Now, enterprises running on biofuels pay a CO2 emissions tax.
The Ministry of Energy of Ukraine says it has published for public discussion a draft law that lays down a zero tax rate for carbon dioxide (CO2) emissions at plants running on biofuels.
"The adoption will contribute to an increase in biofuel energy generation in Ukraine and future transition from fossil fuels (coal, gas, and peat) to this type of energy source, which is produced from biologically renewable organics," the ministry's press service said on April 8.
Now, enterprises and other business entities that burn biofuel at stationary pollution sources also pay a tax on carbon dioxide emissions at UAH 10 (US$0.36) per tonne, as do businesses running on other energy sources and emitting pollutants.
"However, this state of affairs doesn't correspond to global practice. According to the methodology of the Clean Development Mechanism [CDM] of the United Nations Framework Convention on Climate Change [UNFCCC], biofuels are considered CO2-neutral fuels, because when burning, they produced as much as carbon dioxide as was absorbed by plants during growth," the press service added.
The EU does not apply taxes on CO2 emissions to such energy production facilities. For example, Denmark levies taxes on the production, processing, storage of fossil fuels used for heating, in particular, an energy tax on petroleum products, coal, lignite, and coke, or a CO2 tax on certain energy products. Meanwhile, biofuels are exempt from taxation. A similar situation is also observed in Sweden and the UK, where fossil fuels are taxable but biofuels are exempt from taxation.
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The document can be found on the ministry's official website. Public discussion of the bill will last a month.