Press Release: State aid: Commission authorises Italian aid scheme to promote biodiesel

The European Commission authorised, under EC Treaty state aid rules, an Italian tax reduction to stimulate the production and use of biodiesel. The measure modified and prolonged a previously approved scheme and introduced a supply obligation for biofuels. The coexistence of a supply obligation and a tax reduction is a novelty and it cannot be predicted at this stage how it will affect the market. Despite these uncertainties there was no risk of overcompensation because the proposed tax reduction would only apply to part of the released biodiesel and would cover only part of the difference in production costs The aid was therefore found compatible with the Single Market.