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Biofuels in Poland

General

The main items of legislation governing the organisational, legal and economic conditions of biocomponent and liquid biofuel production in Poland are the Biocomponents and Liquid Biofuels Act and the Fuel Quality Monitoring and Control Act of 25 August 2006 (Journal of Laws No 169, item 1200, as amended). Both acts establish the right conditions for dynamic growth in this market.

 

Renewables in transport: biofules

 

Poland currently promotes the use of biocomponents by offering financial incentives, above all through a system of tax exemptions and tax relief offered on the basis of successive regulations of the Minister for Finance. Incentives in the form of exemptions from excise duty for fuels containing biocomponents, which have applied (since 1 May 2004) under the Regulation of the Minister for Finance of 26 April 2004 on exemptions from excise duty (Journal of Laws 2006, No 72, item 500, as amended) were reduced following the entry into force of the Regulation of the Minister for Finance of 22 December 2006 amending the Regulation on exemptions from excise duty (Journal of Laws No 243, item 1766) on 1 January 2007. The introduction of these provisions was dictated by the need to bring national regulations into line with EU legislation and resulted in a weakening of the support mechanism for biocomponents added to diesel (by reducing the level of exemption from excise duty for liquid fuels containing biocomponents and for liquid biofuels). Under the provisions in force since 1 January 2007 the following are exempt from excise duty:

1) biocomponents intended for use in liquid fuels and liquid biofuels, meeting the relevant

quality requirements;

2) The following fuels, meeting the relevant quality requirements and containing over 2% of

biocomponents:

a) petrol – PLN 1.50 on each litre of biocomponents added to it,

b) diesel – PLN 1.00 on each litre of biocomponents added to it;

3) biocomponents used as direct fuel and meeting the quality requirements specified in

separate regulations – PLN 1 680 per 1 000 l.

 

The European Commission, to which the above arrangements were notified as constituting State aid, found (in its decision of 8 March 2007) that they were compatible with the EC Treaty. It should be pointed out here that, in 2007, the aforementioned excise duty exemptions granted for using biocomponents in fuels amounted to PLN 24.3 million.

Preferential excise duty treatment will be enhanced as a result of the Act of 11 May 2007 amending the Excise Duty Act and certain other Acts (Journal of Laws No 99, item 666), which lays down, amongst other things, that excise duty rates will be as follows for the products specified below:

1) For products made by blending petrol with biocomponents and containing over 2% biocomponents, the excise duty charged on the petrol (PLN 1 565 per 1 000 l) shall be reduced by PLN 1.565 for each litre of biocomponents added to the petrol, subject to the minimum excise duty payable being PLN 10.00 per 1 000 l;

2) For products made by blending diesel with biocomponents and containing over 2% biocomponents, the excise duty charged on the diesel (PLN 1 048 per 1 000 l) shall be reduced by PLN 1.048 for each litre of biocomponents added to the diesel, subject to the minimum excise duty payable being PLN 10.00 per 1 000 l;

3) For biocomponents intended for use as direct fuel in internal combustion engines, the rate will be PLN 10 per 1 000 l.

Before the entry into force of the Biocomponents and Liquid Biofuels Act, National Indicative Targets were set (on the basis of Article 3(1)(a) of Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport) by the Minister for Economic Affairs in consultation with interested Ministers. The national Indicative Targets set in this manner (based on the energy content of transport fuels) were:

- 2005 - 0.50%,

- 2006 - 1.50%,

- 2007 - 2.30%,

The entry into force of the Biocomponents and Liquid Biofuels Act changed the way in which National Indicative Targets are set. Pursuant to Article 24(1) of the Act, every three years, by 15 June of the current year, the Cabinet issues a Decree setting the National Indicative Target for the coming six years, taking into account the availability of raw materials and production capacity, the potential of the fuel industry and the relevant European Union regulations. The Cabinet Decree of 15 June 2007 on National Indicative Targets for 2008-13 (Journal of Laws No 110, item 757) sets the following National Indicative Targets:

-2008 - 3.45%;

-2009 - 4.60%;

-2010 - 5.75%;

-2011 - 6.20%;

According to the Energy Regulatory Office (ERO), the production volume of bio-components produced by all domestic manufacturers in 2009 amounted to 600.1 thousand. t, of which ethanol accounted for 130.7 thousand. t, esters of 364.7 thousand. t, and pure vegetable oil 104.7 thousand. tons. Including last year Polish manufacturers sold 540.6 thousand. t bio, of which foreign companies sold only 24.4 thousand. t of bioethanol and 24 tons (!) esters. In 2009, Poland has been placed in the sale of 56.2 thousand. tons bioethanol, 355.7 thousand. tons esters and 104.3 thousand. tons of pure rapeseed oil. In the case of esters has been a substantial increase in sales of domestic production. It was more than twice in 2008, when it reached 157.1 thousand. tons.

Sales of pure rapeseed oil has also increased - from 32.0 thousand. t in 2007 and 76.2 thousand. t 2008 - but due to loss of exports to total sales of bio-component has been reduced (compared to 151.8 thousand. t in 2007 and 131.4 thousand. t in 2008). We also sell bio-ethanol was lower both in comparison to 2008, when it amounted to 70.4 thousand. t, and 2007 (64.2 thousand. t).

The EU Directive permits the increase in content in the traditional bio-fuels to 7 percent. for diesel and 10 percent. for gasoline in place of the existing 5 percent. Amendment of regulations in Poland did not exist, so there is no so far. According to current calculations, to achieve the expected level National Indicatory Aim (NCW)  this year with no admission of fuel B7, you will need to launch 320 thousand. m cubic. B100. Meanwhile, last year managed to sell only 150 thousand. m cubic. this fuel.

As a result, a shortage of 170 thousand. m cubic. fuel companies threatens about 2, 3 billion penalties, or ten times more than in 2009, both companies have to make the implementation of NCW. Under current law, for every tone of bio-NCW below the level of the year the company has to pay 17 thousand. . By comparison, in Germany it is only a few hundred euros.

Sources:

Report to the European Commission for 2008 under Article 4(1) of Directive 2003/30/EC of the European Parliament and of the Council of 8 May 2003 on the promotion of the use of biofuels or other renewable fuels for transport, Poland, September 2008,

Information from biofuels sector representatives, 2010



Last update: December 2010


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