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Romanian biofuel targets pushed back so government can raise money for the state budget

Mihai Stoica reports

A 7 eurocent tax per liter of fuel at the pump will take effect on the 1st of April in Romania, pushing higher intermediate targets for biofuel blends in gasoline and diesel closer to 2020. Romanian PM Victor Ponta negotiated this measure with fuel producers in December last year in an attempt to raise more money for the state budget.

This comes during a time when tough negotiations are taking place at EU level to revise 1st generation biofuel mandates that recent studies have shown to generate more emissions than previously thought through ILUC and other social and environmental issues. Still, what is non-negotiable is the 10% renewable energy target for 2020 set for the transport sector of each MS.

In Romania, 2014 should have seen an increase of the ethanol blend in gasoline up to 6% – a 1% increase from 2013 – marking the introduction of E10 type fuel on the market, as opposed to the E5 fuel currently used. Instead, PM Ponta promised fuel producers a .5% reduction from last year’s 5% blending mandate and other amenities. The offer was aimed at making sure fuel prices would not rise further – as a consequence of investments in higher quality fuels – after the introduction of the new tax.

In effect, the whole calendar for intermediate biofuel targets suffered changes, the government postponing higher blending targets for both biodiesel and bioethanol closer toward 2020. This marks the second time Romanian biofuel legislation changes, the last modification taking place at the end of 2012, after the initial introduction of the law in 2011.

As a consequence of these measures in concert with negotiations taking place at European level to limit the use of unsustainable food-based biofuels, Romania must now consider supporting the development of advanced biofuels, otherwise it risks not meeting the 10% renewable energy target for transport by 2020.




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