2002/550/EC: Council Decision of 27 June 2002 authorising the United Kingdom to apply a differentiated rate of excise duty to fuels containing biodiesel in accordance with Article 8(4) of Directive 92/81/EEC
Date: 2002-06-27
Institutions: Council of the European Union
Subjects: United Kingdom, diesel fuel, environmental protection, excise duty, security of supply, substitute fuel, tariff reduction

L 180/20

EN

Official Journal of the European Communities

10.7.2002

II

(Acts whose publication is not obligatory)

COUNCIL

COUNCIL DECISION

of 27 June 2002

authorising the United Kingdom to apply a differentiated rate of excise duty to fuels containing
biodiesel in accordance with Article 8(4) of Directive 92/81/EEC

(2002/550/EC)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community,

cents) per litre of biodiesel at current rates. Furthermore,
the reduction in excise duty proposed by the United
Kingdom is proportional to the percentage of biofuel
contained in the final product.

Having regard to Council Directive 92/81/EEC of 19 October
1992 on the harmonisation of the structures of excise duties
on mineral oils (1), and in particular Article 8(4) thereof,

(6)

Having regard to the proposal from the Commission,

The effective rates of excise duty are higher than the
applicable Community minimum rates,
in accordance
with Council Directive 92/82/EEC of 19 October 1992
on the approximation of the rates of excise duties on
mineral oils (2):

Whereas:

(1)

(2)

(3)

(4)

(5)

The United Kingdom has requested authorisation to
apply a differentiated rate of excise duty to biodiesel
used as road fuel either as pure fuel or blended into
diesel fuels up to 5 per cent volume in accordance with
EN 590.

The other Member States have been informed of the
United Kingdom's request.

recently, on 7 November 2001,

The development of renewable energies and biofuels in
particular has been encouraged in the Community since
1985. Most
the
Commission adopted an action plan and two proposals
for directives on encouraging the use of substitute fuels
in the transport sector, starting with regulatory and tax
measures designed to promote biofuels.

The derogation requested by the United Kingdom
authorities is therefore in line with the Community's
policy of developing the biofuel sector, in the interests
of protecting the environment and ensuring security of
energy supply.

The rate for biodiesel would be set at 20 pence per litre
below that for ultra-low sulphur diesel
(ULSD). This
equates to an excise duty of 25,82 pence (41,4 euro-

Community minimum
(per 1 000 l)

ULSD

Pure biodiesel

EUR 245

EUR 734,3 (1)

GBP 458,2

EUR 413,8

GBP 258,2

(1) Average

exchange

rate

in December

2001 was GBP 0,624

for EUR 1.

(7)

(8)

The requested reduction should concern biodiesel, a fuel
made from biomass within the meaning of Article 2(b)
of Directive 2001/77/EC of the European Parliament and
of the Council of 27 September 2001 on the promotion
of electricity produced from renewable energy sources in
the internal electricity market (3), or made from used
fried oils, to be used as a road fuel.

The differentiated rate would apply to pure biodiesel at
the point of production or import. The biodiesel can
then be used either as pure fuel or be blended into diesel
fuels. Duty on imported blends would be payable at the
appropriate rates for the constituent parts in the relevant
proportion.

(2) OJ L 316, 31.10.1992, p. 19. Directive as last amended by

(1) OJ L 316, 31.10.1992, p. 12. Directive as last amended by

Directive 94/74/EC (OJ L 365, 31.12.1994, p. 46).

Directive 94/74/EC.

(3) OJ L 283, 27.10.2001, p. 33.

10.7.2002

EN

Official Journal of the European Communities

L 180/21

(9)

(10)

(11)

(12)

Production costs of biodiesel exceed those of conven-
tional diesel, and its retail price would therefore be
uncompetitive without
the duty reduction. The duty
reduction is intended to offset the additional production
costs. It will enable biodiesel to be sold at a similar
pump price to conventional diesel.

The Government of
the United Kingdom should
annually review the production cost of biodiesel and
thus monitor that no overcompensation takes place.

The authorisation granted should apply for a period of
five years.

reductions and
The Commission regularly reviews
they do not distort
to check
exemptions
the internal
competition or hinder the operation of
market and are not
incompatible with Community
policy on protection of the environment, energy and
transport,

that

HAS ADOPTED THIS DECISION:

Article 1

1.
The United Kingdom is hereby authorised to apply differ-
entiated rates of excise duty to road fuel containing biodiesel
and on biodiesel used as pure road fuel.

Biodiesel is a fuel made from biomass, within the meaning of
Article 2(b) of Directive 2001/77/EC, or made from used fried
oils to be used as a road fuel.

The reduction in excise duty shall not be greater than the
2.
amount of excise duty payable on the volume of biodiesel
present in the products referred to in paragraph 1 eligible for
the reduction.

The rates of duty applicable to the products referred to in
3.
paragraph 1 shall comply with the terms of Directive 92/
82/EEC and in particular the minimum rate laid down in
Article 5 thereof.

Article 2

Based on an annual review by the United Kingdom, the reduc-
tion in excise duty shall be adjusted to avoid overcompensating
for the extra costs involved in the manufacture of biofuels.

This Decision shall expire on 31 March 2007.

Article 3

Article 4

This Decision is addressed to the United Kingdom of Great
Britain and Northern Ireland.

Done at Luxembourg, 27 June 2002.

For the Council

The President

M. ARIAS CAÑETE