The Commission has decided to approve a number of aid measures contained in legislation passed by the Danish Parliament introducing new energy taxes in Denmark (State aid No N459/95). The Danish energy package is based on a principle of "tax neutrality" which means that the "green" taxes should not bring about an increase in the overall tax burden on Danish industry. It is, therefore, foreseen that the proceeds of the taxes are reimbursed to industry through a number of measures including: - A general reduction in the employer's labour market contributions per employee; - A grants scheme for investments in energy savings; - A scheme to improve working conditions in small firms. The total tax revenue (and reimbursement) is expected to amount to DKr 710 million (ECU 91 million) in 1996, increasing to DKr 1,730 million (ECU 222 million) in 1998 and DKr 2,075 million (ECU 266 million) in the year 2000. The environmental objectives of the Danish energy package are in line with Community objectives in this field. Moreover, the energy package is based on principles similar to the Commission's own proposal for a common CO2 and energy tax which also recognizes the need to take account of industry competitiveness through compensation of energy-intensive firms in the form of exemptions and refunds. In order to meet international commitments to reduce CO2 and SO2 emissions, the Danish Government considers it necessary to increase existing CO2 taxes, to extend the existing room heating tax on private households to industry and to introduce a new SO2 emission energy tax. Under the new energy package an energy tax, based on the content of CO2 and SO2 in the energy source, is imposed on CO2 and SO2 emissions. The CO2 tax for energy used in the production process is DKr 100 (ECU 12.6) per tonne CO2 emitted. For energy used for room heating, the average CO2 tax rate is DKr 600 (ECU 77) per tonne CO2 emitted. Taxes on SO2 emissions are DKr 10 per kilogramme of SO2 emitted. The package provides for favourable conditions for energy-intensive firms and establishes a distinction between particularly energy-intensive production processes (heavy processes) and less energy-intensive processes (light processes). Energy-intensive firms will, moreover, be able to reduce their CO2 taxes further by entering into a voluntary agreement with the authorities. As a counterpart to this additional tax refund, the firm will be obliged to carry out a comprehensive energy audit and invest in energy-efficiency measures identified on the basis of the audit. This energy package goes far beyond what most other Member States have introduced in terms of "green" taxes.