Europe
Tools for the development of the alternative propulsion and alternative fuel markets
To develop the market of alternative propulsion and alternative fuels, in order to achieve a good fuel mix that turns European energy market less dependent and more competitive, a set of different things must be achieved:
1. Law - legal compliances, legal incentives and even legal obligations must be developed, at international, national and local levels
2. Taxation - taxes can/should be reduced, for producing cars and fuels, for buying cars and fuels and for distributing fuels
3. Incentives - incentives can/should be given for investigation on new technologies (for vehicles, fuels and fuelling stations) and for the application of this new technologies to the production and distribution of cars and fuels
4. Fuel production - private and public investments can/should be made in the production of new fuels
5. Vehicles - private investments can/should be made in the production of new propulsions and vehicles, in different sectors (light cars, heavy-duty, freight lorries, buses, sewage waste collection, etc…)
6. Fuel distribution - public and private investments can/should be made in the creation of networks of fuelling stations, in accordance to the establishment and development of alternative fuel fleets
What can/should each actor do?
1. EU authorities
European Union, namely through European Commission, have the possibility and obligation to define strategies for the use of cleaner vehicles and fuels and write legislation and define incentives according to those strategies. Legislation can focus on the obligation of incorporation by the member states of rules for the creation and development of alternative fuel markets, by means of incentives, taxation or simple obligations of different types. Financing can be achieved by means of Programmes for research, development, demonstration, application and promotion. Incentives can also be directly applied for creation of fuel factories and purchasing of vehicles, fuel and fuel stations. European Union Organisations should also give the example and use alternative vehicles and fuels.
1. National Authorities
In each country, national authorities have also the possibility of influencing the market in several ways. By means of law, national government and parliaments can oblige the different actors to follow new rules that promote and defend the alternative vehicles and fuels. Different taxations to the producers, distributors and final consumers can also promote alternative fuels and vehicles. Incentives can also be given to produce or bye alternative fuels and vehicles. Regulation of the market and transactions is crucial, including insurance aspects, leasing rules, legalising system, etc.
2. Local Authorities
The responsibility of local authorities to promote sustainable communities is of great relevance. In the alternative transport field, local governments can/should economically promote alternative fuels and vehicles in several ways: setting the example by producing biogas and biodiesel with the local resources (gas from sewage and waste water, biodiesel from waste vegetable oil); incorporating in their municipal fleets alternative vehicles and installing alternative fuel stations; giving incentives to companies who want to produce and/or sell alternative fuels (monetary subsidies, areas to accommodate this industries, priority when selling to the City Council); developing partnerships between local actors who want to do business in the sector; awarding best practices; regulating and taxing the access to and parking in city centres and with privileges to environmental vehicles.
3. Car manufactures
Manufactures have to comply with international and national legislation, but is also of their interest to realise the direction we are heading for and understand the European and international strategies regarding energy in transport. The economical possibilities and opportunities that the alternative transports bring are countless. The market is growing fast and who has the technology leads the way. Advantages are obvious and some are already taking the rewards. Nevertheless, the stronger the European and national authorities compromise, the bigger the car manufactures response will be.
4. Fuel producers
Alternative fuels production is having a significant push by legislation, financing incentives and tax relieves and exemptions. Fuel producers can benefit from them in the certainty that these markets are being created to last, and the sooner they get in it, the best chances they have to benefit from it. With the oil price rise of the last few years, the overall trend shows that alternative fuels are cheaper than conventional petrol and even than diesel, but legal and finance incentives are decisive to overcome companies’ diffidence and the risks of a new market. Changes in agricultural sector to feed the alternative fuels market can also give a significant push to local economies and generate jobs.
5. Fuel distributors
Fuel distribution plays a major role in the process. Without a capable network of fuel distribution, the market cannot grow to a mature phase. This means that distribution market has to follow the car and fuel production ones. They depend upon each other. Promotion of the distributions is thus also a task for the authorities, but distributors must work with producers and final users in partnerships, starting with single refuelling stations for private companies or joint groups of companies, until real networks are created that, in the bottom line, allows the common citizen to use this alternative.
6. Public Transport fleet owners
Public transport fleet owners are interested parts of the alternative transports market. They can take great economical advantages with the development of the market especially because of the already competitive prices of biofuels, natural gas and electricity, while improving their image at the eyes of the public with the environmental benefits of these choices. There have been already some financial incentives for the acquisition of alternative fuel vehicles in some European countries and more is expected to happen in the near future, but public transport fleet owners can lobby for the need of alternative vehicles and fuels and for the development of the market. They should also look out for the best cases, the shining examples of fellow companies, and learn with their experiences.
7. Other fleet owners
Private fleet owners are less active and interested in the alternative transports, as their main business is usually another. Alternative fuels and vehicles promotion is essential to make them aware of the economical benefits they can achieve when greening their fleets. Nevertheless, they can play an important role in the market development. Usually less interested in taking risks, as soon as they feel the market is mature, the risks are low and profits are visible, they can give a big thrust to the development of the sector. Public companies have a special responsibility in the process.
Biofuels Directive
DIRECTIVE 2003/30/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
of 8 May 2003 on the promotion of the use of biofuels or other renewable fuels for transport.
compliance reporting download
The directive envisages a biofuel share of 20% till 2020. Member states are asked to report on a yearly basis about their progress. They may impose tax excemption on the biofuel content in the fuels.
Austria
In Austria Biofuels are exempt from the mineral oil tax. This also applies for the biofuel part in ETBE. Natural gas is as well exempted but without guarantee for the future. Investments into new vehicles and refuelling equipment may be funded in case a calculation shows CO2 savings. The NoVa a procurement tax related to the consumption. For other fuels its also the consumption in the MVEG-cycle minus 3 l or kg multiplied by 2% which results in discrepancies. For electric vehicles no tax on the vehicles is levied.
Other rebates concern parking fees and car taxes but they take only into consideration emissions and not CO2 or fuel type.
The EU Directive on the promotion of biofuels was adopted in Austria since 2004, while the Mineral Oil Tax Law which was amended in December 2004, laid down that pure biofuels are completely exempt from mineral oil tax. The blending of up to 2% biodiesel in diesel is also exempted from mineral oil tax, while there is also a tax reduction for the blending of up to 5% biofuels in petrol. Accordingly, from October 2005, those subject to the substitution requirement must place on the market a proportion of 2.5% biofuels or other renewable fuels calculated on the basis of the total energy content of the petrol and diesel placed on the market in the transport sector each year by those subject to mineral oil tax in Austria. This proportion should increase to 4.3% from October 1st, 2007 and to 5.75% (the Directive's objective for 2010) from October 1st, 2008. It is assumed that in 2005 and 2006, the substitution requirement will be almost exclusively met with biodiesel.
In 2004, approximately 55,000 tonnes of biodiesel were produced in Austria, according to information from the producers. From this quantity, however, roughly 90% was sold abroad, as the price which can be obtained for biodiesel in Italy and Germany is currently higher than that in Austria. Concerning ethanol, there is currently no large-scale production of bioethanol in Austria. In total, more than 200 million cubic meters of biogas are produced each year in Austria, almost 100% of which, converted directly into electricity by the producers. However, some producers are very interested in using biogas as a fuel for transport purposes.
Belgium
In Belgium EC Directives 2003/30 and 2003/96 have been transposed by the Royal Decrees of 2005 and 2004 respectively. On April 2005, a draft Planning Act was prepared reducing the excise duty on biofuels and approved its underlying principle. According to this Act, excise duties will be lowered for diesel fuel incorporating at least 2.45% of biodiesel and for petrol incorporating at least 7% of bioethanol, either through direct incorporation or through the conversion to Ethyl Tertiary Butyl Ether (ETBE). Pure rapeseed oil will be completely exempted from excise duty.
The projects with biofuel are promoted by not charging excise duties while the projects are running. Taxation is another way to force people into buying biofuels. Belgium is divided in three parts, the Wallonian, the Flemmish and the Brussels Capital region. All three of them are promoting biofuel in there own way. In the Brussels capital region the government will stimulate the purchase of cars powered with biofuel, and in 2008 they want 20% of their vehicles in the public body converted to biofuel. The Wallonian region has supported 11 different projects, 8 projects relating to the gassification of biomass, 2 relating biomethanisation and 1 relating the combustion of biomass in boilers. The Flemmish region has a lot of projects and has a funds ceiling of 3.6 milion euros. They support the growth of energy crops for biofuel and the built of installations for producing the fuel out of biomass.
Bulgaria
Croatia
Cyprus
Cyprus has not set the target for biofuels yet. Production and sales of biofuels in Cyprus were considered to be negligible up to 2004, while interest for investment in this field has been very limited.
Czech Republic
In Czech Republic the higher costs and lower energy efficiency of the biofuel components were offset by the payment from 1999 to 2001 of direct subsidies to manufacturers of RME and fuel blends. From 2001 to April 2004, compensation took the form of price rebates for the raw material (oilseed rape) grown on set-aside land. In addition, RME producers received direct support for processing rapeseed oil for non-food uses. This support is continued for a maximum of 100,000 tonnes per year. Also, there is a lower excise duty on blended fuel/biodiesel, which means that RME incorporated in a fuel blend carries zero excise duty.
In the years 1991-1995 grants were allocated from the State budget to establish manufacturing capacity for rapeseed methyl ester. Additional public resources have been made available and are being dedicated exclusively to promoting RME and biodiesel production. A biodiesel blend, i.e. a blend of diesel and RME containing 31% RME by volume, is produced for the domestic market from 1997 onwards. At present there are 14 RME producers in the Czech Republic, which have a total production capacity of approximately 150,000 tonnes of RME annually. In 2001 39,600 tonnes were used in the Czech Republic and in 2002 68,800 tonnes. The use of bioethanol in the form of bio-ETBE has been stimulated and production capacity is available, but limited3.
Czech Republic has set indicative targets for the production of biofuel in the country, according to which the biofuel share is estimated to reach 1.3% in 2005, 3.7% in 2006 and 4.5% in 2010. This production will be based on RME’s share in diesel and bioethanol’s share in petrol. The target for 2006 clearly exceeds the percentage specified by the European Commission with main motivation the rural development caused by the local production of biofuels.
Denmark
Denmark produces biodiesel which is exported. The Danish biofuel production is mainly dependent on the size of the European market and the competitive position of the Danish producers. The Danish consumption of biofuels for transport is very low and limited to experiments at local levels, since the North seas reserves in oil have brought Denmark in a self-sufficient position at least until the end of 20103. The indicative target for the use of biofuels in 2005 was zero and this decision was in line with the Government's position during the negotiations on the Directive. The Government plans to abolish the current CO2 tax on biodiesel (12 €/tonne CO2) and introduce similar tax rebates for other biofuels for transport3. However, the energy tax, which is the major part of the taxation of transport fuels, remains. Efforts to promote the use of biofuels for transport in Denmark have taken in the form of research, aiming to bring the costs closer to the prices of fossil fuels. According to the Danish Government, biofuels are of no great benefit to the environment and are far more expensive than producing fossil diesel or petrol. However, it is important to mention that a considerable amount of biomass is used to produce energy for other than transport purposes, which in 2002 was approximately 85 PJ.
Estonia
Estonia has adopted the EC Directive 2003/30 on the promotion of biofuels and other renewable fuels for transport, while the Ministry of Finance amended the Alcohol, Tobacco and Fuel Excise Duty Act according to which biofuels used as motor or heating fuels will be exempt from the excise duty. The basic objective of Estonia’s fuel and energy sector is to guarantee a high-quality supply of fuel and energy at optimum prices to meet demand. As one way of realising this basic objective, the intention is also to work out the necessary measures to enable the use of renewable liquid fuels in the transport sector. There is no production of fuel for transport purposes in Estonia, as a result all fuel is imported. Under Estonian conditions, we can talk about producing biofuel for transport purposes mainly with regard to bio-diesel and ethanol. Rapeseed is a basic arable crop in Estonia that can be used to produce high-quality biodiesel. The production of bio-diesel from rapeseed has been tried, but the fuel obtained does not meet European standards.
Until now all rapeseed has been used for the production of cooking oil. Starting production of biodiesel in Estonia requires an extension of the area under rape or imports of rapeseed from abroad. It is true that industrialists have expressed interest in the possibility of producing biodiesel, but up to now there are no concrete plans for starting production. Car importers do not rate the technical readiness of vehicles in Estonia for the use of biofuels very highly. Reference has been made to the loss of the manufacturer’s guarantee if biofuel is used in a vehicle. Vehicles’ technical user manuals likewise contain restrictions on the use of biofuels. A dialogue with the manufacturers of diesel vehicles have been launched for delivery to Estonia to clarify the possibility of using biofuel and bring manuals up to date. In view of the above it is unlikely that biofuel produced in Estonia will come onto the market in 2005. The importation of biofuel into Estonia is also unlikely. In the course of 2005 it will be possible to assess the impact of the measures taken and in cooperation with various authorities plan supplementary measures.
Finland
Bioenergy is the most important of Finland's renewable energy sources, while it rests on a quantifiable domestic raw materials base. The most important bioenergy sources are waste products of the wood processing industry, industrial wood waste material such as sawdust and bark as well as forest chips and recyclable fuels. The measures taken to promote bioenergy and the resources used are: research and development, taxation, investment support payments and other forms of funding. Finland has adopted EC Directive 2003/30; however tax reductions under the Directive 2003/96, which came into force in early 2004, have not at present been decided on. Finland’s national indicative target for the proportion of biofuels in 2005 was set at 0.1 %. Since 2004 biogas used as transport fuel is exempted from tax, because this is covered by an act intended for the promotion of natural gas and Liquefied Petroleum Gas (LPG) as transport fuel. Other biofuels can be partly exempted from tax on a project basis, intended for research and testing.
Finland is having difficulty in producing biofuel due to the limited biomass potential in the country and the high production costs of biofuels. It is estimated that cost of reducing carbon dioxide emissions by combined heat and power is much lower (€10-20/t CO2) than for biofuels derived from arable crops (over €200/t CO2).
France
France is among the EU countries with a long history in producing biofuels. The French indicative target for 2005 was set at 2%. Furthermore, France has announced to increase the production of biofuels to an amount of 1,200,000 tonnes per year in 2007, but this is not much more than the indicative target of 2% in 2005. Biodiesel and bio-ETBE have been partly exempted from taxation since 1992. The amount of the exemption is adjusted each year and is enough to compensate for the cost difference with traditional fuels. Since 2004, bioethanol directly blended in petrol is also partly exempted from taxation. These tax exemptions apply to certain maximum volumes of biofuels and are also adjusted each year. For 2004 the maximum volumes were 387,500 tonnes of biodiesel, 199,000 tonnes of bio-ETBE and 12,000 tonnes of bioethanol.
Germany
Informations about the german "Energy Tax Act" under
Germany is the main producer of biodiesel in the EU. Biodiesel has been used as pure fuel in Germany since 1993, whereas in 2004 was the most widely sold biofuel in Germany. In 2004, biofuels accounted for 1.9% by volume of total fuel consumption in Germany and therefore the prospects of achieving the goal of 2% are considered to be good. A basis for tax relief - currently total tax relief - for biofuels and bioheating fuels, produced from biomass, has been created and entered into force since 2004 in Germany. Biogenic fuels in pure form and the fractions of biofuels and bioheating fuels in mixtures with fossil motor fuel and heating fuels are therefore exempt from petroleum tax. However it should be mentioned that the measure is limited until 2009 and the tax relief must be adjusted if overcompensation is established between now and then.
Great Britain
The total sales of biofuels in the UK in 2003 were 19,446,000 litres, which corresponds to approximately 0.04% of total road transport fuels. To a large extent, production is from waste vegetable oil, since this is currently the cheapest feedstock. Biodiesel is currently available at over 100 filling stations in the UK; the majority is at or below 5% level blend in diesel, while negligible quantities of bioethanol were used in road transport in 2003. At present, biodiesel is the main produced biofuel which is then blended with conventional road fuel diesel.
Fuel duty differentials are currently the UK's primary means of support for biofuels. In addition to the duty incentive on biodiesel (20 pence per litre), which has been in place since July 2002, a similar duty differential for bioethanol was introduced on January 2005. These duty differentials will now continue until 2008, consistent with the UK Government's commitment under the Alternative Fuels Framework to provide 3 year rolling certainty on duty differentials. The latest provisional figures indicated that biofuels were increased since the end of 2004, which is a direct result of the 20 pence per litre fuel duty incentive.
The UK Government has explored the prospects for a Renewable Transport Fuels Obligation (RTFO) as a possible mechanism to promote renewable fuels into the long term. It would be limited to the road transport sector, at least initially. An RTFO would place a legal obligation on specified transport fuel suppliers to supply a specified proportion of their road fuel supplies to their customers in the UK from renewable energy sources. Since the target to reduce carbon emissions by 60% by 2050 will not be achievable be relying on conventional fossil fuel-based vehicles, hydrogen and biofuels are certainly two of the main alternatives.
Greece
The year 2005 was very important regarding the promotion of biofuels in the Hellenic market since the EU Directive on the promotion of the use of biofuels and the EU Directive on the taxation incentives were both included in the Hellenic Legislative Framework. The Government has set a 3-year schedule (2005, 2006 and 2007) for the promotion of the tax free quantities of biofuels in the Hellenic market, according to which the tax free quantities of biodiesel are: 51,000m3 in 2005, 91,000m3 in 2006 and 114,000m3 in 2007.
According to the National goal, blending of biodiesel must have risen to 5.75% by December 31st, 2010. Biofuel is traded in the Hellenic fuel market through crude oil refineries and authorised fuel trade companies, which have to mix the scheduled quantities with fossil diesel. It should be mentioned that fossil fuel, which contains more than 5% of biofuel, has to be clearly stated by the traders. Biodiesel production has recently started in the country. The first unit (capacity: 40,000 tonnes/year) started its operation in December 2005, while another one is under construction. Furthermore, several other companies have expressed their interest to the Ministry of Development, to build their own small and medium scale biodiesel production plants (annual capacity 10.000-30.000 tonnes) in various regions of Greece. Regarding the production of bioethanol and biogas, currently there are no initiatives in implementation of bioethanol production plants; however there is biogas production (from landfills) but it is used for other than transport purposes (electricity).
Hungary
The national indicative target for biofuels in Hungary in 2005 was 0.4-0.6%. The decree also provided a tool for achieving the target by installing an excise-duty refund system until 2010 for bio-ETBE produced on the basis of bioethanol blended in engine fuel as well as standard quality biodiesel blended in diesel oil. There was no biofuel use in Hungary in 2003 but there is production capacity available to produce an amount of bioethanol enough for 40,000 tonnes of bio-ETBE. In the case of biodiesel, there is a poor crop yield in Hungary due to climatic factors; however, the crop is still relatively cheap.
Ireland
Ireland proposes an initial indicative target of 0.06% by the end of 2005, rising to 0.13% in 2006. The initial target is based on the projections from a scheme for excise relief on pilot biofuels projects which was designed either to produce biofuel or test the technical viability of biofuel for use as motor fuel. This scheme included excise relief for pure plant oil, biodiesel blends, and bioethanol blends, but only on a project basis. The maximum amount of biofuels produced under this scheme is 6 million litres of pure plant oil, 1 million litres of biodiesel and 1 million litres of bioethanol per year, which adds up to approximately 0.3% of total transport fuels. Ireland also offers capital grant aid for biofuels projects. Within the frame of their national climate change strategy, Ireland has set a target of reducing greenhouse gas emissions in the transport sector by 2.67 million tonnes in 2010 compared to the year 2000.
Italy
In Italy, the Directive 2003/30/EC was implemented by the Decree 30/05/2005 n. 128, followed by the Law 11/03/2006 n. 81.
The Decree 128 lays down targets on biofuels and renewable fuels consumption, expressed in percentage as to the overall diesel oil and petrol present on the national market:
- 1% by 31/12/2005;
- 2,5% by 31/12/2010.
More ambitious targets as well as fiscal incentives and other measures are expected in the Financial Law 2007, currently under approval.
According to Confagricoltura (the farming companies trade association), 200.000 tons of biodiesel were produced in Italy in 2005, of which 13.000 by national raw materials and the rest imported from foreign countries.
Latvia
In 2005, the Law on Biofuels was accepted by Latvia which has determined approximate targets of 1.25% of biofuels in 2004, 2% in 2005, 2.75% in 2006, 3.5% in 2007, 4.25% in 2008, 5% in 2009 and 5.75% in 2010. In order to promote the use of biodiesel fuels acquired entirely from rapeseed oil, and the production and use of fossil fuels blended with biofuels, a reduced excise duty rate has been included in the law „On Excise Duties”.
Lithuania
In 2004, the Republic of Lithuania adopted the Law on Biofuel, which in line with the requirements of the Directive 2003/30/EC. In 2005, the Ministry of Economy adopted two legal acts on the mandatory use of biofuel for transport. Under these Acts, as of 31 December 2005, oil products sold and used in the country must meet specific requirements and therefore it can be concluded that the legal basis for the implementation of the Biofuel Directive has been prepared. With regard to the Council Directive 2003/96/EC, Lithuania plans to introduce state aid by reducing excise duties on energy products containing substances of biological origin. According to the European legal acts, the excise relief is regarded as a state aid aiming to promote the production and the use of biofuel for transport with regard to the requirements of the EU legal acts (Directive 2003/30/EC).
Luxemburg
Malta
Malta is keen to exploit its potential biomass availability. This is particularly in view of the total dependence on imported fuels and the environmental benefits of renewable energy sources, including biofuel. However, in Malta there is negligible potential in biofuels from agriculture due to the limited freshwater resources, high population density and poor soil fertility. Industrial and domestic waste is the only source of biomass. Noting that biofuels can be used more cost-effectively elsewhere, other than transport, and that difficulties are being experienced with regard to the vehicles driven by biodiesel, Malta is exerting caution in setting realistic interim targets.
Poland
Poland together with Spain, France, Sweden and Czech are the main EU countries producing bioethanol. The use of bioethanol as a direct blend in petrol is increasing in Poland. At present, France, Spain and Poland convert most or all their bioethanol production into ETBE, while Sweden and the Czech Republic use their bioethanol production directly. Although bioethanol production is already developed in Poland, until 2004 practically no commercial-scale production of esters was started up. Poland has adopted both EU Directives and has taken measures in order to promote the use of biofuels or other renewable fuels to replace diesel or petrol for transport purposes. Among these measures are tax exceptions and tax relief, as well as financial support for research programmes. According to the Polish Law on biocomponents used in liquid fuels and liquid biofuels, the following biocomponents qualify for exemption from excise duty: bioethanol, including bioethanol contained in ethyl tertiary butyl ether or in tertiary amyl ethyl ether, as well as methyl esters or ethyl esters of all fatty acids obtained from processing oilseed rape or by-products and wastes. The exemption applies to biocomponents intended for use in liquid fuels and liquid biofuels produced from agricultural raw materials, by-products and waste meeting the relevant quality requirements. The polish Law also lays down rules governing exemption from excise duty for liquid fuels containing a specified level of biocomponents.
Portugal
In 2006, both EU Directives were transposed by the Portuguese Government (DL 62/2006 and DL 66/2006), transpiring its intention to reach the quota of 5,75% of biofuels in the market by the year 2010. Of all the energy consumed in Portugal, 40% is used by the transports’ sector and 98% of energy consumed in the transports’ sector comes from petrol. The promotional measures include total or partial exemption of the taxation on consume of these fuels until a target value is fixed annually and foresees the possibility to impose a mandatory minimal quota of biofuels in fuels in case the incorporation of these will be significantly below the predicted value. This is expected to promote the production of biofuels from used oils, waste products and agricultural based products by "small dedicated producers". Some of the challenges biofuel production faces in Portugal are the lack of agricultural areas for production and the lack of pilot-experiences.
Regarding incentives and laws for other alternative fuels and alternative vehicles in Portugal, a note should be given to the 40% reduction on the acquisition tax on hybrid vehicles. Electrical vehicles aquisition has exemption of "car tax" and "circulation tax" and the Portuguese Government is proposing the possibility of deduction of 30% of the price in income taxes for 2009.
Romania
According to the obligations assumed by Romania, as an accession country, within the Position Agreement, chapter 14 - Energy, it was adopted the Governmental Decision no. 1844/2005 for promoting biofuels and other renewable fuels use in transport sector, thus fully transposing the 2003/30/EC Directive provisions.
Romania has to assure its fuels market with biofuels and other renewable fuels up to 5.75% until 2010, with a view to its use in transport, calculated based on energy content of all types of fossil fuels consumption in this sector. Taking into account the current fuels levels and the obligations coming from the GD no. 1844/2005, the needed quantity of biodiesel and bioethanol for 2010 is of about 300,000 tonnes.
Starting with 2006 the Romanian Ministry of Economy and Finances undertook a package of actions supporting different initiatives for promoting alternative fuels. In this context some new provisions within the Fiscal Code are to be mentioned, based on which it is granted an exception of excise duties for energetic products such as biofuels and other renewable fuels. This provision is the object of article 201 let. l) of Law no. 571/2003 concerning the Fiscal Code, amended by Law no. 343/2006. The norms of application of the new Fiscal Code are approved by the Governmental Decision no. 1861/21.12.2006.
In order to accelerate this target premises to be fulfilled, the GD no. 1844/2005 has been amended by another GD no. 456/2007, which is stipulating a gradul introduction of a minimum rate of biofuels in fossil fuels. Consequently, starting with 01st July 2007 the market of diesel fuels will commercialize exclusively biofuels of minimum 2% in volume. Starting with 01st January 2008 this rate will increase to minimum 3% in volume, and then it will reach 4%. As for oil fuel it should contain a minimum of 4% bioethanol in volume, starting with 01st July 2009.
In order to give value and improve the efficiency of our biofuels potential, a national Strategy will be ellaborated soon and a National Action Plan for biomass until the end of the first quarter of 2008.
Slovakia
From 2001 to 2003 Slovakia had a biodiesel production capacity of 62,000 t. In 2001, 30,290 t biodiesel was actually produced and used in Slovakia, which was approximately 1.6 % of the total transport fuel use. In 2002, 6,267 t biodiesel was produced, of which approximately a quarter was exported and the remainder used domestically.
Slovenia
Slovenian legislative framework for increasing of use of biofuels:
- Operational programme for limiting greenhouse gas emissions; introduced in 2004, revised in 2006. To achieve national Kyoto targets, on average 3% use of biofuels in transport sector is expected in 2008 - 2012.
- Law on excises; fully exempting 100% biofuels from excise duties (bioethanol, biodiesel, biogas, bioETBE, bioDME). Exempting of up to 5% biofuel blends from excise duties according to share of biofuel blended in fossil fuel. Exemption of higher blends only if they are corresponding to regular fuel standards.
- Rules on the content of biofuels in the motor vehicle fuels; introduced in 2007. Defines types of biofuels. Defines minimum annual proportions of biofuels to be sold by fuel providers up to 2015 (from 2% in 2007 and 3% in 2008 up to 7,5% in 2015).
- Regulation for direct payments for producers of certain arable crops; subsidies for certain energy crops production (e.g. rapeseed).
Spain
Spain is among the EU countries, which has also set special tax measures in order to promote the use of biofuels. In 2003 approximately 152,000 tonnes bioethanol was produced and used as bio-ETBE, while the amount of biodiesel used in 2003 was 65,810 tonnes. The total share of biofuels in the transport sector in 2003 was 1.09%. The national indicative target for the use of biofuel was in 2005 at 2%.
Until the end of December 2012, under the conditions laid down in the regulations, a special rate of zero euros per 1000 litres shall apply to biofuels. This special rate shall apply exclusively to the volume of biofuels even when this is used blended with other products. Provided that comparative changes in the production costs of petroleum products and biofuels make it advisable, the General State Budget Law may replace the zero rating referred by a positive tax rate, which must not exceed the tax rate applicable to the equivalent conventional fuel.
Sweden
Sweden has a fully commercial biofuels market. In 2005 the biofuel share was 2,2 % of the total petrol and diesel consumption for transport operations. Sweden is of the view that the European Commission should put forward proposals for a new Directive on fuel quality permitting petrol to contain 10% ethanol.
The biofuels widely used in Sweden are bioethanol, biogas and rapeseed methyl ester (RME). Ethanol is the most widely used biofuel, both as a 5% low blend in al petrol but also as E85 in the 40 000 flexi fuel vehicles running and as E95 in 400 ethanol buses. The use of biogas is growing and used in about 600 buses and 10 000 light and heavy vehicles. RME is mostly used as 5 % low blend in diesel. Hydrogen from renewable electricity are also used. In 2004 four times more ethanol was imported from Brazil and other parts of South America, but also from France, Spain and Italy than produced domestically. Finally, it should be mentioned that from April 1st, 2006 and forward all filling points selling more than 3000 m3 a year must offer at least one alternative fuel, for example ethanol or bio-gas, in 2007 all fuel stations selling more than 2000 m3 and in 2008 all points selling more than 1000 m3 have to offer a renewable fuel.
The Netherlands
In 2005, no measures were yet in force in the Netherlands to promote the use of biofuels or other renewable fuels. However, exemption from excise duty was granted in 2005, to three projects relating to pure plant oil PPO). In the context of these programmes, it was permitted to place a total of 7 million litres of rapeseed oil on the market exempt from excise duty of EUR 0.365 per litre; this possibility was not fully exploited. It is estimated that between 2 and 4 million litres of PPO were placed on the transport fuel market in 2005. On the basis of this data, the total sales of transport fuel and the share of biofuels, pure or unblended, and other renewable fuels placed on the market in 2005 were as follows:
petrol: 5466 million litres
diesel: 7481 million litres
LPG: 679 million litres
PPO: 3 million litres
Calculated on the basis of the energy content of the total amount of petrol and diesel, the share of biofuels and other renewable fuels was as follows: 3 million PPO x 33.6 MJ per litre/ (5466 million petrol x 32.5 MJ per litre + 7481 diesel x 35.9 MJ per litre) = 0.023%.
The 2006 Tax Plan adopted by the House of Representatives included Government proposals for the Netherlands policy on biofuels from 2006. This policy will comprise two components: a “general” and an “innovative” component.
The general component constitutes the market-wide introduction of the present generation of biofuels, which are suitable for all road traffic. In 2007, all suppliers of petrol and diesel for road transport will be obliged to ensure that biofuels (bioethanol, bio-ETBE or biodiesel) account for 2% of their sales (in terms of energy content), in the Netherlands. The target/mandatory figure for 2010 is 5.75% as laid down in the Directive. In 2008 and 2009, the mandatory percentage will be increased gradually each year in order to ensure a smooth transition in the run-up to 2010. Tax incentives will be paid in 2006, however, to encourage suppliers to start providing fuels with a 2% biofuel component in 2006. The innovative component will involve stimulating the development and market launch of innovative biofuels. A total of EUR 60 million has been made available for this purpose.
Turkey
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