Bioenergy Association of Ukraine proposes changes to the law on abolition of carbon tax

On July 16, the Verkhovna Rada of Ukraine adopted as a basis the draft law No. 9596 on amendments to the Tax Code of Ukraine to establish a zero hryvnia rate of environmental tax on carbon dioxide emissions for facilities that produce such emissions as a result of biofuel combustion.

“We are looking forward to considering this important draft law in the second reading. We have already sent a letter with our team’s proposals to the relevant committees,” the Association said.

UABIO proposes, firstly, to include biomethane or bioethanol plants in the register of plants that emit carbon dioxide as a result of biofuel combustion.

This is worth doing, as carbon dioxide emissions from these plants are of biogenic origin and do not increase the greenhouse effect. In addition, such a decision is in line with international practice and will facilitate the production of biomethane and bioethanol.

Secondly, the definition of biofuels should be finalized to include biogas and biomethane.

This should be done because the current version of the draft law does not clearly state whether biogas and biomethane will be subject to the zero hryvnia rate. In addition, biofuels are currently defined as fuels consisting exclusively of biomass. The EBA believes that the word “consisting” should be replaced with “produced” from biomass, since biogas and biomethane are not composed of biomass, but rather are produced from it as a result of fermentation processes. This will also be in line with the definition of the term “biofuel” in the Law of Ukraine “On Alternative Fuels”.