Opinion of Advocate General Sharpston (On request for preliminary ruling from Gerechtshof ’s-Hertogenbosch (Netherlands))

Advocate General Sharpston was asked for guidance as to the meaning of the term ‘dual use’ in the second indent of Article 2(4)(b) in relation to sugar production and lime fertilizer, the by-product arising from that process, of the Directive 2003/96/EC, which introduced a regime imposing minimum harmonized levels of taxation on all energy products and electricity. The referring court also asked whether national legislators are constrained by an EU concept of what constitutes dual use if they choose to introduce domestic measures in order to tax such energy products. The Advocate General answered that ‘dual use’ within the meaning of Article 2(4)(b) refers to where coal is used as heating fuel in a lime-kiln in order to generate carbon dioxide for the production of lime-kiln gas, which is subsequently used for the purification of the raw juice obtained from sugar beets, that process giving rise to the by-product earth foam. The Advocate General found that Member States may apply a more restrictive definition of dual use and choose to tax dual use energy products, provided they exercise their competence consistently with EU law. If a Member State chooses to apply such a narrower definition, a taxpayer cannot invoke a broader EU concept of dual use in order to obtain exoneration from a charge to tax imposed under national law.