Processes of corporate income tax convergence in the European union

Corporate income taxation is one of the key factors influencing corporate decisions and powerful device for economy regulation. Low level of corporate income taxation is a prerequisite for higher ability to attract foreign investment. Significance of corporate income taxes determines taxes' competition, impact of which is still debatable, because it could pose a threat to budget income of other countries and lead to "race to bottom". Supporters of tax harmonization argue that application of different systems for corporate income taxation in different states of European Union influenced operation of the common market and resources distribution, and widely diverging taxes created barriers for international expansion of business. They hope that equalization of corporate income taxes would allow for reduction in costs of taxes administration and elimination of some shortcomings that exist in every state's taxation systems. Therefore initiatives for equalization of corporate income taxes exist a great while. However political factors are those that reduce probability that decisions made shall guarantee maximization of economical benefit. Decentralized harmonization of corporate income taxes is under the influence of tax competition. The successful example of one state's income tax and its influence to economy makes other states to reduce their taxes too. It determines the convergence of corporate income taxes effect. In the last part of this paper are changes of corporate income taxes in the states of European Union analysed in order to establish competition's impact on decentralized process of corporate income tax convergence in the European Union.After analysis of data collected since 1995, it was found that processes of economic integration and tax competition have determined the strong reduction in corporate income tax rates however not the assimilation. This finding may be interpreted in a different level of tax competition in the Eastern and Western Europe

Impact of financial promotion measures on the development of individual houses heating

The development of heating systems in private households as well as implementation of progressive energy saving technologies could be defined as an event that does not have enough market self-regulation mechanism therefore the interference of government can be defensible. This paper examines a possible impact of financial support schemes on investments for RES heating technologies to the development of heating systems of individual houses in Lithuania. Several patterns of financial incentives for renewal of dwelling-house heating systems are discussed in this article. After analysis of measures implemented in Western Europe a conclusion was made that the most socially acceptable form of maintenance for the dwellers are renewing heating systems, would be direct financial support. In order to analyse the impact of financial promotion of development and operation of heating systems in Lithuanian individual houses a special mathematical model was developed and used. The model was developed under MESSAGE package. This model is a linear programming model which represents a full variety of heating systems of individual houses in the household sector in the country and covers all processes from fuel supply to satisfaction of consumers' needs heating and hot supply water in different categories of houses. In a special way it takes into account an implication of financial promotion measures for RES heating technologies. Various financial support measures and parameters related to uncertainties about future (fuel prices, discount rate, heat demand) were reflected in 72 different scenarios.Analysis of different scenarios had an objective to set what impact RES support schemes have on the structure of generating capacities of the heating system, what is penetration of additional RES technologies into the markets and what impact on these factors different variable or uncertain elements have. The results of modelling showed that introduction of effective financial promotion measures on investments as a means of support to individual investment in RES-heading appliances will change significantly the stock of heating technologies (boilers) but will have only a moderate impact on RES consumption in the Lithuanian household sector. Looking at the RES penetration rate, rational support is about 20-30% from total installation cost or 40-50% from equipment cost. Taking into account possible uncertainties and assuming the most reasonable a 30% support level for total installation cost, an expected annual spending from the state budget could be about 10 million euros

Incorporation of wind power probabilities into long-term energy system development analysis using bottom-up models

For future low-carbon energy systems with high shares of renewable energy, temporal representation becomes the dominant factor that impacts the model outputs and analysis conclusions; therefore, relevant and complex modelling approaches are required. We present and apply specific methodology for modelling wind power plants in long-term planning models. It is based on wind power probability curves for each time slice and use of the semi-dynamic method for temporal aspect. Benefits of this approach include the representation of wind power extremes, correct address of balancing capacities and costs, partially retained chronology. We also evaluated the quantitative effect of this methodology on the results of the energy model. In determining the reasonable number of approximation steps for wind power probability curves, we found that a three-step approximation is sufficient to ensure the accuracy of model results. Keywords: Variable renewable source; Wind power plant; Wind power probability; Temporal representation; Time slice; Long-term decarbonization scenario

Improving transport modeling in MESSAGE energy planning model: vehicle age distributions

In the European Green Deal, EU Commission has set a goal to reduce greenhouse gas emissions in the transport sector by 90% by 2050 compared to the 1990 level. Most likely, transport decarbonization will rely on a rapid expansion of electric and hydrogen vehicle fleet, which would seriously affect not just overall electricity demand, but also the shape of the electricity consumption curve. Consequently, our research focuses on integrated energy and transport modelling when analyzing its development pathways up to 2050 and beyond. This paper describes how already established transport modeling practices can be further improved by differentiating vehicles by age groups and setting vehicle age distributions to improve the representation of vehicle stock, fuel efficiencies and emissions, especially for countries that have non-declining vehicle age distributions. Modeling results using proposed and traditional approaches were compared for the Lithuanian case. It shows that the transport fuel shift using the proposed approach is more gradual than the traditional one. Diesel cars are phased out by 2050 versus 2040. Furthermore, the proposed approach provided more realistic CO2 emissions, 7% lower emissions for 2018 than estimated based on statistical data, while traditional approach was 27% lower. Keywords: energy planning; transport; model; vehicle; age distribution

Biofuel production in Lithuania : modelling of the future development

Pastaraisiais metais smarkiai išaugus biodegalų vaidmeniui ir Lietuvai prisiėmus įsipareigojimus dėl atsinaujinančių išteklių panaudojimo transporte mastų, atsirado aiškus poreikis detaliai analizuoti biodegalų gamybos sektoriaus raidos bei naujų technologijų optimalaus integravimo galimybes. Šiame metodologiniams modeliavimo aspektams skirtame straipsnyje nagrinėjami mokslinėje literatūroje publikuoti biodegalų perspektyvinės raidos modeliavimo principai, apžvelgiama esama biodegalų gamybos situacija Lietuvoje ir pristatomas matematinis modelis, skirtas biodegalų gamybos perspektyviniam modeliavimui. Šis modelis yra pagrįstas sąnaudų minimizavimu (biodegalų gamyba ekonomiškai efektyviausiu būdu) ir apima empiriškai įvertinamus ryšius tarp naftos bei biodegalų žaliavų kainos. Modelyje sudarytos galimybės atspindėti esminius biodegalų gamybos procesus, kurie turi reikšmingos įtakos ekonominiams rodikliams. Dėl lanksčios modelio struktūros yra galimas biodegalų gamybos šalutinių produktų skirtingų panaudojimo alternatyvų matematinis modeliavimas. Be to, modelyje naudojami principai leidžia nesudėtingai analizuoti ir pažangesnių biodegalų platesnį panaudojimą bei konkurencingumą. Toks tiek techninius, tiek ekonominius faktorius apimantis modelis įgalina sudaryti pakankamai realistišką biodegalų gamybos vaizdą ir analizuoti biodegalų gamybos perspektyvinę raidą įvertinant įvairius galimus scenarijus.According to the directive 2009/28/EC Lithuania as well as other European Union countries has an obligation to achieve a 10 percent level of energy from renewable energy sources (RES) in the final energy consumption in transport. From the point of view of society, there is a strong interest to investigate how biofuel production capacities should be developed and operated in order to achieve this target in the most rational way. The aim of the article is to create a mathematical model for analysis of long-term development of biofuel production in Lithuania. The structure of the paper is as follows. First part of the paper discuss methodological approaches related to the modelling of biofuel development, second part presents current situation of biofuel production in Lithuania, and in the third part there is presented proposed structure and general features of mathematical model for analysis of long-term modelling of biofuel development. In the previous researches it has been determined that relationship between world oil prices and prices of the first generation biofuel feedstock is significant. Oil price has an impact on the main components of the feedstock cost: on the one hand, large part of expenses of wheat production is directly related to oil and other energy products. On the other hand, prices of biofuel feedstock are related to oil price as they are partial substitutes. All these relationships as well as technical, legislative aspects and uncertainties have been taken into account when long- and medium-term development of biofuel production capacities has been modelled. Oil price in the model was considered as the most important exogenous factor, which is able to make a strong indirect influence on changes of biofuels production’s cost structure. A mixed button-up approach has been used in this model when particular technologies have been modelled. This means that the model is focused on the performance of each individual technology producing biofuels and more general results could be received by aggregation of individual plants performance. Model is designed to optimize capacity building and production processes from different perspectives. Minimization of total discounted cost of biofuel production, as an objective function of the model, was chosen in order to get the most socially acceptable biofuel development pathway