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Amended proposal for a 
COUNCIL DIRECTIVE 
on excise duties on motor fuels from agricultural sources 
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:v:illl (presented by the Commission pursuant to Article 189 A (2) 
of the EC-Treaty) 
EXPLANATORY MEMORANDUM 
INTRODUCTION 
On 5 March 1992W the Commission presented a proposal to the Council for a Council 
Directive on excise duties on motor fuels from agricultural sources. 
The Economic and Social Committee has given its opinion on 26 May 1992(2) which 
broadly supported the proposal. 
The Opinion of the European Parliament was adopted on 8 February 1994(3) on the 
basis of a report prepared by the Committee on Economic and Monetary Affairs and 
Industrial Policy. This went along with the Commission's proposal, proposing some 
amendments. The Commission largely shares the view of the Parliament and accepts 
the amendments Nos 2, 3, 5, 13, 19 and 47, which reinforce and complete the initial 
proposal. However, several of the proposals which have been put forward by the 
Parliament are linked to the idea of making the proposed tax incentive optional (Nos 6, 
20, 21 and 22). This is not acceptable to the Commission, since it would weak the 
impact of the proposed measure at a Community level. Amendment No 7 is not 
acceptable because it is contrary to the Union's international engagements and 
amendment 14 because it is not relevant in a fiscal Directive. Finally, amendment No 
12 is not acceptable because it runs contrary to the Community policy of favouring 
renewable resources. 
Moreover, whilst not formally amending its proposal, the Commission intends to take 
account of the ideas contained in certain other amendments during the negotiations on 
the Directive in the Council. 
(1) OJ. C 73 of 24 March 1992. 
(2) OJ. C223 of 31 August 1992. 
(3) O. J. (Not yet published) 
Amended Proposal for a 
COUNCIL DIRECTIVE 
on excise duties on 
motor fuels from agricultural sources 
Original proposal Amended proposal 
THE COUNCIL OF THE EUROPEAN 
COMMUNITIES 
Having regard to the Treaty establishing the 
European Economic Community, and in 
particular Article 99 thereof, 
Having regard to the proposal from the 
Commission, 
Having regard to the opinion of the European 
Parliament, 
Having regard to the opinion of the Economic 
and Social Committee, 
Whereas fuels from agricultural sources present 
advantages for the Community's policies 
concerning both agriculture and energy; THE COUNCIL OF THE EUROPEAN UNION 
Having regard to the Treaty establishing the 
European Community, and in particular Article 
99 thereof, 
unchanged 
unchanged 
unchanged 
unchanged 
Whereas fuels from agricultural sources present 
an advantage as flanking measures to the 
Community's agricultural policies notably by 
creating new demand for agricultural products 
and by reducing unemployment; 
Whereas, for the purpose of limiting harmful 
emissions, the development and use of less 
polluting fuels should be encouraged; unchanged 
Whereas the development of a new economic 
sector in this area calls for close collaboration 
between the parties involved; 
Whereas fuels produced from renewable 
agricultural sources have been identified in 
general as beneficial to the environment; unchanged 
Whereas a financial incentive should be 
provided to encourage the development of these 
fuels and bring that development to a level of 
sustained viability; Whereas a financial incentive should be 
provided to encourage the development of these 
fuels and bring that development to a level of 
sustained viability, while ensuring that this has 
no undesirable environmental or socio­
economic effects; 
Whereas the most effective way of providing 
this incentive is to reduce the rate of excise duty 
to be charged, unchanged 
HAS ADOPTED THIS DIRECTIVE: 
Article 1 
Without prejudice to the provisions on the 
taxation of motor fuels contained in Council 
Directive on the harmonization of excise 
duties on mineral oils and Council Directive 
on the harmonization of the structures of 
excise duties on mineral oils, Member States 
shall, in accordance with the provisions of this 
Directive, charge reduced excise duty on certain 
motor fuels produced from agricultural 
products. unchanged 
Article 2 
For the purpose of this Directive the products to unchanged 
be taxed at the reduced rate arc: 
1. Ethyl alcohol produced from agricultural 
products or products of vegetable origin 
(hereinafter described as bioethanol) falling 
within subheading 2207 20 00 10/80 of the 
integrated tariff of the European 
Communities, which is used directly of 
through a chemical modification. unchanged 
2. Methyl alcohol (methanol) falling within 
CN code 29 05 11 00, and produced from 
agricultural products or products of 
vegetable origin, which is used directly or 
through a chemical modification. unchanged 
Vegetable oil falling within CN codes 1507, 
1508, 1510, 1511 1512, 1513, 1514 and 
1515. unchanged 
4. Chemically modified vegetable oil produced 
from agricultural products and falling within 
CN code 1518. unchanged 
Article 3 
1. The rate of duty on bioethanol shall be unchanged 
not more than 10% of that charged on unleaded 
petrol within a Member State. 
2. The rate of duty on methanol as unchanged 
referred to in article 2 paragraph 2 shall be not 
more than 10% of that charged on unleaded 
petrol within a Member State. 
3. The rate of duty on vegetable oils, 
whether chemically modified or not, shall be not 
more than 10% of that charged on diesel within 
a Member State. unchanged 
4. Ten years after the entry into force of 
this directive, the rates mentioned in paragraphs 
1, 2 and 3 of Article 3 will be changed to 20%. 
Five years later, they will be changed to 30% 
and so on every five years until reaching 50%. 
5. The codes of good agricultural practice 
established in accordance with Article 4 of 
Council Directive 91/676/EEC of 12 December 
1991 concerning the protection of waters 
against pollution caused by nitrates from 
agricultural sources should be respected while 
granting the tax incentive provided for in this 
Article. 
Article 4 
Member States shall take all necessary measures 
to control the manufacture, storage, mixing and 
distribution of these products and in particular 
shall ensure that all operations conform to the 
general regime for the control of excisable 
products as set out in Council Directive unchanged 
Article 5 
For the first time not later than 31 December 
1997 and thereafter every two years, the 
Commission shall report to the Council on the 
fiscal, economic, agricultural, energy, industrial 
and environmental aspects of this measure. unchanged 
Article 6 
Member States shall bring into force the laws, 
regulations and administrative provisions 
necessary to comply with this Directive not later 
than 1 January 1993. 
When the Member States adopt such provisions 
they shall contain a reference to this Directive 
or shall be accompanied by such a reference on 
official publication. The Member State shall lay 
down the manner in which such reference shall 
be made. Member States shall bring into force the laws, 
regulations and amdinistrative provisions 
necessary to comply with this Directive not later 
than 1 January 1995. 
unchanged. 
This Directive is addressed to the Member 
States. Article 7 
unchanged 
Done at For the Council 
ISSN 0254-1475 
COM(94) 147 final 
DOCUMENTS 
EN 03 12 09 
Catalogue number : CB-CO-94-154-EN-C 
ISBN 92-77-67693-0 
Office for Official Publications of the European Communities 
L-2985 Luxembourg 
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