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Bioenergy and biogas taxation in current legislative frame in Estonia

Estonian University of Life Sciences and Estonian Biogas Association organized a roundtable discussion event of project Baltic Manure in April 2013 about bioenergy and biogas taxation in current legislative frame in Estonia.

Participants in the event were representatives of the ministries, officials of the Estonian Tax and Custom Board, Estonian Competition Authority, universities and companies. Policy Advisor of European Biogas Association participated via Skype and gave a presentation.

For the background, 1.04.2012 ended tax excise exception for biofuels. In the beginning of the year 2013, Estonian Tax and Customs Board sent to local biogas producers a note, that they must pay the excise tax at the same rate as natural gas. Estonian Tax and Custom Board have position that biogas and biomethane has CN code as natural gas (2711 2100) and fuel excise tax will be applied in the case of heat energy production.

This approach has confused operators of biogas plants and experts of renewable energy. Biogas is not a fossil fuel and biogas quality differs from natural gas. The CN code for biogas is 2711 2900 in EU documents, there is no basis for biogas excise tax.

Programme of event (presentations in Estonian):

  1. Introduction Argo Normak and Ahto Oja
  2. Biogas Technologies, properties of biogas and biomethane by Tauno Trink, Estonian University of Life Sciences, project Baltic Manure
  3. Positions of Estonian Biogas Association about biogas taxes by Ahto Oja, Estonian Biogas Association
  4. Environmental impact of biogas, social benefits by Heiko Heitur, Ministry of Environment
  5. Biogas excise tax by Peeter-Tanel Orro, Estonian Tax and Custom Board
  6. Biofuels in Estonia 2020 by Siim Meeliste, Ministry of Economic Affairs
  7. Competitiveness of biogas by Riina Randmaa, Estonian Competition Authority
  8. Biogas as important renewable source in Estonia by Rene Tammist, Estonian Renewable Energy Association
  9. Taxation examples of biogas in Europe by Susanna Litmanen, European Biogas Association (Skype)
  10. Discussion (moderated by Argo Normak)

There was an open mic after presentations, participants asked questions from lecturers and discussed about the current situation. Discussion topics were:

  • development of biogas sector;
  • biogas and biomethane taxes; how to organize workgroup of ministries and specialist about renewable energy taxes;
  • need for new definitions of biofuels in Estonian legislation;
  • current methodology for price calculation of heat for CHP plant operator;

Most of the questions were addressed to Estonian Tax and Custom Board and Ministry of Finances. They gave extra explanations about their position in frames of existing legislation and kept opinion that biogas, biomethane are natural gas type goods and tax should be paid. Stake holders of Biogas sector had different opinion and presented arguments that biogas cannot be as natural gas and therefore existing legislation does not fix taxes for biogas.

Participants agreed that in the near future they will form a small workgroup who deals with biogas and biomethane issues to improve Estonian law and to find best legal agreement in current situation.

Participants of the event, photo by Tauno Trink.

Approximately 40 participants attended of this event. During the event Baltic Manure project leaflets and brochures were distributed to all participants. Presentations are available here

Article by Tauno Trink and Argo Normak, Estonian University of Life Sciences


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