to make sure that industries receiving sops in 'energy use tax' contribute towards environmental protection, the European Commission (EC) -- which acts as a competition authority for European Union (EU) countries -- has asked Germany to change its eco-tax system. The EC move comes in the wake of Germany's request to the Commission to approve a scheme by which big energy users get an 80 per cent tax exemption over a 10-year period.
However, under the present rules, the scheme was unacceptable to EU. Its rules discourage member countries from giving companies or industry sector concessions in tax that could provide them an unfair edge over their competitors. The EU says that the scheme could be made acceptable if companies in the energy intensive sectors that benefit, such as steel, mining and chemicals, made efforts to improve the environment. "In return for tax exemption, these companies also have to make an effort to protect environmental degradation," says an EU spokesperson.