Research Projects

The Center on International Commercial Arbitration through Adjunct Professor Björn Arp, participates in a three-year research project funded by the Spanish Ministry of Economy and Competitiveness (2013-2016). The title of the project is Energy Taxation in Spain: Current Situation and Possibilities of Reform as an Instrument of Environmental and Energy Policy. The principle researcher is Professor Enrique Ortiz Calle from the Carlos III University in Madrid (Spain).

The scientific literature in Spain unanimously demands a profound reform of the Spanish tax system. One of the central points of this quest for change is energy taxation. Energy taxation should be articulated within a coherent energy policy framework based on sustainable resource management. Energy taxation should not only help raising revenues for the State, but also take into account other objectives and values. These may include such constitutional values as affordable energy pricing, efficiency, and competitiveness, as well as the protection of the environment.

The researchers that form the team for this research topic will study three different perspectives of the research topic:

(a) Taxation as an instrument of energy and environmental policy

European Union Directive 2003/96/CE provides that the main objectives of energy policy are to ensure supply within certain minimum parameters of safety and quality, and to contribute to the competitiveness and the protection of the environment. These objectives are summarized in the idea of sustainable development. Adequate energy taxation requires taking into account these objectives when levying taxes on companies operating in the sector (including all phases, from the generation to commercialization), and in regard to taxation of energy consumers (private individuals and companies, including the taxation on emissions for the latter). Hence, the project studies how to incorporate these elements into the Spanish tax system.

(b) The role of energy taxation as an element of the overall tax system

Some currently levied taxes, such as hydrocarbons and electricity taxes, are stable revenue sources for Spanish public finances. Some foreign States have most recently reformed their tax systems, reducing the tax burden from work-related income and increasing the burden on energy producers. The criteria used for the increased energy taxation are based on consumption, emissions, and the energy producer’s efforts in terms of sustainability. This research studies the options and challenges for a “green tax reform” in Spain, including the promotion of the use of renewable energies. The study also takes into account the risks and consequences of an abrupt policy change in energy policy, in light of Spain’s international obligations to protect foreign direct investment.

(c) Energy taxation in a decentralized system of territorial public treasuries

This section of the research focuses on the role of the three tax powers in Spain, i.e. the central government, the autonomous communities, and local entities. Each of these territorial entities has individual tax powers. However, in order to attain the above-mentioned objectives of a sustainable energy policy, these different levels of public administration have to be adequately coordinated.

For more information contact Bjorn Arp at