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Unpacking the EU Green Deal


Andrew Goddard, Chairman, Verification of Lubricant Specifications


In December, President of the European Commission von der Leyen unveiled plans to accelerate the European Union’s movement towards becoming a climate-neutral continent by 2050.


Part of this deal enshrines carbon neutrality in European law, extends the existing Carbon Emissions Trading System to include marine and phases out aviation’s preferential allowances, reviews the Energy Tax Directive, and introduces an Industrial Strategy to further reinforce a circular economy.


At the moment, the main impact upon the lubricants sector is likely to be through the review of the Energy Tax Directive. Lubricants are currently included in this but at a zero rate as they are typically not expended in application unlike fuel which is converted into energy and emissions.


Lubricants could also be impacted by the introduction of a planned Carbon Border Tax based on the carbon content of products. Depending on the scope of the definition used, current proposals could include those energy-intensive industries like manufacturing being subject to such a tax on the movement of products across borders, with the purpose being to regularise the impact of carbon-reduction measures across countries in order to reduce emissions.


This could mean that used lubricants or even finished lubricants being exported or imported into the EU becoming subject to a Carbon Border Tax. The taxation of energy products is seen as one of the ways of achieving emissions targets and the Commission recognises that taxation does impact the price of energy products.


UEIL, the Union of the European Lubricants Industry, is leading the policy work on the review of the EU Energy Tax Directive. UEIL represents over 450 companies and 100,000 employees in the lubricants industry in Europe, with a special focus on SMEs and independent companies that produce lubricants and metal processing fluids essential for the automotive and industrial sectors.


46 LUBE MAGAZINE NO.156 APRIL 2020


UEIL’s position is to retain the status quo in having lubricants included in the Energy Tax Directive but at a zero rate which is a precedent already accepted by European policymakers.


Any change to this would significantly impact the price of lubricants throughout the EU. Whilst lubricants have a role to play in helping to solve the emissions issue, lubricants themselves are not the problem. They can be part of the solution in supporting energy efficiency, reducing emissions and conserving fuel.


What about Brexit? The Green Deal may be irrelevant for the UK lubricants market in 12 months’ time when the UK has left the EU.


The Government has signalled its intention to align closely with the EU on climate change and retain its existing carbon reduction commitments. Exports into the EU will also need to continue to abide by the region’s regulatory framework. Other questions like the UK’s continued involvement in the EU’s Carbon Trading System are still to be answered.


The Verification of Lubricant Specifications (VLS), the independent UK trade body that verifies lubricant specifications, will continue to work closely with UEIL to maintain the zero-tax status of lubricants and communicate the impact of the Green Deal to everyone involved in the lubricants industry.


For more information on VLS please call 01442 875922 or visit: www.ukla-vls.org.uk.


LINK www.ukla-vls.org.uk


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