The Talent for the Future initiative proposes an energy tax reform that reduces taxes on electricity, ends subsidies for fossil fuels and stops penalizing renewable energies. This request was born after a survey of 8,000 young people (16-30 years old), to investigate the concerns of youth about energy in this period of transition towards non-polluting energy. It was presented to legislators at the beginning of October and the resulting report calls for the electrification of demand (industry, mobility and heat pumps) to reduce gas and oil consumption and advocates the deployment of electrical networks, for electricity storage and green taxation.
This last point is the most relevant, since, among the initiatives with the most support in the survey of young people, green taxation stands out (56%) and promoting storage to reduce energy dependence and take advantage of all renewable energy production (49 %), in second place.
The report is divided into seven points. Firstly, apply green taxation that favors the use of clean energy and penalizes polluting sources, guaranteeing a fiscal framework that encourages decarbonization and makes the energy transition more accessible for all sectors of society. In addition, establish a border carbon adjustment to avoid unfair competition from products imported from countries with less strict regulations, guaranteeing that products entering the European market meet the same emissions standards as those manufactured in the EU. Another essential aspect is the reduction of VAT on electricity to 5% for consumers, as a basic need in an economy in energy transition. And reduce the Special Tax on Electricity (IEE) to the minimum allowed by the EU (0.5%), since its origin was to subsidize coal (it has not been incentivized since 2015).
They also demand the elimination of the Tax on the Value of Electrical Production (7%), only applied to the electricity sector, penalizing electricity compared to other fossil sources. And reintroduce the National Fund for the Sustainability of the Electrical System, to distribute the costs of renewables among the entire energy system, not just electricity. Finally, it includes establishing a carbon credit system for the industry, encouraging decarbonization and electrification through transparent and competitive long-term energy prices, promoting the adoption of clean technologies.
here and now
The figures describe the importance and urgency of these changes. Using data from 2023, the price of electricity was 0.29 euros/kWh, while gas is still much cheaper, at 0.13 euros. This large difference reflects a tax policy that favors gas, with 65% subsidies compared to 25% for electricity, according to data from a recent study by the European electricity employers’ association, Eurelectric. Despite the efforts of the European Union (EU) to reduce dependence on fossil fuels and move towards electrification, this disparity puts at risk meeting climate objectives (gas prices remain much more attractive for residential consumers and industrial).
The focus on the energy transition has been one of the pillars of the European Green Deal, and although there is progress, current tax policies slow progress towards a cleaner future. While electricity, especially that from renewable sources, should be encouraged as a long-term solution; Gas, cheaper and subsidized, continues to occupy a prominent place in the European energy mix. This has implications not only for households, but also for the industrial sector, making further electrification of society difficult.
The report reveals that 89% of young people consider the energy transition crucial to combat the climate emergency. Participants are committed to increasing the production of renewable energy and promoting sustainable mobility. 90% believe that public policies are decisive in the energy transition, 79% believe that legislation should be more ambitious and 74% feel that their voice is not heard enough in energy decisions. The young people surveyed identify the interests linked to fossil fuel companies and the lack of political agreements as the main brakes on the transition.
‘The Future is Energy’
The document presented addresses the proposals derived from the ‘The Future is Energy’ project, focused on the transition towards a more sustainable and equitable energy model, which is complemented by a forum of experts that included representatives of civil society, unions, industry and the legislator. The objective was to analyze how to align citizen demands, especially youth, with the technical realities of the energy sector. Thus, he highlights other initiatives to advance electrification in Europe:
1. Increase in renewable energy production. It is suggested to reduce dependence on fossil fuels, facilitate the electrification of industrial processes and expedite permits for renewable projects, as well as invest in green hydrogen and energy storage.
2. Modernization of electrical networks. The reinforcement and expansion of electrical infrastructures are key to integrating the growing production of renewable energies and guaranteeing the stability of the system.
3. Energy efficiency and thermal insulation. The rehabilitation of buildings and the replacement of polluting technologies, such as gas boilers, with clean solutions such as heat pumps are proposed.
4. Sustainable mobility. The proposals include the promotion of electric vehicles, the creation of a network of charging points and the promotion of public and rail transport as alternatives to short flights.
5. Just transition. The transition is intended to be inclusive, with subsidies for vulnerable households and credits to adopt clean technologies.
The document, therefore, proposes a series of proposals to accelerate the energy transition, balancing sustainability with social justice and promoting citizen participation.
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