Bulgarian biofuel producers have threatened to file a lawsuit against the Customs Agency after the agency said that it would impose an excise on pure biofuel products starting from October, the National Biofuels Association in Bulgaria has said.

Deputy Finance Minister Kiril Zhelev said in mid-October that biofuel producers will have to pay excise duties until the European Commission issues a ruling saying that the tax incentive is not illegal state aid. Bulgarian authorities have not submittted such a request over complications in calculating the costs of fossile fuels in the country, which is part of the package that has to be submitted to the EC.

Dimitar Zamfirov, the chairperson of the biofuels association, told Dnevnik that the organisation would seek court action as soon it receives an official notification of the new excise duties, arguing that it was against the law.

Under Bulgarian legislation, biofuels bear a zero excise duty, but removing the tax incentives brought the collateral paid for their storage to the level of the excise on fossile fuels. Biodiesel will be taxed as gas oil with 600 leva for 1000 litres, and the tax rate will be 1100 leva for 100 litres of pure bioethanol.

Biofuel producers have said that the measure would put them on the brink of bankruptcy and argued that that the EC's state aid ruling was not mandatory, only recommended.

The same reason stalled the introduction of a lower tax on biofuel blends. Mineral diesel and unleaded petrol with a four to five per cent content of biofuel are eligible for a three per cent tax break, resulting in a net decrease of costs by 0.18 and 0.21 a litre, respectively.

Source: Dnevnik.bg