France to reduce planned ethanol tax rise
France's government decided on Friday 24 October to reduce a planned tax increase for biofuels from next year.
The original tax changes for biofuels, announced in the draft budget at the end of September, were criticised by industry representatives as a reversal of commitments to support the expansion of the fuels as part of national environment targets.
In an amendment approved by the lower house of parliament on 23 October to the 2009 finance bill, the government announced it would cut tax breaks for biodiesel and ethanol over the next three years by less than announced previously.
The revised text also intimates plans to eliminate the tax breaks completely from 2012. A revision clause is planned for 2010 and 2011 that would allow France to take into account a forthcoming European directive on the taxing of biofuels.
The government, which had hoped to save 401 million Euro's next year by reducing the tax breaks, had argued that the need for fiscal support was declining.
French producers are presently exempt from paying 0.22 Euro a litre of the TIPP fuel tax for biodiesel and 0.27 Euro per litre for ethanol.
Under the budget amendment, the tax reduction for biodiesel will fall to 0.15 Euro a litre in 2009, 0.11 Euro in 2010 and then 0.08 Euro in 2011.
For ethanol, the tax break will be reduced to 0.21 Euro a litre in 2009, 0.18 Euro in 2010 and 0.14 Euro in 2011.
The initial budget proposal called for the tax exemptions for biodiesel and ethanol to be cut to 0.135 Euro and 0.17 Euro a litre next year, before being reduced to zero in 2012.
The original tax changes for biofuels, announced in the draft budget at the end of September, were criticised by industry representatives as a reversal of commitments to support the expansion of the fuels as part of national environment targets.
In an amendment approved by the lower house of parliament on 23 October to the 2009 finance bill, the government announced it would cut tax breaks for biodiesel and ethanol over the next three years by less than announced previously.
The revised text also intimates plans to eliminate the tax breaks completely from 2012. A revision clause is planned for 2010 and 2011 that would allow France to take into account a forthcoming European directive on the taxing of biofuels.
The government, which had hoped to save 401 million Euro's next year by reducing the tax breaks, had argued that the need for fiscal support was declining.
French producers are presently exempt from paying 0.22 Euro a litre of the TIPP fuel tax for biodiesel and 0.27 Euro per litre for ethanol.
Under the budget amendment, the tax reduction for biodiesel will fall to 0.15 Euro a litre in 2009, 0.11 Euro in 2010 and then 0.08 Euro in 2011.
For ethanol, the tax break will be reduced to 0.21 Euro a litre in 2009, 0.18 Euro in 2010 and 0.14 Euro in 2011.
The initial budget proposal called for the tax exemptions for biodiesel and ethanol to be cut to 0.135 Euro and 0.17 Euro a litre next year, before being reduced to zero in 2012.
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