By letter of 4 March 2010, Sweden sought authorisation to apply a reduced rate of electricity tax to electricity directly provided to vessels at berth in a port (shore-side electricity) pursuant to Article 19 of Directive 2003/96/EC.

With the tax reduction it intends to apply, Sweden aims to promote a more widespread use of shore-side electricity as an environmentally less harmful way for ships to satisfy their electricity needs while lying at berth in ports as compared to the burning of bunker fuels on board the vessels.

In so far as the use of shore-side electricity avoids emissions of air pollutants associated with the burning of bunker fuels on board the vessels at berth, it contributes to an improvement of local air quality in port cities. Under the specific conditions of the electricity generation structure in the region concerned, i.e. the Nordic electricity market including Sweden, Denmark, Finland and Norway, the use of electricity from the onshore grid instead of electricity generated by burning bunker fuels on board is furthermore expected to avoid CO2 emissions. The measure is therefore expected to contribute to the Union’s environmental, health and climate policy objectives.

Allowing Sweden to apply a reduced rate of electricity taxation to shore-side electricity does not go beyond what is necessary to achieve the above mentioned objective, since on-board generation will remain the more competitive alternative in most cases. For the same reason, and because of the current relatively low degree of market penetration of the technology, the measure is unlikely to lead to significant distortions in competition during its lifetime and will thus not negatively affect the proper functioning of the internal market.

It follows from Article 19(2) of Directive 2003/96/EC that each authorisation granted under that provision is to be strictly limited in time. Given the need for a period long enough in order not to discourage port operators from making the necessary investments, but also the need not to undermine future developments of the existing legal framework, it is appropriate to grant the authorisation requested for a period of 3 years, subject however to the entry into application of general provisions in the matter, at a point in time earlier than the expiry thus foreseen,