The IEA recommends Spain to raise fuel taxes

The IEA has recommended that Spain raises fuel taxes as the increase on gasoline and diesel for automotive use would be on the grounds that increases would lower the international consumption average, because low prices do not encourage reduced consumption.

This is reflected in a report on Spain’s energy policy of the IEA presented today by the agency’s director, Nobuo Tanaka, who also praises the Spanish commitment to renewable energies, and he praised the electric deregulation. Before presenting the report, which was attended by Secretary of State, Pedro Marín, Tanaka presented the document to the Industry Minister Miguel Sebastian.

Tanaka said the energy challenge, in all countries, is to reduce CO2 emissions, what is needed is for countries to reduce “dramatically” fossil fuel consumption, and at the same time ensuring security of supply.

In the case of Spain, he said, electricity generation and transport are the major emitters of CO2. In this context, Tanaka recommended that the Spanish executive increase taxes on motor fuels because they are less than those of other neighbouring countries, and because low prices do tend to increase demand.

In his view, if the government wants to overcome the pressure of social groups that would oppose a tax increase on oil, the tax increase should be such that is “revenue-neutral.”

Moreover, the director of the IEA said that for the transition to low energy carbon emissions it is important to make “large investments,” for which, in turn, it is “crucial” that there is a stable regulatory framework. Regarding nuclear energy, Tanaka found it difficult to reconcile the progressive disappearance of the plants to the achievement of the objectives of combating climate change and security of supply, but stressed that the commitment to this type of energy should be decided by each country. “Nuclear power is not the only solution, but is a necessary response to climate change and energy security,”

In its report, the IEA said they were “impressed” by the energy development that has taken place in Spain since 2005 and its commitment to renewable energy as exemplary, especially wind power.

Tags:  fuel, IEA, Spain, taxes