Biodiesel tax exemption scrapped

Norway is planning to scrap a tax exemption for biodiesel, joining a growing number of countries taking the view that users of biofuels should pay for them instead of taxpayers.

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The Norwegian prime minister Jens Stoltenberg supported removing the exemption, which attracted opposition from MPs and some NGOs in Norway. He said biofuels have some impact, and motorists using public roads should contribute to their maintenance.

The legislation that removes the exemption for tax breaks is imposing a biofuels sales obligation that requires 2.5% of all transport fuels to be from biomass in 2009 through blended fuels. These blended fuels will still be completely exempted from the country's carbon dioxide tax, even though doubts remain over biodiesel's CO2 impacts compared with oil-based fuels.

T&E has said that, while the replacement of subsidies with mandates is a good thing, such mandates still miss the point, which is that overall greenhouse gas savings should be encouraged, not a specific fuel or technological process.

• Five million hectares of land in Indonesia, much of it forested, is being targeted by powerful companies seeking to cash in on projected demand for biofuels derived crom cops such as palm oil. That is the claim made in a report 'Up for Grabs' by the Environmental Investigation Agency (EIA), which says it has evidence of massive deforestation and widespread exploitation of local communities in the Papua provinces, some of it with government approval.