The table below show the road fuel duty expressed in terms of the energy contents of the different fuels. Until 1995 biodiesel was free of road fuel tax. In the 1995 budget tax was levied at the same rate as diesel. Due to the low energy density per litre this suddenly turned biodiesel from the least taxed to the most taxed road fuel. For another potential biofuel ethanol the tax is even more punitive.
Tax is applied at the same rate per litre as unleaded petrol.
Such a structure seems illogical and hard to defend on environmental grounds. 1994 TOP 5 European Experience Within the EU, some 500,000 tonnes of Biodiesel will be produced in 1999. Germany alone has over 600 filling stations selling biodiesel. Tonnage and tax structure for the major producers is shown below. No tax Plans for further 286000t capacity.