Press Release: Commission raises no objections to a total exemption from excise duty in favour of biofuels in Germany

With effect from 1 January 2004, Germany intends to introduce a total exemption from the excise duty on mineral oil for pure and blended biofuels. Biofuels are defined as energy products derived from bio-mass. The duration of the measure is limited until 31 December 2009. The Commission approved the exemption on the basis of the Community Guidelines on State aid for environmental protection. This is because the exemption from excise duty is proportional to the percentage of biofuel included in the final blend. The higher the proportion, the greater the value of the potential reduction. In addition, the aid is limited to cover the difference between the cost of producing energy from renewable energy sources and the market price of conventional fuels.