French law and biofuels

Increase in the quantities of biofuels benefiting from a reduction in the internal consumption tax on petroleum products and relaxation of the procedures for approving the production units concerned

Comments: this article increases the quota, provided for in article 265 bis A of the customs code, for the production of biofuels benefiting from reductions in the internal tax on petroleum products. It also provides for the possibility of aggregating the approvals of the production units of the same operator.

Note the flagrant absence of measures on Pure Vegetable Oils.

I. THE DEVICE VOTED BY THE NATIONAL ASSEMBLY

This article was inserted in the 2005 finance bill following the unanimous vote by the National Assembly of an amendment by our colleague Gilles Garrez, general rapporteur for the Budget and several of his fellow deputies, who had received an "extremely favorable" opinion from the government.

The purpose of this amendment was twofold, it aimed:
- on the one hand to increase, for 2005, the total quantities of biofuel benefiting from a reduction in internal tax on petroleum products;
- on the other hand, to authorize the transfer of part of an approval, issued to a production unit of an operator, to another of its approved production units.

A. THE INCREASE FOR 2005 IN THE QUOTA OF TAX-AIDED BIOFUELS

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The article plans to increase by 140.000 tonnes (to be shared between the two sectors of ethanol or vegetable oil products), the quota for 2005 for biofuels to which a reduction in internal consumption tax is granted. petroleum products, the prices of which are currently, per hectolitre:

- 33 euros for the EMHV *; 38 euros for ETBE *; 37 euros for ethanol.

The current approvals relate to:
- 387.000 tonnes of EMHV; 219.000 tonnes of ETBE; 103.000 tonnes of ethanol.

The increase in the tax-assisted quota would therefore be around 20%.

B. THE FLEXIBILITY OF THE MANAGEMENT BY THE OPERATORS OF THEIR APPROVED PRODUCTION UNITS

Article 265a A, cited above, of the Customs Code, provides that biofuel production units, in order to benefit from the planned reductions in the internal consumption tax on petroleum products, must be approved by the Minister for the Budget, after consulting the one in charge of agriculture, following the call for applications procedure published in the official journal of the European communities.

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It is proposed that with the agreement of the customs administration, an operator can transfer the approvals which have been issued to him, from one of his production units to another.

This measure corresponds to a request from refiners, mentioned by our colleague Alain Marleix, in his June report 2004 (*) on biofuels, and considered by him, as legitimate.

Indeed, if the production of one of an operator's production units slows down or stops, that of another unit could increase so that the globally authorized quantity is respected.

II. THE POSITION OF YOUR COMMISSION

Any measure likely to increase French production of biofuels, the current level of which is very far from Community objectives, can only be welcomed.
The relaxation of the conditions imposed on operators for the management of their approved manufacturing units is also a welcome provision.
However, as your general rapporteur pointed out in his recent information report on the development of compulsory levies (*), France is the only country in Europe to quota the quantities of these products benefiting from tax advantages (apart from Italy and Sweden).

Read also: public voice on HVB

Furthermore, the quotas set are never fully respected, any overshooting being financially sanctioned, which testifies to the Malthusian character of a system which must be deeply reformed.

Commission decision: your committee proposes that you adopt this article without modification.

* EMHV: Methyl esters of vegetable oil or "Diester".
* ETBE: Ethyl Tertio Butyl Ether: mixture of ethanol and isobutene, residue from the refining of petroleum products.
* Information report n ° 1622 (XIIth legislature).
* 52 number (2004-2005).

According to the site of www.senat.fr

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