Italy - Self-Generated Electricity and Energy Products Used on Offshore Platforms within the EU

Introduction

Until 1 January 2025, former Article 132 of Presidential Decree No. 43 of 23 January 1973 (TULD) allowed certain domestic products to be treated as definitive exports, meaning they were not subject to excise duty or VAT.

This treatment applied to:

·       Domestic products consumed at sea outside the customs territory during activities related to the prospecting, exploration, and exploitation of underwater hydrocarbon deposits, and

·       Domestic products temporarily stored at onshore operating bases of companies engaged in these activities prior to shipment offshore.

Following the entry into force of Legislative Decree No. 141 of 26 September 2024, Article 132 TULD was repealed.

As a result, the previous “definitive export” classification no longer applies, creating a procedural distinction between excise duty and VAT treatment.

Products falling within the excise regime are now fully governed by Legislative Decree No. 504 of 26 October 1995 (Consolidated Excise Act – TUA).

Energy Products

On 4 March 2025, the Italian Customs and Monopolies Agency published a notice clarifying the applicable rules.

The main points are summarised below.

1. Excise treatment of energy products

Energy products supplied to offshore platforms located within EU territorial waters are now subject to excise duty under the standard rules.

However, the existing exemptions, exclusions and benefits provided under sector-specific legislation remain applicable.

2. Classification of offshore platforms

Fixed offshore oil platforms located within territorial waters are considered ships under Article 136 of the Navigation Code.

As a result:

·       Storage facilities for energy products on these platforms do not require administrative authorisation under Law No. 239 of 23 August 2004, and

·       The storage limitations provided under Article 25 of Legislative Decree No. 504/1995 do not apply.

3. Energy products used for electricity generation

Under Article 14 of Council Directive 2003/96/EC (27 October 2003), energy products used to produce electricity are generally exempt from excise duty.

However, in Italy they remain taxable for environmental policy reasons, with the application of the rates established in Annex I of Legislative Decree No. 504/1996, in accordance with:

Article 21(9) of the Consolidated Excise Act, as amended by Law No. 160 of 27 December 2019.

4. Reduced rate for self-production

Where electricity is self-generated, Article 21(9-bis) TUA provides that the applicable excise rates on the fuel used are reduced to 30% of the standard rate.

5. VAT treatment

For VAT purposes, Article 8-bis(5) of Presidential Decree No. 633/1972 continues to apply.

Under this provision, goods supplied for use on offshore platforms are VAT-exempt, provided that the transaction can be supported by a customs export declaration submitted pursuant to Article 269(2) of Regulation (EU) No. 952/2013 (Union Customs Code).

Electricity Produced Offshore

Electricity generated on offshore platforms is generally used exclusively for operational field activities, meaning it qualifies as electricity produced for own consumption.

Under Article 53(1)(b) of Legislative Decree No. 504/1995, such installations are classified as electricity production facilities for own use.

Annual licence fee

Operation of these facilities requires payment of an annual licence fee, currently set at:

€23.24 per year
(Article 63(3)(a) of Legislative Decree No. 504/1995).

Excise duty on electricity consumption

Electricity produced and consumed on site is subject to excise duty according to the following monthly consumption thresholds.

·       For monthly consumption up to 1,200,000 kWh:

First 200,000 kWh: €0.0125 per kWh

·       Consumption exceeding 200,000 kWh: €0.0075 per kWh

For monthly consumption exceeding 1,200,000 kWh:

First 200,000 kWh: €0.0125 per kWh

·       Remaining consumption: flat excise duty of €4,820