Mass Media

Yesterday the deputies of the BYuT faction registered a bill in the Verkhovna Rada, in which they proposed to introduce tax incentives for manufacturers of biofuels. As a result, the cost of mixtures with biofuel additives will be 10-15% lower than gasoline cost. Adoption of the document is profitable to future exporters of biofuels to the countries of the European Union, experts say.

It is proposed to exempt the manufacturers of biodiesel from payment of excise duty and reduce the excise duty on motor mixtures by 5 euro for each percentage of the content of biofuels. Now the excise duty rate on gasoline used for motor mixtures is 30 euro/t.

According to Sergei Pashinskii, if the bill is passed, the cost of production of biofuels and bioethanol will be on average 30-40 % less than gasoline. "The retail cost of gasoline mixtures with a mass content of bioethanol up to 10% will be on average 10-15% cheaper than gasoline," Mr. Pashinskii says.

Gennadii Riabtsev, Deputy Director of Research and Development Center Psikheia, notes that many of the initiatives proposed in the bill are not new. "They were developed as early as in 2003 after the issuance of a presidential decree on stimulating the production of biofuels," Mr. Riabtsev recalled. According to him, this bill is beneficial to companies which expect to receive a high margin from the export of biofuels and bioethanol to the countries of the European Union. "The countries of EU are already short of raw materials for the production of biofuels. It increases every year," he says. The intention to export biofuels and bioethanol was previously announced in the Ukrspirt concern (see Kommersant of October 5). In October, the Ministry of Agrarian Policy approved the development program of the alcohol industry for 2007-2011, according to which it is planned to produce biofuels at 15 spirits distilleries. In addition, Ukrspirt attracted a private investor to develop a program for the production of bioethanol at nine more spirits distilleries. The tender was won by Techinservice group, a manufacturer of equipment for sugar factories.

People's deputies of the Party of Regions and the Our Ukraine – People's Self-Defense Bloc which were interviewed by Kommersant promised to promote the bill. "We will have the opportunity to reduce the dependence of the state on energy imports and increase the level of the country's energy security. This is a promising project, and our faction is ready to support it no matter what political force initiated it," Mikhail Chechetov, People's deputy (Party of Regions), said. "The biofuels market is promising, I am sure that it is necessary to prescribe a clear legislative regulation of this market," Yurii Kliuchkovskii (NUNS (Our Ukraine – People's Self-Defense Bloc)), People's deputy, said.

Source: Kommersant