The Swedish tax rules for electricity production in breach of EU tax law

Abstract: This thesis examines the way in which Sweden opted to set up its taxation on the supply of energy from renewable sources and whether they are in line with EU tax law. Windmills in Sweden are granted a lower-rate tax than other sources of renewable energy production, which is stated to be within the scope of the de minimis Regulation. Firstly, the thesis starts by examining what State aid is, looking at Articles 107 and 108 TFEU, as well as what it prohibits. After doing so, the thesis explores derogations from the general rules of State aid, such as the de minimis Regulation. Secondly, the thesis then explores other permissible measures which, at face value, would go against State aid rules, but are permissible due to the nature or objectives they aim to achieve. These objectives are primarily focused on sustainable development and Member States transitioning towards green and renewable energy. Finally, the thesis then looks at what happened in Sweden while bearing in mind what is or is not permissible with respect to the previous two chapters, in order to conclude whether the energy taxation in Sweden is in breach of EU tax law or not, which it ultimately finds that it is, as it does not follow all the conditions laid out within the de minimis Regulation and as such constitutes a form of illegal State aid.