Bulgarian producers of biofuel were being levied with excise duty in violation of the Act on Excise Duty and Tax Warehouses (AEDTW), Dimitar Minchev, manager of the firm Bulmarket said during a conference on the South-East European market of biofuel, as quoted by investor.bg on October 23.

AEDTW stipulated that biodiesel and bioethanol produced in Bulgaria were subject to zero excise duty levying.

The producers of the so-called “energy crops” should receive direct subsidies from the Ministry of Agriculture, but the latter had not yet settled the matter and was not ready to start the encouragement procedure, said Minchev.

Bulgaria had not yet set the so-called “reference values” under the European Commission (EC) Biofuel Directive. The directive and the EC strategy attached to it set a two per cent market share for biofuels in 2005, which was to reach 5.75 per cent by 2010. To implement the directive, many EU member states were relying on fuel tax exemptions, facilitated by the another EC directive – on energy taxation. In accordance with the latter, Parliament in Sofia approved the zero excise duty, which has not yet been enacted.

Minchev said there were projects in Bulgaria for the production of biofuel worth hundreds of millions of leva. Currently however, production at most of the production facilities had been frozen.