Test-bench propane counts as heating fuel, Tribunal holds

Propane burned on a gas-turbine burner test bench counts as fuel used for heatingSkatteverket, even when the heat serves only to replicate real operating conditions for measurements and is then vented unusedSkatteverket. The Tribunal held so in its judgment of 15 July 2026Skatteverket (T-562/25), interpreting use "as heating fuel" in the first indent of Article 2(4)(b) of the Energy Taxation Directive (2003/96/EC).

In the case before the national court, propane was burned for its energy content while testing burners for gas turbines under real conditions to generate measurement data. The heat produced was used to reach the temperature conditions of real turbine operation; without those conditions the measurements would have been essentially worthless. Most of the combustion energy was lost, as the resulting gases passed through the test bench without energy recovery and were released into the atmosphere through a chimney, and the heat was not put to any subsequent use.

The Tribunal reasoned from the nature of energy excise as a consumption tax: "used as heating fuel" covers every case where the product is burned and the energy thereby produced is used for heating, whatever the purpose of the heatingSkatteverket. Where propane is burned and consumed to use its heat content to simulate real gas-turbine operating conditions, it is consequently used as heating fuelSkatteverket. The purpose of the heating, namely to reach temperature conditions matching real operation, is irrelevantSkatteverket, and continuously venting the gases without further use does not change that assessmentSkatteverket.

The consequence concerns the 100 per cent exemption from energy, carbon dioxide and sulphur tax for fuel consumed for purposes other than as motor fuel or heating fuelSkatteverket (6 a kap. 1 § 1 a lagen (1994:1776) om skatt på energi). Test-bench propane of this kind does not meet that test, because it is consumed as heating fuelSkatteverket, so the exemption is unavailable for itSkatteverket. The contrast with Skatteverket's neighbouring examples is sharp: fuel burned in fire drills and fire tests to cause a fire sequence, with no purpose of producing heat and without capturing the heat, is consumed for another purpose and qualifiesSkatteverket, while fuel burned to heat a smoke-diving training facility or in thermal deburring is heating fuel and does notSkatteverket.

Operators that burn propane when testing gas-turbine burners on test benches should treat the fuel as heating fuelSkatteverket and review any exemption claims made under the other-purposes rule. Where fuel in one and the same process is used both as heating fuel and for another purpose, the dual-use exemption may still relieve the whole quantitySkatteverket, but a test burn whose only function is heat for realistic measurement conditions has no such other-purpose element under the Tribunal's readingSkatteverket.

Legal basis: 6 a kap. 1 § lagen (1994:1776) om skatt på energi; Article 2(4)(b) of the Energy Taxation Directive (2003/96/EC); Tribunal judgment of 15 July 2026, T-562/25.