Internal Market

A number of internal market issues can have important impacts on the ethanol industry. These issues include taxation of energy products and REACH (Registration, Evaluation and Authorisation of Chemicals).

Energy Taxation Directive

In March 2008, the European Council requested that the Energy Taxation Directive (ETD) be amended in order to reflect the EU's objectives defined in the EU Climate Package and also to support Directive 2003/87 that established a carbon emissions trading scheme within the Community (the so-called ETS Directive).

The revision of this Directive is important for European ethanol producers because the existing ETD ( Directive 2003/96) does not differentiate excise between fuels by the level of GHG emissions or the energy density. Introducing a taxation system on energy products that includes these key elements will be beneficial for renewable energy and the ethanol sector.

The European Commission drafted a proposal but due to political sensitivities, which are always linked to taxation issues, the proposal is still not submitted to EU Member States or the Parliament.

REACH

In early 2007, Europe adopted a new regulatory framework called REACH (Registration, Evaluation and Authorisation of Chemicals) to replace an ineffective and inefficient system of about 40 Community Directives and Regulations on chemicals. The REACH legislation covers 30 000 chemical substances alone.

Under REACH a producer or an importer (i.e. a legal entity) who processes more than 1 tonne of a chemical substance per year is required to register in a central database. Therefore, every European producer or importer of ethanol, or of ethanol-containing preparations (such as perfume, detergents, paint, ink, etc), has to register under REACH.

Pre-registration of legal entities ended on 1st December 2008 and the ethanol registration will take place before 1st January 2013.

A consortium called Ethanol Reach Association has been set up to assist ethanol companies in registering their products under REACH. For further information on the Ethanol Reach Association, click here.