Russia: Biofuel Bill to Go to Duma

The Federation Council, with the support of the Agriculture Ministry, has prepared a bill for introduction into the State Duma to lower the excise tax on bioethanol fuel to encourage the development of bioenergy in Russia. Tax breaks are being proposed for oil refineries that add alcohol to their fuel. This was announced by Deputy Chairman of the Federation Council Committee on Economic Policy Vladimir Gusev at the Fuel Bioethanol 2007 congress. The law “On the Bases for the Development of Bioenergy in the Russian Federation” would define the concept of “biofuel” and remove bioethanol from the jurisdiction of the federal law that regulates ethyl alcohol turnover. It would practically cancel all excise taxes fuel bioethanol by combining the excise on bioethanol with that of the fuel it is mixed with.
There is no bioethanol production in Russia yet, but it is expected to cost about 10 rubles per liter to produce. The excise tax on ethyl alcohol and alcohol-containing products (23 rubles per liter for ethyl and 162 rubles per liter of alcohol for alcohol-containing products) would raise the price of production by several times.

The next step in the process, the senators say, should be lowering the excise tax on gasoline with added ethanol. Gusev told Kommersant that Ukraine has had success by halving the excise tax for ethanol-containing gasoline.

Kommersant