Energy taxation directive: catastrophic adoption avoided but EU ministers fail to challenge fossil fuel subsidies

13 November 2025

EU Finance Ministers meeting today in Brussels stopped short of agreeing on the Danish Presidency’s proposed text for a revised Energy Taxation Directive (ETD). The outcome prevents the immediate adoption of one of Europe’s largest fossil fuel subsidies but leaves the EU with its twenty-year old fossil fuel tax exemptions and without a clear path forward

This despite scientists, economists, representatives of the rail sector, and lawyers joining NGOs and EU citizens to express alarm at attempts to maintain tax exemptions on aviation, maritime transport and fishing vessel fuels until 2035.

As high-level EU representatives attend COP30 in Belém and ten years after the Paris Agreement, BLOOM now calls on EU Member States to continue more ambitious negotiations. 

If adopted, the text proposed by the Danish Presidency, would have extended at least a decade of fiscal privileges for the most polluting sectors and derailed Europe’s climate and fiscal objectives.

The fiscal losses linked to these exemptions are colossal. Across the EU, aviation escapes 21.3 billion euros in taxes each year, maritime transport 24 billion, and fisheries 1.5 billion: a total of 46.8 billion euros in lost revenue each year. These funds could instead finance clean transport, renewable energy, and the resilience of communities facing the effects of climate breakdown.

Although a few member states bemoaned the lack of ambition in the current “compromise” text, none of them demanded an end to the exemptions for aviation, maritime transport or fisheries sectors as initially proposed by the Commission.

The Commission’s latest Climate Action Progress Report reminded Member States that they must urgently implement measures consistent with the 55% emissions reduction target by 2030. Preserving fossil fuel tax exemptions for another decade would make this goal unattainable.

Commissioner Hoekstra preferred dwelling in the past rather than illuminating a path ahead. For him the text is clearly still on the negotiating table but without the initial and vital ambition for progressive energy taxation to support the EU’s transition away from fossil fuels.

“The lack of progress on this file is in stark contrast to the urgency of the climate emergency, and is a failure of EU leadership” said Flaminia Tacconi, Director of BLOOM’s subsidies campaign. “Member States must continue negotiations along the lines of the Commission’s original proposal, ensuring taxation aligns with climate impact and ends the outrageous privileges enjoyed by fossil fuel intensive sectors”.