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Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for measure EE-2022-19/2911 – measures in Estonia

Cut in excise duty rates of special purpose diesel fuel

Eriotstarbelise diislikütuse aktsiisimäära alandamine

Country Estonia , applies nationwide
Time period Temporary, 01 May 2022 – 31 December 2022
Context War in Ukraine
Type Legislations or other statutory regulations
Category Responses to inflation
– Support for fuel expenses
Author Ingel Kadarik (Praxis Center for Policy Studies) and Eurofound
Measure added 15 September 2022 (updated 21 September 2022)

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.

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

Workers Businesses Citizens
Does not apply to workers Sector specific set of companies
Does not apply to citizens

Actors and funding

Actors Funding
National government
No special funding required

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Unknown Unknown
Form Not applicable Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • Unknown
  • 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

    • Economic area Sector (NACE level 2)
      A - Agriculture, Forestry And Fishing A1 Crop and animal production, hunting and related service activities
      A2 Forestry and logging
      A3 Fishing and aquaculture
      B - Mining And Quarrying B6 Extraction of crude petroleum and natural gas

This case is not occupation-specific.

Sources

  • 26 April 2021: Põllumehed: Põllumajanduskütuse aktsiisisoodustusega tuleb kindlasti jätkata (Farmers: The excise discount on agricultural fuel must definitely be continued) (www.taluliit.ee)
  • 02 May 2022: Seaduseelnõu seletuskiri (Explanatory note of the draft legislation) (www.riigikogu.ee)
  • 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)

Citation

Eurofound (2022), Cut in excise duty rates of special purpose diesel fuel, measure EE-2022-19/2911 (measures in Estonia), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/EE-2022-19_2911.html

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