Promociones Oliva Park (General arrangements for excise duty - Promotion of the use of energy from renewable sources - Judgment) [2021] EUECJ C-220/19 (03 March 2021)

Judgment This request for a preliminary ruling concerns the interpretation of Article 1(2) of Council Directive 2008/118/EC of 16 December 2008 concerning the general arrangements for excise duty and repealing Directive 92/12/EEC (OJ 2009 L 9, p. 12), Article 1, Article 2(k) and Article 3(1), (2) and (3)(a) of Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC (OJ 2009 L 140, p.16), and Articles 32 to 34 of Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC (OJ 2009 L 211, p. 55). The request has been made in proceedings between Promociones Oliva Park SL (‘Oliva Park’) and the Tribunal Económico Administrativo Regional de la Comunidad Valenciana (Regional Tax Tribunal of the Community of Valencia, Spain) (‘TEAR’), concerning the rejection of a request for rectification of the self-assessments of the tax on the value of electricity production (‘IVPEE’) for the years 2013 to 2016. Legal context European Union law Directive 2008/118 Article 1 of Directive 2008/118 provides: ‘ 1. This Directive lays down general arrangements in relation to excise duty which is levied directly or indirectly on the consumption of the following goods (hereinafter “excise goods”): (a) energy products and electricity covered by [Council] Directive 2003/96/EC [of 27 October 2003 restructuring the Community framework for the taxation of energy products and electricity (OJ 2003 L 283, p. 51)]; … 2. Member States may levy other indirect taxes on excise goods for specific purposes, provided that those taxes comply with the [EU] tax rules applicable for excise duty or value added tax as far as determination of the tax base, calculation of the tax, chargeability and monitoring of the tax are concerned, but not including the provisions on exemptions. …’ Directive 2009/28 Under Article 1 of Directive 2009/28, entitled ‘Subject matter and scope’: ‘This Directive establishes a common framework for the promotion of energy from renewable sources. It sets mandatory national targets for the overall share of energy from renewable sources in gross final consumption of energy and for the share of energy from renewable sources in transport. …’ Subparagraph (k) of the second subparagraph of Article 2, entitled ‘Definitions’, defines the concept of ‘support scheme’ as meaning ‘any instrument, scheme or mechanism applied by a Member State or a group of Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy, increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or otherwise, the volume of such energy purchased. This includes, but is not restricted to, investment aid, tax exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green certificates, and direct price support schemes including feed-in tariffs and premium payments’. Article 3 of that directive, headed ‘Mandatory national overall targets and measures for the use of energy from renewable sources’, provides: ‘1. Each Member State shall ensure that the share of energy from renewable sources, calculated in accordance with Articles 5 to 11, in gross final consumption of energy in 2020 is at least its national overall target for the share of energy from renewable sources in that year, as set out in the third column of the table in part A of Annex I. … 2. Member States shall introduce measures effectively designed to ensure that the share of energy from renewable sources equals or exceeds that shown in the indicative trajectory set out in part B of Annex I. 3. In order to reach the targets set in paragraphs 1 and 2 of this Article Member States may, inter alia, apply the following measures: (a) support schemes; …’ Directive 2009/72 Article 1 of Directive 2009/72, entitled ‘Subject matter and scope’, provides: ‘This Directive establishes common rules for the generation, transmission, distribution and supply of electricity, together with consumer protection provisions, with a view to improving and integrating competitive electricity markets in the [European Union]. It lays down the rules relating to the organisation and functioning of the electricity sector, open access to the market, the criteria and procedures applicable to calls for tenders and the granting of authorisations and the operation of systems. …’ Articles 32 to 34 of Directive 2009/72, which are in Chapter VIII thereof, entitled ‘Organisation of access to the system’, govern the arrangements for such access. Article 32 of that directive, entitled ‘Third-party access’, provides, in paragraph 1 thereof, that Member States are to ensure the implementation of a system of third-party access to the electricity transmission and distribution systems, which must be applied objectively and without discrimination between system users. Article 33 of that directive, entitled ‘Market opening and reciprocity’, concerns the opening of the electricity market and reciprocity, and Article 34 of that directive, entitled ‘Direct lines’, concerns measures ensuring access to direct lines to all electricity producers, electricity suppliers and eligible customers within the territory of a Member State concerned. Spanish law The preamble to Ley 15/2012 de medidas fiscales para la sostenibilidad energética (Law 15/2012 on fiscal measures for sustainable energy) of 27 December 2012 (BOE No 312 of 28 December 2012, p. 88081), states: ‘1. The objective of this law is to adapt our tax system to more efficient and environmentally friendly use and sustainable development … … This law is based principally on Article 45 of the Constitution … Thus, one of the axes of this tax reform is to internalise the environmental costs resulting from electricity production … This law must serve as a stimulus to improve our levels of energy efficiency while at the same time ensuring better management of natural resources and continuing to enhance the new model of sustainable development, both from an economic and social point of view, as well as from an environmental point of view. … To that end, this law introduces three new taxes: the [IVPEE] … II. To that effect and also with the aim of encouraging a balanced budget, Title I of this law introduces a direct and substantive tax on the value of electricity production, which is levied on the activities of production and incorporation of electricity into the Spanish electricity system. That tax is levied on the economic capacity of electricity producers whose installations, first, account for significant investments in the electricity transmission and distribution networks in order to be able to switch the energy which they supply to those networks and, secondly, give rise themselves or because of the very existence and development of those systems, to undeniable effects on the environment, while generating significant costs which are necessary in order to maintain the guarantee of supply. The tax applies to the production of all electricity generating installations.’ Article 1 of that law provides: ‘The [IVPEE] is a direct and substantive charge levied on the production and incorporation of electricity (net energy production) into the electricity system through each of the installations referred to in Article 4 of this law.’ Article 2 of that law, concerning the territorial scope of the IVPEE, provides that that tax is to apply throughout Spanish territory. Article 4(1) and (2) of Law 15/2012 defines the chargeable event for the IVPEE as follows: ‘1. Production and incorporation into the electricity system, including the peninsular electricity system and that of the island and non-peninsular territories, of electricity (net energy production) in any of the installations referred to in Title IV of Ley 54/1997 del Sector Eléctrico [(Law 54/1997 on the electricity sector) of 27 November 1997 (BOE No 285 of 28 November 1997, p. 35097)] constitute the chargeable event. 2. Net production, within the meaning of this law, corresponds to the energy measured at the alternator terminals, from which is subtracted the auxiliary consumption for the generation of electricity and the losses incurred up to the point of connection to the system.’ Pursuant to Article 5 of Law 15/2012: ‘Natural and legal persons and entities referred to in Article 35(4) of Ley 58/2003 General Tributaria [(Law 58/2003 on the General Tax Code) of 17 December 2003 (BOE No 302 of 18 December 2003, p. 44987)], which carry out the activities referred to in Article 4, shall be subject to this tax.’ Article 6 of Law 15/2012 provides: ‘1. The taxable amount shall be the total amount received by the taxpayer for the production and incorporation of electricity (net energy production) into the electricity system for each installation during the tax period. For this purpose, the calculation of the total amount includes the remuneration provided for in all the economic schemes arising from the provisions of Law 54/1997 of 27 November 1997 during the corresponding tax period and the remuneration provided for in the specific economic scheme for the production and incorporation of electricity into the electricity system in the island and non-peninsular territories.’ Under Article 8 of Law 15/2012, the IVPEE tax rate is 7%. Article 10 of that law provides: ‘1. Taxpayers shall be required to carry out self-assessment of the tax and pay the amount due during the month of November following the month in which the tax becomes payable … 2. Between 1 and 20 of May, September, November and February of the following year, taxpayers whose activities give rise to the taxable event must make a payment in instalments corresponding to the period of 3, 6, 9 or 12 months of each calendar year … 3. The payments in instalments shall be calculated on the basis of the value of net electricity production from the beginning of the tax period until the end of the period of 3, 6, 9 or 12 months referred to in the preceding paragraph, applying the tax rate laid down in Article 8 of this law … For that purpose, the total amount to be collected from the taxpayer for the production and incorporation of electricity (net energy production) into the electricity system for each installation during the corresponding period shall be regarded as the value of production. …’ The second additional provision of that law provides: ‘Each year, the Law on the General State Budgets provides that the electricity system costs referred to in Article 13 of Law No 54/1997 are to be financed by an amount equivalent to the sum of the following: (a) an estimate of the amounts levied annually in respect of the taxes and charges included in this law; …’ In its reply to the request for clarification sent by the Court to the referring court pursuant to Article 101 of the Rules of Procedure of the Court, the referring court indicated, as regards the remuneration of the activity of electricity production constituting the taxable amount for the IVPEE under Article 6 of Law 15/2012, that that remuneration was initially regulated in Article 16 of Law 54/1997, which was partially amended by Real Decreto-ley 9/2013 por el que se adoptan medidas urgentes para garantizar la estabilidad financiera del sistema eléctrico (Royal Decree-Law 9/2013 on urgent measures to guarantee the financial stability of the electricity system), of 12 July 2013 (BOE No 167, of 13 July 2013, p. 52106), and that that law was replaced by Ley 24/2013 del Sector Eléctrico (Law 24/2013 on the Electricity Sector) of 26 December 2013 (BOE No 310, 27 December 2013, p. 105198), which came into force on 28 December 2013. The referring court stated, in that reply, that, according to paragraph 1 of the first transitional provision of Law 24/2013, as long as the implementing rules necessary for the implementation of certain of its provisions were not adopted, the corresponding provisions of Law 54/1997 continued to apply. Therefore, as regards the years 2013 to 2016, the legislation governing the remuneration of the activity of electricity production within the meaning of Law 15/2012 was, as regards all the sections requiring implementing rules and in respect of which those rules were not adopted before the end of those years, the legislation resulting from Law 54/1997. In that regard, it is apparent from the answers given by the interested parties in the present proceedings to the questions put by the Court that the components of that remuneration provided for by Laws 15/2012 and 54/1997 are essentially the same. Under Article 14(5) to (7) of Law 24/2013: ‘5. Remuneration for the activity of production shall include the following: (a) electricity traded on the day-ahead and intraday markets. Electricity traded on the day-ahead market and intraday auction markets is remunerated on the basis of the clearing price between the supply and demand of electricity on those markets, obtained through the mechanisms established. Electricity negotiated on the bilateral, physical or futures markets shall be remunerated on the basis of the price of transactions definitively concluded on the markets in question. This component of remuneration shall be defined taking into account the losses incurred in the systems and the costs occasioned by disruption to the normal operation of the bidding system; (b) balancing services, including less frequent services and system balancing services, necessary to ensure adequate consumer supply; … (c) where appropriate, remuneration under the capacity mechanism … (d) where appropriate, the additional remuneration referred to in paragraph 6 for the activity of electricity production in the electricity systems of non-peninsular territories; (e) where appropriate, the specific remuneration referred to in paragraph 7 for the production of electricity from renewable sources, high-efficiency cogeneration and residues. 6. The government may define an additional element of remuneration to cover the difference between the investment costs and the operation of the activity of electricity production in the electrical systems of non-peninsular territories and the revenue derived from that production activity … 7. By way of exception, the Government may establish a specific remuneration scheme to encourage production from renewable energy sources, high-efficiency cogeneration and residues where there is an obligation to achieve the energy targets referred to in directives or other provisions of EU law or where the introduction of such a scheme involves a reduction in energy costs and external energy dependence … …’ The dispute in the main proceedings and the questions referred for a preliminary ruling Oliva Park submitted to the Oficina Gestora de Impuestos Especiales de Valencia (Office for the Management of Excise Duties, Valencia, Spain) a request for rectification of the IVPEE self-assessments in respect of the years 2013 to 2016 and a request for repayment in the amount of EUR 12 609.58. As those requests were not granted, Oliva Park lodged a complaint with the TEAR, which was rejected by decision of 28 September 2017. Oliva Park brought an action before the Tribunal Superior de Justicia de la Comunidad Valenciana (High Court of Justice of the Community of Valencia, Spain) against that decision. In support of its action, Oliva Park submits, inter alia, that the IVPEE is contrary to EU law, in particular Directives 2008/118, 2009/28 and 2009/72. As regards, more specifically, the alleged incompatibility of the IVPEE with Directive 2008/118, Oliva Park submits that that tax, which is additional to other taxes levied on the same goods or service, in fact constitutes an indirect tax on the production of electricity from renewable sources, with the result that it is placed at a disadvantage in relation to the production of energy from non-renewable sources, without making any distinction on the basis of intensity and environmental pollution. That company also claims that the IVPEE was not intended to effect behaviour and that it infringed market freedom and the freedom to conduct a business. For its part, the Spanish Government disputes that argument, contending that the IVPEE is a direct contribution levied on the production and incorporation of electricity into the electricity system, with no impact on the consumer, with a specific environmental objective unrelated to the polluter pays principle, since renewable energy producers are not discriminated against as regards the possibility of recovering the IVPEE costs. Thus, that tax does not infringe EU law. The referring court states that a number of reasons have led it to make a reference to the Court of Justice for a preliminary ruling. Although the IVPEE is governed as a direct tax, its nature and essential elements are specific to an indirect tax. Similarly, if officially that tax has an environmental objective it is, in essence, a tax without a specific purpose, for the collection of revenue, and not a tax on behaviour. Finally, in addition to the fact that the production of electricity from renewable sources is subject to discrimination, the IVPEE distorts the internal electricity market and infringes free competition. That court notes that, although Law 15/2012 conceived the IVPEE as a direct tax having as its object, as stated in its preamble, ‘the internalisation of environmental costs arising from the generation of electricity’, it nevertheless considers that that designation does not correspond to its true nature. In the first place, that tax takes no account of the characteristics specific to the taxpayer, the source of electricity production or the intensity of the use of the transmission and distribution systems. In the second place, unlike direct taxes, its tax base is not net income but the gross income of taxpayers, that tax being levied on all economic payments derived from the activity of production and incorporation of electricity into the system. In the third place, whereas the principle of progressivity requires that an economic operator who pollutes more pays more, the IVPEE is 7% for all taxpayers. In the fourth place, no exemption or subsidy is provided for on the basis of the use of renewable sources for the production of electricity or the impact of taxpayers’ activities on the environment. Operators producing electricity from non-renewable sources would thus be favoured. In the fifth place, the conclusion that the IVPEE is an indirect tax is borne out by the fact that the management of the collection of that tax is the responsibility of the Dependencia de Aduanas e Impuestos Especiales de la Agencia Tributaria (Customs and Excise Directorate of the Tax Authority, Spain), excise duties being, by definition, indirect taxes. In the sixth place, the tax burden imposed by the IVPEE is borne by consumers by means of the final price of electricity. Furthermore, the system of remuneration for installations producing electricity from renewable sources expressly included that tax as an operating cost to be borne by consumers. It follows, according to the referring court, that the IVPEE has the specific characteristics of a tax on consumption since its essential elements are clearly related to consumption. It is levied on electricity produced and incorporated into the electricity system for use by economic operators distinct from the producer, internal consumption for the generation of electricity and losses up to the connection point to the system being expressly excluded from the taxable amount. The referring court also considers that the IVPEE is contrary to EU law because it has no specific purpose. Despite the statement in the preamble to Law 15/2012 that the objective of that tax is the harmonisation of the Spanish tax system for the purposes of more efficient and environmentally sound use, its collection has no specific or behavioural purpose and is intended not to finance specific environmental policies but solely to collect revenue. In that regard, the levying of the IVPEE is intended to meet the very high costs necessary to maintain the guarantee of supply and, in particular, to remunerate the activities of generation, transport, distribution and marketing of electricity. Moreover, the Tribunal Supremo (Supreme Court, Spain) has held that none of the structural elements of the IVPEE reflects an environmental objective. Furthermore, the chargeable event for that tax has no connection whatsoever with the environmental objective and does not differentiate according to the environmental impact of the technology used for the production of electricity. The referring court also has doubts as to the IVPEE’s compatibility with Article 1(2) of Directive 2009/28. As the levy is not proportionate to the costs, it could have the effect of discouraging the production of energy from renewable sources. Furthermore, since the energy imported into Spain is not subject to the IVPEE, that tax favours electricity producers from other Member States and is thus the source of distortion of competition, prohibited by Article 107(1) TFEU. The creation of such an anti-competitive advantage in favour of non-national producers also affects the free movement of goods, freedom of establishment and the freedom to provide services, governed by Directive 2009/72, which requires that third party access to the network in question is ensured in an objective and non-discriminatory manner. In those circumstances, the Tribunal Superior de Justicia de la Comunidad Valenciana (High Court of Justice of the Community of Valencia) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling: ‘(1) Should Article 1(2) of Directive [2008/118] be interpreted as precluding and being incompatible with a tax such as the IVPEE, which is nominally a direct tax but which, having regard to its true nature, is actually an indirect, purely revenue-raising, tax without a specific purpose, given that the classification of the tax under national law cannot override the interpretation provided by EU law, which is governed by the objectives of EU law and reflects the objective characteristics of the tax in question? (2) In spite of the fact that it is classed as an environmental tax, is the fundamental aim of the IVPEE to raise revenue, in that activities involving the production of electricity and its incorporation into the electricity system are taxed in the same way, regardless of their intensity and environmental impact, in breach of Article 1, Article 3(1) and (2) and Article 3(3)(a) as read with Article 2(k) of Directive [2009/28]? (3) Should the principle of free competition and promotion of energy from renewable sources be interpreted as precluding the IVPEE, since it applies the same fiscal treatment to energy from non-renewable and from renewable sources, thus discriminating against the latter and breaching the support scheme established in Article 2(k) and related provisions of Directive [2009/28]? (4) Finally, do the aforementioned principle of free competition and Articles [32 to 34] of Directive [2009/72] … preclude the IVPEE, on the grounds that it permits positive discrimination in favour of non-national electricity producers, to the detriment of Spanish producers, thereby distorting the internal electricity market and access to the system?’ Consideration of the questions referred The first question By its first question, the referring court asks, in essence, whether Article 1(2) of Directive 2008/118 must be interpreted as precluding national legislation which provides for the levying of a tax on the production and incorporation of electricity into the electricity system in the national territory and the basis of assessment of which is the total income of the taxpayer resulting from the performance of those activities. As a preliminary point, it should be noted that the IVPEE is classified, in the preamble to Law 15/2012, as a direct tax on ‘the activities of producing and incorporating electricity into the electricity system’, namely the ‘economic capacity of producers of electricity’. The Spanish Government states in that regard that that tax was designed as a direct tax and that the burden of that tax cannot be passed on to the final consumer, given the functioning of the Spanish electricity market. However, the referring court, like the applicant in the main proceedings, considers that, despite that classification as a direct tax, the IVPEE constitutes, in view of its specific characteristics, an indirect tax, the fiscal burden of which is passed on to the final consumer of electricity, and falls, as such, within the scope of Article 1(2) of Directive 2008/118. In that regard, the nature of a tax, duty or charge must be determined by the Court, under EU law, according to the objective characteristics by which it is levied, irrespective of its classification under national law (judgment of 18 January 2017, IRCCS – Fondazione Santa Lucia , C‑189/15, EU:C:2017:17 , paragraph 29 and the case-law cited). Therefore, in order to answer the question referred, it is necessary to determine whether the IVPEE may be classified as an additional indirect tax on a product subject to excise duty, in this case electricity, within the meaning of Article 1(2) of Directive 2008/118. Under Article 1(1) of that directive, general arrangements are laid down in relation to excise duty which is levied directly or indirectly on the consumption of certain goods subject to excise duty, including electricity, which is covered by Directive 2003/96. Article 1(2) of Directive 2008/118 permits Member States to levy other indirect taxes on excise goods for specific purposes, provided that those taxes comply with the EU tax rules applicable to excise duty or value added tax. As is apparent from the Court’s case-law, Article 1(2) of Directive 2008/118, which seeks to take due account of the Member States’ different fiscal traditions in this regard and the frequent recourse to indirect taxation for the implementation of non-budgetary policies, allows Member States to introduce, in addition to minimum excise duty, other indirect taxes having a specific purpose. The term ‘other indirect taxes’, within the meaning of that provision, thus refers to indirect taxes which are levied on the consumption of the products listed in Article 1(1) of that directive – other than ‘excise duty’ within the meaning of that provision – and are levied for specific purposes (see, to that effect, judgment of 4 June 2015, Kernkraftwerke Lippe-Ems , C‑5/14, EU:C:2015:354 , paragraphs 58 and 59). Therefore, in order to determine whether IVPEE falls within the scope of Article 1(2) of Directive 2008/118, it is necessary to determine whether that tax is an indirect tax levied directly or indirectly on the consumption of electricity covered by Directive 2003/96 (see, by analogy, judgment of 4 June 2015, Kernkraftwerke Lippe-Ems , C‑5/14, EU:C:2015:354 , paragraph 60). In the present case, it is apparent from the documents before the Court that the chargeable event for the IVPEE is the production and incorporation of electricity into the electricity system, namely net production of energy, which is defined, for the purposes of Law 15/2012, as energy from which consumption auxiliary to the generation of electricity and the losses incurred up to the point of connection to the system are subtracted. Furthermore, it is common ground that the IVPEE is not collected directly from electricity consumers, but from the economic operators which produce it and incorporate it into the system (see, by analogy, judgment of 4 June 2015, Kernkraftwerke Lippe-Ems , C‑5/14, EU:C:2015:354 , paragraph 64). It is true that the financial burden of a tax may, in principle, be borne in its entirety by the final consumer of electricity where the producer includes the amount of that tax in the price of each amount of the product released for consumption, thus rendering the tax neutral for the producer (see, to that effect, judgment of 4 June 2015, Kernkraftwerke Lippe-Ems , C‑5/14, EU:C:2015:354 , paragraph 64). However, that is not the case here. First, as the referring court observes, there is no formal mechanism for passing on the tax. In such a situation, the fact that the application of the IVPEE led to an increase in the price of energy and, consequently, of the electricity invoice for all final consumers does not appear, in itself, to be sufficient to conclude that that tax is passed on in its entirety to those consumers. Otherwise, any tax borne by electricity producers which has even a minimal impact on the final price of electricity paid by consumers would have to be regarded as an indirect tax, within the meaning of Article 1(2) of Directive 2008/118, despite the absence of a direct and inextricable link between such a tax and the consumption of electricity. Secondly, it should be noted, as regards the detailed rules for calculating the IVPEE, that the taxable amount for that tax is the total amount received by the taxpayer for the production and incorporation of electricity into the electricity system, to which a uniform tax rate of 7% is applied. As is apparent from the documents before the Court, the calculation of that amount includes, under Article 6 of Law 15/2012, remuneration for the activity of electricity production. Under the relevant provisions of Laws 54/1997 and 24/2013, that remuneration includes electricity traded on the day-ahead and intraday markets, which is remunerated on the basis of the clearing price between supply and demand, the balancing services necessary to ensure adequate consumer supply, the remuneration for capacity mechanisms and the additional remuneration for the respective activities of electricity production in non-peninsular territories and electricity production from renewable sources. All the interested parties indicated, in their replies to the questions raised by the Court, that certain parts of the taxable amount for the IVPEE, as listed in the previous paragraph do not depend on the quantity of electricity actually produced and incorporated into the system. As the Spanish Government stated, that is particularly so in the case of balancing services, in the context of which the availability of a certain production capacity is remunerated, and capacity mechanisms, in the context of which the amount of the remuneration of the producers concerned is fixed at a certain sum of euros per megawatt and is based on the provision of a certain production capacity and on the size and production capacity of the factory, respectively. According to that government, that is also the case for specific remuneration for the production of electricity from renewable sources, high efficiency cogeneration and residues and for the production of electricity in the non-peninsular territories, for which an additional payment is provided in relation to the income on the electricity market received by the producers concerned. It follows from the foregoing considerations that the IVPEE is calculated solely in relation to the status of electricity producer, on the basis of taxpayers’ income which is partially fixed and thus irrespective of the quantity of electricity actually produced and incorporated into the electricity system. Therefore, it cannot be held that there is a direct and inextricable link between that tax and the consumption of electricity. Consequently, as the IVPEE is not an indirect tax which is levied directly or indirectly on the consumption of electricity covered by Directive 2003/96, it does not fall within Article 1(2) of Directive 2008/118 (see, by analogy, judgment of 4 June 2015, Kernkraftwerke Lippe-Ems , C‑5/14, EU:C:2015:354 , paragraph 66). In the light of the foregoing, the answer to the first question is that Article 1(2) of Directive 2008/118 must be interpreted as not precluding national legislation which provides for the levying of a tax on the production and incorporation of electricity into the electricity system in the national territory and the taxable amount of which is the total amount of income received by the taxpayer from carrying out those activities, without taking into account the amount of electricity actually produced and incorporated into that system. The second and third questions By its second and third questions, which it is appropriate to examine together, the referring court asks, in essence, whether Article 1 and Article 3(1), (2) and (3)(a) of Directive 2009/28, the latter paragraph being read in conjunction with subparagraph (k) of the second subparagraph of Article 2 of that directive, must be interpreted as precluding national legislation which provides for a tax which is levied at a single rate on the production of electricity and its incorporation into the electricity system, including where that electricity is produced from renewable sources, and which has as its objective not the protection of the environment but to increase the volume of budgetary revenue. It should be noted, in that regard, that the purpose of Directive 2009/28, as is apparent from Article 1 thereof, is to lay down a common framework for the promotion of energy from renewable sources by setting, inter alia, mandatory national targets for the overall share of energy from renewable sources in gross final consumption of energy. Thus, under Article 3(1) of that directive, Member States are required to ensure that the share of energy from renewable sources in their gross final consumption of energy in 2020 is at least the national overall target, as provided for in part A of Annex I to that directive, which must be consistent with the target of achieving, in the gross final consumption of energy in the European Union, a share of energy from renewable sources of at least 20%. Moreover, in accordance with Article 3(2) of Directive 2009/28, Member States are required to introduce measures effectively designed to ensure that the share of energy from renewable sources equals or exceeds that shown in the ‘indicative trajectory’ set out in part B of Annex I to that directive. In order to achieve those targets, Member States may, under Article 3(3)(a) of Directive 2009/28, introduce support schemes within the meaning of subparagraph (k) of the second subparagraph of Article 2 thereof, which may consist of granting investment aid, introducing tax exemptions or reductions, providing for tax refunds, or imposing an obligation to use energy from renewable sources. The referring court considers that the IVPEE is liable to have the effect of discouraging the production of electricity from renewable sources, since it affects all domestic producers and is calculated without taking production costs into account. It should be noted, in that regard, that none of the provisions of Directive 2009/28 referred to in paragraphs 62 to 65 above precludes Member States from introducing a tax, such as the IVPEE, on the production of electricity and its incorporation into the system, including when that electricity is produced from renewable energy sources (see, by analogy, judgment of 20 September 2017, Elecdey Carcelen and Others , C‑215/16, C‑216/16, C‑220/16 and C‑221/16, EU:C:2017:705 , paragraph 30). As is apparent from the wording itself of Article 3(3) of Directive 2009/28, in particular the word ‘may’, Member States are not obliged, in order to promote the use of energy from renewable sources, the adoption of support schemes or, a fortiori, if they choose to adopt such schemes, to design such schemes in the form of tax exemptions or reductions. Member States therefore have discretion as to the measures they consider appropriate to achieve the mandatory national overall targets set in Article 3(1) and (2) of that directive, read in conjunction with Annex I thereto (see, to that effect, judgments of 20 September 2017, Elecdey Carcelen and Others , C‑215/16, C‑216/16, C‑220/16 and C‑221/16, EU:C:2017:705 , paragraphs 31 and 32, and of 11 July 2019, Agrenergy and Fusignano Due , C‑180/18, C‑286/18 and C‑287/18, EU:C:2019:605 , paragraph 27). Accordingly, the possibility for Member States, as provided for in Article 3(3) of Directive 2009/28, to adopt support schemes to promote the use of energy from renewable sources, where appropriate, in the form of tax exemptions or reductions, in no way implies that they would be prevented from taxing undertakings developing such energy sources (judgment of 20 September 2017, Elecdey Carcelen and Others , C‑215/16, C‑216/16, C‑220/16 and C‑221/16, EU:C:2017:705 , paragraph 33). Consequently, the answer to the second and third questions is that Article 1 and Article 3(1), (2) and (3)(a) of Directive 2009/28, the latter paragraph being read in conjunction with subparagraph (k) of the second subparagraph of Article 2 of that directive, must be interpreted as meaning that they do not preclude national legislation providing for the levying of a tax at a single rate on the production of electricity and its incorporation into the electricity system, including where that electricity is produced from renewable sources and which does not have as its objective the protection of the environment but to increase the volume of budgetary revenue. The fourth question By its fourth question, the referring court asks, in essence, whether Article 107(1) TFEU and Articles 32 to 34 of Directive 2009/72 must be interpreted as precluding national legislation which provides for the levying of a tax on the production and incorporation of electricity into the electricity system in the territory of a Member State, where that tax is not applied to the introduction into that system of electricity produced in other Member States. The referring court states, in that regard, that the IVPEE favours electricity producers established in other Member States, since it affects only national producers, and concludes that competition is distorted, in breach of Article 107(1) TFEU. In so far as it is apparent from the answer to the first question that the IVPEE is a direct tax on the activity of production and incorporation of electricity into the electricity system, it should be recalled that, whilst it is true that direct taxation falls within their competence, the Member States must nonetheless exercise that competence consistently with EU law (judgment of 22 December 2010, Tankreederei I , C‑287/10, EU:C:2010:827 , paragraph 14). In the first place, as regards, Article 107(1) TFEU, it is clear from the settled case-law of the Court that taxes do not fall within the scope of the provisions of the FEU Treaty relating to State aid unless they constitute the method of financing an aid measure, so that they form an integral part of that measure (judgment of 20 September 2018, Carrefour Hypermarchés and Others , C‑510/16, EU:C:2018:751 , paragraph 14 and the case-law cited). In the present case, it is not apparent from the documents before the Court that the revenue from the levying of the IVPEE constitutes the method of financing a State aid measure, within the meaning of that case-law. It follows that that tax cannot be regarded as falling within the scope of the provisions of the FEU Treaty on State aid. As regards, in the second place, Directive 2009/72, it should be noted that Articles 32 to 34 of that directive refer to the general principle of non-discrimination in the field of the internal market in electricity by regulating third party access to the system in an objective and non-discriminatory manner. In the present case, the referring court states that the IVPEE legislation allows positive discrimination in favour of non-national electricity producers, to the detriment of Spanish producers, thereby distorting the internal market in electricity and access to the system. It is sufficient, in that regard, to note that, in so far as Directive 2009/72 is not a measure for the approximation of the Member States’ fiscal provisions, the principle of non-discrimination referred to in Articles 32 to 34 of that directive does not apply to national legislation establishing a tax on the production and incorporation of electricity into the electricity system in the territory a Member State (see, by analogy, judgment of 7 November 2019, UNESA and Others , C‑80/18 to C‑83/18, EU:C:2019:934 , paragraph 51). In the light of those considerations, the answer to the fourth question is that Article 107(1) TFEU and Articles 32 to 34 of Directive 2009/72 must be interpreted as not precluding national legislation which provides for the levying of a national tax on the production and incorporation of electricity into the electricity system in the territory of a Member State, where that tax is not applied to the incorporation into that system of electricity produced in the other Member States. Costs Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable. On those grounds, the Court (Tenth Chamber) hereby rules: 1. Article 1(2) of Council Directive 2008/118/EC of 16 December 2008 concerning the general arrangements for excise duty and repealing Directive 92/12/EEC must be interpreted as not precluding national legislation which provides for the levying of a tax on the production and incorporation of electricity into the electricity system in the national territory and the taxable amount of which is the total amount of income received by the taxpayer from carrying out those activities, without taking into account the amount of electricity actually produced and incorporated into that system. 2. Article 1 and Article 3(1), (2) and (3)(a) of Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC, the latter paragraph being read in conjunction with subparagraph (k) of the second subparagraph of Article 2 of that directive, must be interpreted as not precluding national legislation providing for the levying of a tax at a single rate on the production of electricity and its incorporation into the electricity system, including where that electricity is produced from renewable sources and which does not have as its objective the protection of the environment but to increase the volume of budgetary revenue. 3. Article 107(1) TFEU and Articles 32 to 34 of Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC must be interpreted as not precluding national legislation which provides for the levying of a national tax on the production and incorporation of electricity into the electricity system in the territory of a Member State, where that tax is not applied to the incorporation into that system of electricity produced in the other Member States. [Signatures] * Language of the case: Spanish. © European Union The source of this judgment is the Europa web site. The information on this site is subject to a information found here: Important legal notice . This electronic version is not authentic and is subject to amendment. BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII