Diesel and Gasoline Taxation

The EU Energy Taxation Directive (ETD), in force since 2003, sets common minimum excise duty rates in EUR/liter for fuel used for motor, heating, industrial and commercial purposes. The tax on diesel and fuel for other purposes, liquefied petroleum gas (LPG) and natural gas was set lower than excise duty on gasoline. The aim of lower tax on diesel was to promote internal EU trade with the European haulers. Lower taxation together with CO2 targets for cars and vans, introduced in 2009, aimed at fuel efficiency improvement, and promoted dieselization of the entire car fleet in Europe (figure below). However, tighter exhaust emissions and regional decisions to reduce diesel vehicle share have contributed to a slight increase in gasoline consumption since 2018. How