By letter of 2 July 2014, Denmark sought authorisation to apply a reduced rate of electricity tax to electricity directly provided to vessels at berth in a port (‘shore-side electricity’), in accordance with Article 19(1) of Directive 2003/96/EC. Upon the request of the Commission, Denmark provided additional information on 13 November 2014 and on 23 February 2015.

With the tax reduction it intends to apply, Denmark aims to promote the use of shore-side electricity. The use of such electricity is considered to be an environmentally less harmful way to satisfy the electricity needs of vessels lying at berth in ports, compared with the burning of bunker fuels by those vessels.

In so far as the use of shore-side electricity avoids emissions of air pollutants originating from the burning of bunker fuels by 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 Denmark, Finland, Sweden and Norway, the use of electricity from the onshore grid instead of electricity generated by burning bunker fuels on board is furthermore expected to reduce CO2 emissions. The measure is therefore expected to contribute to the environmental, health and climate policy objectives of the Union.

Denmark explicitly requested that the tax reduction not be applied to electricity directly supplied to private pleasure craft at berth in a port.

Allowing Denmark to apply a reduced rate of electricity taxation to shore-side electricity does not go beyond what is necessary to increase the use of shore-side electricity, since on-board generation of electricity will remain the more competitive alternative in most cases. For the same reason, and because the technology is currently not available in Denmark, 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.

In accordance with Article 19(2) of Directive 2003/96/EC, each authorisation granted under that Article is to be strictly limited in time. In order to ensure that the authorisation period is sufficiently long so as not to discourage port operators from making the necessary investments, the authorisation should be granted for a period of six years, subject however to general provisions on the matter that may be adopted under Article 113 of the Treaty on the Functioning of the European Union (TFEU) and that become applicable prior to the anticipated expiration of the authorisation period.

This Decision is without prejudice to the application of the Union rules regarding State aid,