The VAT of 5 percent is maintained for SOLID BIOFUELS of wood until the end of 2023

biomass pellet price
The Government approves a royal decree-law with measures to alleviate the economic and social consequences derived from the Ukrainian War, maintaining reduced VAT for pellets, briquettes and wood for firewood used for heating.

The measures come into force as of January 1, 2023 and will mobilize around 10.000 million euros of public resources that will be used mainly to serve the groups most vulnerable to the increase in the price of food and other basic necessities and to the rise of the cost of energy.

The first section of the royal decree-law refers to tax measures in the field of energy, citing in its first paragraph the reduction in VAT on solid biofuels, together with natural gas:

"Given that the situation generated by the increase in natural gas prices persists, it is considered appropriate to extend, until December 31, 2023, the reduction to 5 percent of the tax rate of the Value Added Tax that falls on all the components of the invoice for deliveries of natural gas, as well as deliveries of briquettes or "pellets" from biomass and wood for firewood used as fuel in heating systems, in order to reduce their amount”.

The extension of the VAT reduction from 21% to 5% for pellets, briquettes and firewood during 2023 is good news for biofuel consumers and for the business sector and in the opinion of AVEBIOM it should be a step without turning back to establish the measure definitively.

While the indiscriminate rebate on gas can discourage energy saving, a definitive reduction in VAT on all solid biofuels of national origin - pellets, firewood and briquettes and others such as olive pits, chips and shells of nuts - would accelerate adoption of a renewable, sustainable and local technology for heating.

News published in  AVEBIOM

More information

Royal Decree-Law 20/2022, of December 27, on response measures to the economic and social consequences of the Ukrainian War and support for the reconstruction of the island of La Palma and other situations of vulnerability has been published in BOE no. 311, of December 28, 2022.