Factsheet for measure
EE-2022-19/2911
–
Updated
– measures in Estonia
Cut in excise duty rates of special purpose diesel fuel
Eriotstarbelise diislikütuse aktsiisimäära alandamine
Background information
The price of the special purpose diesel fuel has increased by 85%. To mitigate the effects such a high increase in energy prices are causing, the Parliament approved changes of the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act on 18 May 2022 reducing the excise duty rate of diesel fuel for specific purposes.
Content of measure
Between 1 May and 31 December 2022 the excise duty rate for special purpose diesel fuel is set to €21 per 1,000 liters. This is the lowest rate allowed in the European Union. Previously, the excise rate for the fuel was €100 per 1,000 liters.
The special purpose diesel fuel is allowed to be used in agriculture. In addition, temporarily between 1 July 2020 and 30 April 2023, it is also allowed to be used in oil shale industry for mining and transport. It can also be used in commercial fishing, although in most cases the use of fuel in this field is exempt from excise duty.
Updates
The following updates to this measure have been made after it came into effect.
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29 September 2022
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At the end of 2021, a law was passed, which provided for a four-year gradual restoration of fuel and electricity excise duties to the pre-crisis level, starting from May 1, 2023. The changed security situation in Europe has led to a sharp increase in the price of energy carriers.A new bill was signed to postpone excise duty increases by one year and the pre-crisis level of excise duty rates will be reached in 2027.
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Use of measure
It is expected that the wholesale price of the special purpose diesel fuel could decrease by 9.48 cents per liter (nearly 7%).
Target groups
Actors and funding
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Actors
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Funding
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National government
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No special funding required
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Social partners
Social partners' role in
designing the measure
and form of involvement:
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Trade unions
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Employers' organisations
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Role
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Unknown
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Unknown
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Form
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Not applicable
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Not applicable
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Social partners' role in the
implementation, monitoring and assessment phase:
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Unknown
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Main level of involvement: N/A
Involvement
No information available.
Views and reactions
The Central Union of Estonian Farmers and the Estonian Chamber of Agriculture and Commerce have expressed their concerns regarding the excise duty rate already in 2021 and thus they are supportive of the temporary reduction of the excise rate.
Sectors and occupations
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This case is sector-specific
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Economic area
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Sector (NACE level 2)
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A - Agriculture, Forestry And Fishing
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A1 Crop and animal production, hunting and related service activities
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A2 Forestry and logging
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A3 Fishing and aquaculture
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B - Mining And Quarrying
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B6 Extraction of crude petroleum and natural gas
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This case is not occupation-specific.
Sources
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26 April 2021: Põllumehed: Põllumajanduskütuse aktsiisisoodustusega tuleb kindlasti jätkata (Farmers: The excise discount on agricultural fuel must definitely be continued)
(www.taluliit.ee)
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02 May 2022: Seaduseelnõu seletuskiri (Explanatory note of the draft legislation)
(www.riigikogu.ee)
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22 May 2022: Alkoholi-, tubaka-, kütuse- ja elektriaktsiisi seaduse ning alkoholi-, tubaka-, kütuse- ja elektriaktsiisi seaduse muutmise seaduse muutmise seadus (Act amending the Alcohol, Tobacco, Fuel and Electricity Excise Act and the Alcohol, Tobacco, Fuel and Electricity Excise Act Amendment Act)
(www.riigiteataja.ee)
