Energy use and the effect of transport on the environment are the main targets of the policies set out in the green paper, unveiled this week by environment commissioner Stavros Dimas and taxation commissioner Laszlo Kovacs.
Dimas said the goal was to promote the use of market-based instruments to protect Europe's environment.
"Market-based instruments such as emissions trading, environmental taxes and targeted subsidies harness the power of market forces to protect the environment," he said.
The proposals, which will affect many areas of industry including food, mark another step in the Commission's efforts to slow down the growth of greenhouse gas emissions in the bloc through a series of policies.
Earlier this month EU member states agreed to set targets to reduce CO2 emissions and increase the use of renewable energy.
Kovacs said that fiscal policies have an important role to play in meeting the objectives endorsed by the last European Council.
"Taxation should in the first place discourage what is undesirable rewarding at the same time all sorts of positive behaviour, being it energy savings or environment-friendly activities," he said. "Tax revenues can then be used to favour economy-friendly activities, such as innovation or jobs."
In a statement at a conference on environmental taxes last week, Kovacs said he would use the green paper to move ahead on energy taxes at EU level.
Uniform environment taxes across the bloc could push businesses and consumers towards a more efficient use of resources while allowing competition on a level playing field, he said.
Kovacs said he would propose raising the EU minimum duty on commercial diesel fuel, partly to prevent 'fuel tourism', where truckers travel to member states to purchase fuel where it is cheaper.
One proposal would increase step by step the minimum excise duty rate on commercial diesel, which is currently €302 per 1000 litres. He plans to increase it to €330 by 2010, and to €359 by 2012 to make it equal with the current rate on unleaded petrol.
Minimum rates on both types of fuel are to be increased to €380 by 2014.
The proposal, if adopted by the Council, will reduce fuel tourism caused by the current excessive differentials in taxation, where excise duty on commercial diesel is €470 in Germany but €278 in Luxembourg and only €220 in Bulgaria, he told the conference.
The Green Paper suggests that the creation of a new forum could encourage and facilitate exchanges of experience and best practice between Member States on the use of market-based instruments and co-ordination of national approaches as well as national experiences with Environmental Tax Reforms.
Transport accounts for about 19.3 per cent of the CO2 emissions of the European Union, the Commission estimates.
