A Pragmatic Approach to Fuel Taxation
by Robert Vierhout (Ethanol Producer Magazine) One would think that a relatively easy way for governments to promote biofuels would be to tax biofuels less than fossil fuels—avoid lengthy debates on mandates and simply change the taxation structure in such a way that biofuels will have by far the competitive edge over fossil fuel.
…The present energy taxation law results in perverse effects causing shortages of diesel, surpluses of gasoline, discrimination of biofuels when taxed as fossil fuels and loss of government income when taxes are unequal in neighboring countries. So, change is needed, but any substantial progress does not seem to be happening.
Since April, member states are trying to agree on a more balanced tax law. After a delay of more than a year before the bill was put to the member states, the Polish president of the EU spent most of the past six months derailing the proposal, because it runs counter to Poland’s coal policy.
All hopes are now set for the first half of this year when the Danes hold the presidency. Even though a brand new government and not very experienced, the Danes want a pragmatic approach: Focus the law on what really will deliver a change in European transport fuel consumption by aligning taxation of diesel and gasoline and forget about all the other goodies, such as introducing a CO2-based tax, taxation on energy density or a higher tax on coal. READ MORE
