The Concept of Environmental Tax in the Light of European Court of Justice Case Law on State Aid

Defining the concept of environmental tax is a complex question, given the multiplicity of terms employed, the variety of definitions used by different national and international institutions, and the diverse economic theories that underlie them. However, after the Judgment on the Transportes Jordi Besora case, the Court of Justice of the European Union (CJEU) seems to be giving precedence to effects on the environment as the decisive factor for describing a tax as environmental.
The purpose of this paper is to contrast that position with the one adopted in relation to the application of legislation on State aid, specifically with regard to the application of Article 107.1 of the Treaty on the Functioning of the European Union (TFEU). To do that, we offer a critical analysis of the three basic rulings on this matter, showing which elements the CJEU takes into account when assessing whether environmental purpose can serve as a justification for the material selectivity of the tax or one of its structural elements.