consequence is that the historical assumption — diesel is cheaper than petrol at the pump — no longer holds in an increasing number of EU markets. Our guide Petrol or diesel: which costs less to run? explores the full cost picture.
Timeline and current status
As of October 2024, the ETD revision remains stalled in Council working groups. The Belgian Presidency made some progress on technical annexes in H1 2024, but no political agreement has been reached. The Hungarian Presidency (H2 2024) has not prioritised the dossier. A realistic timeline for adoption, if it moves at all, is 2026–2027, with a ten-year phase-in for compliance.
Track live updates via the EUR-Lex legislative procedure tracker.
Questions
What is the Energy Taxation Directive?
The EU's Energy Taxation Directive sets minimum rates of excise duty on energy products used as motor fuel or heating fuel across all 27 member states. Member states may levy higher rates but not lower ones. The current ETD (Council Directive 2003/96/EC) has been in force since 2004. The Commission proposed a full revision in 2021 to align it with the EU's climate ambitions.
Which EU countries would see the biggest pump price increases?
Member states currently below the proposed new minimum rates — principally Poland, Hungary, Bulgaria, Romania, and the Baltic states — would face the largest increases. These countries have historically kept fuel taxes lower, partly for competitiveness reasons and partly due to lower average incomes. The Eurostat energy price statistics show the current spread across member states.
Does the ETD reform affect diesel more than petrol?
Yes, significantly. Diesel currently benefits from preferential tax treatment in most EU states — the minimum rate is lower than petrol despite diesel having higher carbon content per litre. The revised ETD would phase this out over ten years, narrowing the price gap between diesel and petrol at the forecourt. For truck operators in particular, this is a major cost consideration. The International Road Federation has published analysis on the haulage industry implications.