ETD: Europe risks locking in fossil fuel subsidies until 2035

07 November 2025

As the Council prepares to decide the fate of the Energy Taxation Directive, new divisions emerged in Brussels. Although several Member States raised concerns about a deal that would maintain tax exemptions for fossil fuels until 2035, this must be translated into action to reject a climate-killing proposal.  

At a decisive meeting of the Council’s COREPER II committee on Wednesday, EU Member States failed to reach agreement on the Energy Taxation Directive (ETD). The current text, put forward by the Danish Presidency, and strongly supported by Germany, would maintain complete tax exemptions for fossil fuels used in aviation, maritime transport and fisheries until at least 2035. If adopted, it would amount to one of the largest fossil fuel subsidies in Europe and a major setback for the Green Deal.  

Although discussions are held behind closed doors, we understand eight countries, led by Germany, supported the Danish Presidency’s proposal and called for closure of the negotiations: Germany, Sweden, Lithuania, Ireland, Portugal, Estonia, Slovenia and Romania. Germany was reportedly the first to intervene, urging Member States to adopt the compromise and move on.  

Four countries, however, are understood to have raised concerns the Czech Republic, Slovakia, Poland and Croatia. The Czech Republic opposed the text explicitly on environmental grounds, Poland referred to the Union’s climate policies, and Slovakia rejected a proposal it considered too weak. In a discussion dominated by pressure to accept a hollow deal, these Member States demonstrated that climate integrity still has defenders in Europe. However, warm words are not enough: As such decisions on tax need unanimity, we need a champion to back up words with action, veto the current text and push to continue negotiations. 

Thirteen other countries entered reservations, showing hesitation or dissatisfaction with the text. Spain, the Netherlands, France, Malta, Finland, Bulgaria, Belgium, Italy, Luxembourg, Greece, Hungary, Austria and Latvia either expressed environmental disappointment or questioned the text’s consistency with EU competitiveness and legislative coherence. Cyprus and Denmark did not intervene as incoming and outgoing Presidencies.  

It remains uncertain whether Denmark will table an amended version before the ECOFIN Council of Ministers on 13 November. But with time running out, yesterday’s meeting sent a clear warning: if no Member State is ready to defend ambition, Europe risks locking in a decade of climate regression. 

This political double standard is all the more absurd as European leaders are simultaneously gathered in Belém for COP30, pledging global climate leadership while dismantling it in Brussels. The same governments that speak of phase-outs and planetary responsibility abroad are fighting to preserve fossil fuel privileges at home. 

The fiscal losses linked to these fossil fuel exemptions are staggering. Across the Union, they drain 46.8 billion euros in public revenue every year: 21.3 billion for aviation, 24 billion for maritime transport and 1.5 billion for fisheries. These are funds that could instead support the ecological transition, clean energy and the resilience of our communities.  

 While the Czech Republic, Poland, Slovakia and Croatia took a courageous stand for climate action, larger Member States such as Germany, France, the Netherlands and Belgium chose instead to defend the status quo. It is shameful that those with the greatest means, the highest emissions and the strongest responsibility to lead are bowing down to fossil interests and committing Europe to a fossil-fuelled future.  

 While scientists warn of systemic climate risks and the accelerating cost of inaction, the Council is preparing to approve a measure that directly contradicts the Paris Agreement and the Union’s climate laws.  

 The Energy Taxation Directive was meant to align taxation with environmental impact and end the privileges enjoyed by fossil fuels. The Czech Republic, Poland, Slovakia and Croatia have shown the way. Others must now follow their example. BLOOM calls on EU Finance Ministers to reject the Danish Presidency’s proposal and adopt a directive that finally puts a price on pollution, in line with the Green Deal, fiscal fairness and Europe’s international commitments.