Biofuels Taxation

According to the ETD, diesel and gasoline excise duty applies to the respective bio-blending components. The ETD allows member states to reduce excise duty on biofuels. It includes HVO, which is classified as biofuel according to the RED. All of the member states made use of this provision until the end of 2013. The reduced tax rate (especially on low biofuel blends) drove biodiesel and bioethanol consumption. Following changes in the EU state aid rules, as of June 28, 2014, member states cannot financially support biofuels produced from feedstocks competing with food production due to potential indirect land-use change (ILUC). If a member state wishes to apply tax reduction, it has to submit an application to the EC. This factor and commercialization of the first-generat