Ettepanek - COM(2026) 285

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EUROPEAN COMMISSION

Brussels, 15.6.2026

COM(2026) 285 final

2026/0153 (NLE)

Proposal for a

COUNCIL IMPLEMENTING DECISION

authorising Croatia to apply reduced rates of excise duty to gas oil and unleaded petrol

used as motor fuels, pursuant to Article 19 of Directive 2003/96/EC

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EXPLANATORY MEMORANDUM

1. CONTEXT OF THE PROPOSAL

• Reasons for and objectives of the proposal

Taxation of energy products and electricity in the Union is governed by Council Directive

2003/96/EC of 27 October 2003 restructuring the Community framework for the taxation of

energy products and electricity1 (the ‘Energy Taxation Directive’ or the ‘Directive’).

Pursuant Article 19(1) of the Directive, in addition to the provisions laid down in particular in

Articles 5, 15 and 17, the Council, acting unanimously on a proposal from the Commission,

may authorise any Member State to introduce further exemptions or reductions in the level of

taxation for specific policy considerations.

By letter dated 2 April 2026, the Croatian authorities informed the Commission of their

intention to apply for an authorisation to apply a temporary reduction of the national tax rates

for unleaded petrol and gas oil used as motor fuels, which go below the minimum levels of

taxation as laid down in Article 7 and Table A of Annex I to the Directive.

By emails dated 29 April 2026 and 7 May 2026 the Croatian authorities replied to additional

information requests from the European Commission.

The requested reduction is 0.2195 EUR per litre for unleaded petrol and 0.225 EUR per litre

for gas oil used as motor fuels.

The requested period of validity is for a period of 6 months starting as soon as the decision is

adopted by the Council, which is within the maximum period allowed by Article 19(2) of the

Energy Taxation Directive.

According to the Croatian authorities, the aim of the measure is to alleviate the high retail

prices of gas oil and petrol in the country, resulting from the recent geopolitical

developments, and directly affecting both households and companies.

In response to the 2022 energy crisis, as a result of the Ukraine war, three derogations from

the Energy Taxation Directive were granted to Member States with the objective to mitigate

the high retail fuel prices resulting from the geopolitical developments at the time and directly

affecting both households and companies.2

In its conclusions of 19 March 2026, the European Council underlined that the energy

transition remains the most effective strategy for achieving Europe’s strategic autonomy,

strengthening resilience, structurally lowering energy prices, and delivering the clean,

abundant and homegrown energy needed to power the economy of the future.

At the same the European Council recognised that targeted solutions are needed in the short

term to ensure affordable energy, taking into account technological neutrality and the specific

situations of Member States, the particular exposure of certain industrial sectors to the risk of

relocation, and the need to improve the conditions for energy-intensive innovative sectors,

without undermining predictability and the level playing field.

1 OJ L 283, 31.10.2003, p. 51–70. 2 Council implementing decision (EU) 2022/1843, Council implementing decision (EU) 2022/1662,

Council implementing decision (EU) 2023/1197.

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In view of this, the European Council called on the Commission to present without delay a

toolbox of targeted temporary measures to address the recent spikes in the prices of imported

fossil fuels arising from the crisis in the Middle East. The European Council Conclusions

provide political guidance from the Member States and constitute a political mandate to adopt

fiscal measures allowing for the requested flexibilities. These Conclusions clearly advocate

for the full utilisation of the derogations and flexibilities foreseen in the Energy Taxation

Directive, including the adoption of temporary reduced rates, carefully linked to the

extraordinary circumstances and the objectives of energy affordability.

The objectives of such measures would be to enable Member States to develop targeted and

temporary solutions to deal with the negative impact of the current energy crises on prices.

These are needed in the short term to ensure affordable energy, taking into account

technological neutrality and the specific situations of Member States, the particular exposure

of certain industrial sectors to the risk of relocation, and the need to improve the conditions

for energy-intensive innovative sectors, without undermining predictability and the level

playing field.

Since the outbreak of the conflict on 28 February 2026 and the ensuing disruption of the Strait

of Hormuz the oil price (Brent) has risen from around 60 EUR/barrel to more than 90

EUR/barrel3. Following this price hike, the average fuel prices in Croatia were reported as

follows:4

Petrol (Super 95)

Gas oil

30/03/26 €1.68 €1.88

23/03/26 €1.57 €1.69

16/03/26 €1.55 €1.67

09/03/26 €1.50 €1.54

02/03/26 €1.48 €1.51

23/02/26 €1.47 €1.49

16/02/26 €1.46 €1.50

Looking at the energy prices development of oil within the period of this derogation, prices

are expected to continue to be elevated. After that, expectations depend heavily on the

duration of the conflict in the Middle East and the the disruption of the Strait of Hormuz.

Oil prices are expected to remain elevated while the conflict and the disruption of the Strait of

Hormuz is ongoing. The fuel prices follow the dynamics of crude oil price with a delay of a

week or two, with the distinction that gasoline prices tend to react less directly to oil prices,

while diesel and jet fuel that EU is importing tend to be more volatile than crude oil prices.

The global nature of oil prices and the limited influence Member States have on those prices,

makes this crisis an exogenous crisis. All EU Member States will be subject to similar global

prices for energy products. The ability to cope with price increases will, however, differ

significantly, for instance dependant on income, transport mode, heating source and the

energy efficiency of housing. This will make effects of price increases asymmetrical.

Additionally, lower income households tend to spend a larger part of their income on

3 DG ENER, Weekly oil bulletin, 2 April 2026, https://energy.ec.europa.eu/data-and-analysis/weekly-oil-

bulletin_en. 4 DG ENER, Weekly oil bulletin, 2 April 2026, https://energy.ec.europa.eu/data-and-analysis/weekly-oil-

bulletin_en.

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consumption, instead of investments or savings. This makes increases in consumption prices

more impactful for lower income households.

Since the outbreak of the war on 28 February 2026 and the resulting increase in energy prices,

the Government of the Republic of Croatia adopted, on 10 March 2026, an amendment to the

Regulation on Excise Duty on Energy and Electricity, with the aim of mitigating the increase

in the retail price of energy products. This amendment reduced the excise duty on gas oil used

as motor fuel by EUR 0.02 per litre.

At the same time, through the Regulation on Determining the Maximum Retail Price of

Petroleum Products, the Government introduced a cap on the retail prices of energy products

by limiting trade margins, setting a maximum premium for energy undertakings of EUR

0.1735 per litre for both unleaded petrol and gas oil used as motor fuels.

As the war continued and energy prices on the international market increased further, the

Government of the Republic of Croatia adopted, on 24 March 2026, a second amendment to

the Regulation on Excise Duty on Energy and Electricity. This amendment reduced the excise

duty on unleaded petrol by EUR 0.06 per litre and gas oil used as motor fuel by EUR 0.07613

per litre.

In addition, the premiums for energy undertakings were further reduced, to EUR 0.1545 per

litre for unleaded petrol and EUR 0.1245 per litre for gas oil used as motor fuels.

Despite the above measures, retail prices of energy products remain significantly higher than

those observed prior to the outbreak of the war in the Middle East. As of 24 March 2026, the

retail price of unleaded motor petrol was 12% higher compared to 24 February 2026 (i.e.

before the outbreak of the conflict), while the retail price of diesel fuel was 19% higher over

the same period.

As a result of the above amendments, the currently applicable excise duty on gas oil used as

motor fuel has reached the minimum level laid down by EU law. Consequently, the

Government of the Republic of Croatia no longer has scope to further reduce retail prices

through additional reductions in excise duty on gas oil used as motor fuel, while for unleaded

petrol a margin for further reduction remains, amounting to EUR 0.09331 per litre.

In this context, it should be noted that in 2025, the quantities of energy products released for

consumption for propulsion purposes in the Republic of Croatia were predominantly

composed of diesel fuel, which accounted for 77% of total consumption. This highlights the

particularly significant impact of retail diesel fuel prices on the social and economic

conditions of citizens, as well as on the functioning of the economy.

Due to its specific geographical characteristics and insufficiently developed railway

infrastructure, the Republic of Croatia is highly dependent on road transport for both

passengers and goods, as well as on the use of private cars and buses for daily commuting.

• Consistency with existing policy provisions in the policy area

Article 19(1), first subparagraph of the Directive reads as follows:

‘In addition to the provisions set out in the previous Articles, in particular in Articles 5, 15

and 17, the Council, acting unanimously on a proposal from the Commission, may authorise

any Member State to introduce further exemptions or reductions for specific policy

considerations.’

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By means of the tax reduction in question, the Croatian authorities intend to mitigate the high

retail prices of transport fuels, gas oil and petrol triggered by the conflict in the Middle East

and ultimately pursue the objective to reduce the social and economic impacts of the current

geopolitical situation affecting both households and companies.

These tax reductions would lead to a situation where beneficiaries would be charged with

national rates, which can fall below the EU minimum tax rates under the Energy Taxation

Directive, hence the authorisation under discussion. This can contribute to the stated policy

objectives.

The possibility to introduce such a tax reduction can be envisaged under Article 19 of the

Directive since its purpose is to allow Member States to introduce further exemptions or

reductions for specific policy considerations.

The limited period of validity of the authorisation of 6 months after the Council Implementing

Decision takes effect, is within the maximum period allowed by Article 19(2) of the Energy

Taxation Directive, with the possibility of renewal.

Finally, the tax reduction is not cumulative with any other sorts of tax reduction.

Under these circumstances, it appears appropriate to grant the authorisation for the requested

period.

At the same time, untargeted tax reductions imply significant fiscal costs and tend to increase

fossil fuel demand, thereby exacerbating the imbalance of supply and demand. Therefore, the

measure should remain strictly limited in time and its expected impact on fossil fuel demand

as well as its fiscal cost should be assessed. Where needed, compensatory measures should be

taken.

State aid rules

The temporary tax reduction requested by the Croatian authorities will go below the minimum

levels of taxation of transport fuels as laid down in Article 7 and Table A of Annex I to the

Directive by 0.2195 EUR per litre for unleaded petrol and 0.2250 EUR per litre for gas oil

used as motor fuels.

The present proposal is without prejudice to any assessment of the Croatian measure under

State aid rules. Moreover, the proposal for a Council implementing decision does not prejudge

the Member State’s obligation to ensure compliance with State aid rules.

• Consistency with other Union policies

Each draft derogation under Article 19 of the Energy Taxation Directive must be examined by

the Commission taking into account the proper functioning of the internal market, the need to

ensure fair competition and EU health, environment, energy and transport policies.

According to the Croatian authorities, the envisaged tax reduction should partially alleviate

the social and economic burden of the Croatian population due to the recent transport fuels

price increase resulting also from the conflict in Iran and the disruption in the Strait of

Hormuz.

As a result of this exceptional situation, this temporary measure is not likely to affect intra-EU

trade. Overall, the measure seems acceptable from the point of view of the proper functioning

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of the internal market and the need to ensure fair competition. Given its limited effects and the

limited duration, the measure should not distort competition or hinder the functioning of the

internal market.

Environmental and climate policy

The Union remains firmly committed to its climate and energy objectives, as stated in the

European Climate Law (Regulation 2021/1119). The temporary tax reductions allowed by this

act should not lead to a structural weakening of price signals that encourage energy efficiency

and the transition to renewable energy sources.

Energy policy

Given the scale of the current energy price spike resulting from the situation in the Middle

East, Member States require an ability to temporarily lower the excise rates below the EU

minimum rates for products not covered by the above provision.

Given its short duration and the current exceptional circumstances linked to the geopolitical

situation coupled with an exceptionally high market price of energy products, an ability to

reduce excise rates below minimum rates established under Directive 2003/96/EC is

considered adequate and proportionate to the need to balance out the specific policy

objectives listed in Article 19 of the Energy Taxation Directive, and notably the EU’s

environmental policy with the emergency imperative to ensure energy affordability for

businesses and households.

Internal market policy and fair competition

As a result of the exceptional situation, this temporary measure is not likely to affect intra-EU

trade. Overall, the measure seems acceptable from the point of view of the proper functioning

of the internal market and the need to ensure fair competition. Given its limited effects and the

limited duration, the measure should not distort competition or hinder the functioning of the

internal market.

Social policy

The observed and expected increase in the cost of energy across the Union has a

disproportionate impact on low-income households given that energy costs generally

constitute a larger share of their budgets5. Reductions in excise duties on energy products can

therefore have a positive social impact by contributing to reducing energy costs for low-

income households.

2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

• Legal basis

Article 19 of Council Directive 2003/96/EC.

• Subsidiarity (for non-exclusive competence)

The field of indirect taxation covered by Article 113 of TFEU is not in itself within the

exclusive competence of the European Union within the meaning of Article 3 of TFEU.

5 Economic and distributional effects of higher energy prices on households in the EU - Employment,

Social Affairs and Inclusion

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However, pursuant to Article 19 of Directive 2003/96/EC, the Council has been granted an

exclusive competence, as a matter of secondary law, to authorise Member States to introduce

further exemptions or reductions within the meaning of that provision. Member States cannot

therefore substitute themselves for the Council. As a result, the principle of subsidiarity is not

applicable to the present implementing decision. In any event, since this act is not a draft

legislative act, it should not be transmitted to national Parliaments pursuant to Protocol No 2

to the Treaties for review of compliance with the subsidiarity principle.

• Proportionality

The proposal respects the principle of proportionality. The tax reductions do not exceed what

is necessary to attain the objective in question.

The authorisation is for a very limited period of time, namely for 6 months, and in an energy

crisis context.

• Choice of the instrument

The instrument proposed is a Council implementing decision. Article 19 of Directive

2003/96/EC makes provision for this type of measure only.

3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER

CONSULTATIONS AND IMPACT ASSESSMENTS

• Ex-post evaluations/fitness checks of existing legislation

The measure does not require the evaluation of existing legislation.

• Stakeholder consultations

This proposal is based on a request made by Croatia and concerns only this Member State.

• Collection and use of expertise

There was no need for external expertise.

• Impact assessment

This proposal concerns an authorisation for an individual Member State upon its own request

and does not require an impact assessment. In line with better regulation rules these types of

acts are not subject to an impact assessment, by their nature.

• Regulatory fitness and simplification

The measure does not provide for a simplification. It is the result of the request made by

Croatia and concerns only this Member State.

• Fundamental rights

The measure has no bearing on fundamental rights.

4. BUDGETARY IMPLICATIONS

The measure does not impose any financial or administrative burden on the Union. The

proposal therefore has no impact on the budget of the Union.

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5. OTHER ELEMENTS

• Implementation plans and monitoring, evaluation and reporting arrangements

An implementation plan is not necessary. This proposal concerns an authorisation for a tax

reduction, which is provided for a limited period of time. The applicable tax rates can fall

below the minimum levels of taxation set by the Energy Taxation Directive. The measure can

be evaluated in case of a proposal to extend the validity of this Decision.

• Explanatory documents (for directives)

The proposal does not require explanatory documents on the transposition.

• Detailed explanation of the specific provisions of the proposal

Article 1 stipulates that Croatia will be allowed to apply reduced taxation rates to gas oil and

unleaded petrol used as motor fuels, below the minimum levels of taxation.

Article 2 stipulates that the authorisation requested is granted for 6 months after the entry into

force of the Decision, as requested by Croatia, within the maximum period of 6 years allowed

by the Directive.

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2026/0153 (NLE)

Proposal for a

COUNCIL IMPLEMENTING DECISION

authorising Croatia to apply reduced rates of excise duty to gas oil and unleaded petrol

used as motor fuels, pursuant to Article 19 of Directive 2003/96/EC

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Council Directive 2003/96/EC of 27 October 2003 restructuring the

Community framework for the taxation of energy products and electricity1, and in particular

Article 19 thereof,

Having regard to the proposal from the European Commission,

Whereas:

(1) In the weeks preceding the adoption of this Decision, sharp and persistent increases in

wholesale and retail prices of energy products have been observed across the Union,

triggered by the geopolitical developments in the Middle East, which impacted supply

chains of oil and oil products globally. These developments have had significant

adverse effects on households, in particular vulnerable consumers, and on

undertakings, including small and medium‑sized enterprises, thereby posing a serious

risk to social cohesion, economic stability and the proper functioning of the internal

market.

(2) In its Conclusions of 19 March 2026,2 the European Council recognised the

extraordinary nature of the energy market situation and its macroeconomic

implications. The Council invited the European Commission to work closely with

Member States to design national temporary and targeted measures, to mitigate

significant impacts of fuel price increases due to the crisis in the Middle East, and

underlined in particular the need for a coordinated response as the conflict in the

Middle East has an immediate impact on energy prices for European citizens and

businesses.

(3) Excise duties as established by Directive 2003/96/EC contribute to the final cost of

energy products supplied within the Union. A reduction in excise duties below the

minimum rates can mitigate some of the energy cost increases currently experienced

by Member States,

(4) The flexibilities provided by Directive 2003/96/EC enables Member States, within

defined limits, to lower the tax burden on specific energy products in a targeted and

temporary manner. In view of the exceptional and urgent nature of the current

situation, it is necessary to provide for specific, time‑limited flexibilities explicitly

aimed at alleviating the impact of the energy price shock.

1 OJ L 283, 31.10.2003, p. 51, ELI: http://data.europa.eu/eli/dir/2003/96/oj. 2 https://www.consilium.europa.eu/media/lwhk3itd/en-20260319-european-council-conclusions.pdf

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(5) Temporary reductions in the taxation of targeted energy products can deliver rapid

relief to households and undertakings by directly lowering end‑user prices. In the

current situation, such extraordinary reductions are a suitable and necessary instrument

to address the serious disturbance in the economy resulting from the energy price

shock.

(6) By letter dated 2 April 2026, the Croatian authorities requested authorisation, pursuant

to Article 19 of Directive 2003/96/EC, to apply reduced rates of excise duty to gas oil

and unleaded petrol used as motor fuels which fall below the minimum levels of

taxation applicable to motor fuel referred to in Article 7 of that Directive by 0.2195

EUR per litre for unleaded petrol and 0.225 EUR per litre for gas oil. The

authorisation was requested for a period of 6 months.

(7) According to the Croatian authorities, the application of a reduced rate of excise duty

aims to mitigate the impact of high retail prices of petrol and gas oil resulting from the

geopolitical situation and directly affecting both households and companies.

(8) The requested authorisation has been reviewed by the Commission and been found

unlikely to hinder the proper functioning of the internal market. Given its short

duration and the exceptional circumstances linked to the geopolitical situation coupled

with an exceptionally high market price of oil, the requested derogation has been

found to be adequate and proportionate considering the need to strike a balance

between the specific policy objectives listed in Article 19(1) of Directive 2003/96/EC,

and in particular the Union environmental policy and the emergency imperative to

ensure energy affordability for businesses and households.

(9) Croatia should therefore be authorised to temporarily apply reduced rates of excise

duty below the minimum Union levels to unleaded petrol and gas oil used as motor

fuels.

(10) In accordance with Article 19(2) of Directive 2003/96/EC, each authorisation granted

under that provision is to be strictly limited in time. However, in order not to

undermine future developments of the existing legal framework, it is appropriate to

provide that, should the Council, acting on the basis of Article 113 or any other

relevant provision of the Treaty on the Functioning of the European Union, introduce

new minimum levels of taxation as referred to in Article 7 of Directive 2003/96/EC for

gas oil and unleaded petrol used as motor fuels to which this authorisation would not

be adapted, this authorisation should cease to apply.

(11) At the same time, untargeted tax reductions imply significant fiscal costs and tend to

increase fossil fuel demand, thereby exacerbating the imbalance of supply and

demand. Therefore, the measure should remain strictly limited in time.

(12) This Decision is without prejudice to the application of Union rules regarding State

aid,

HAS ADOPTED THIS DECISION:

Article 1

Croatia is authorised to apply a reduction of up to 0.2195 EUR per litre for unleaded petrol

used as motor fuels and up to 0.225 EUR per litre for gas oil used as motor fuels below the

minimum rates of excise duty referred to in Article 7 of Directive 2003/96/EC.

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Article 2

This decision shall apply for [6 months after the day of the notification].

However, in the event that the Council, acting on the basis of Article 113 or any other relevant

provision of the Treaty on the Functioning of the European Union, modifies the minimum

levels of taxation as referred to in Article 7 of Directive 2003/96/EC for gas oil and unleaded

petrol used as motor fuels with which the authorisation granted in Article 1 of this Decision

would not be compatible, this Decision shall cease to apply on the day on which that modified

minimum levels of taxation become applicable.

Article 3

This Decision shall take effect on the date of its notification.

Article 4

This Decision is addressed to the Republic of Croatia.

Done at Brussels,

For the Council

The President