Case Focus : Kernkraftwerke Lippe-Ems GmbH v Hauptzollamt Osnabrück (4 June 2015)

Focus on the Kernkraftwerke Lippe Ems’s case (Court of Justice) of the 4th June 2015¹.

In 2010, Germany adopted a law on excise duty on nuclear fuel (Kernbrennstoffsteuegesetz). That law introduced, for the period from 1 January 2011 to 31 December 2016, a duty on the use of nuclear fuel for the commercial production of electricity.
The duty in respect of 1 gramme of plutonium 239, plutonium 241, uranium 233 or uranium 235 is 145€ and it is payable by nuclear power station operators. It is designed to raise revenue with a view, inter alia, to contributing, in the context of fiscal consolidation
and in accordance with the polluter-pays principle, to a reduction in the burden entailed for the Federal budget.

Kernkraftwerke Lippe-Ems which operates a nuclear plant has challenged the duty before German courts.
The Finanzgericht decided to submit the question of the compatbility of the duty with EU law to the Court of Justice.

The Court of Justice replied that EU law does not preclude a duty such as the German duty on nuclear fuel :

– First, the Court rejected the argument that nuclear fuel must be exempt from taxation under the directive on taxation of energy products and electricity. That fuel does not appear on the exhaustive list of energy products set out in the directive, nuclear fuel cannot be covered by the exemption provided for some of those products.

– Next, the Court found that the directive concerning the general arrangements for excise duty does not preclude the German duty on nuclear fuel, which is levied on the use of such fuel for the commercial production of electricity.

– Moreover, the Court ruled that the German duty on nuclear fuel does not constitute State aid prohibited by EU law. It is not a selective measure. Methods of producing electricity, other than that based on nuclear fuel, are not affected by the rules introduced by the law on duty on nuclear fuel.

– Finally, the Court considered that the Treaty establishing the European Atomic Energy Community (‘Euratom Treaty or EAEC’), which covers nuclear fuel, does not preclude the duty in question, either. That duty does not constitute a charge having equivalent effect to a customs duty. It is levied not because nuclear fuel has crossed a frontier but because it is used for the commercial production of electricity, irrespective of the source of that fuel.