The sector associations AVEBIOM and APROPELLETS, which give support and voice to more than 250 companies related to the value chain of energy generation with biomass in Spain, regret the end of the reduced VAT of 10% for pellets and firewood, which it has returned to 21% since July 1.
Both associations propose that a definitive reduction of VAT on all solid biofuels of national origin, which include pellets, firewood, olive pits, chips and nut shells, to accelerate the adoption of renewable, sustainable and local technologies for heating.
On June 30, the Royal Decree that temporarily maintained a reduced VAT of 10% for pellets and firewood expired. Both the Spanish Biomass Association (AVEBIOM) and the Spanish Association for the Promotion of the Pellet Sector (APROPELLETS) believe that greater commitment and support on the part of the government is necessary towards the generation of energy with biomass as a valuable option in the transition towards a more sustainable energy system.
In Europe there is a reduced VAT for solid biofuels
France, Portugal, Germany, Austria, Belgium, the Baltic countries and others have maintained a reduced VAT for biofuels from solid biomass for years. This represents a measure of real long-term support against fossil fuels and is part of energy policies that promote the transition towards more sustainable solutions.
In Spain, solid biofuels do not have fiscal support and promotion measures differentiated from fossil energy supplies. Compared to the energy policies of neighboring countries, with short-term plans and objectives for the abandonment of fossil fuels for heating, in Spain, heating oil and natural gas have support measures such as tax reductions or with a policy of regulated tariffs that represent a hidden subsidy to these sectors, and that encourage the consumption of fossil fuels.
The government should take as a sign of alarm and failure of its energy policies, the increase in heating oil consumption during 2023 and so far in 2024. Years in which the weather, far from promoting the demand for heating, has reduced.
Solid biofuels are a competitive option, offering savings in domestic heating costs that can vary between 10% and 70% compared to heating oil, natural gas and electrical systems.
Although biomass prices increased due to known factors, reducing savings to a certain extent, solid biofuels remain an attractive alternative. With greater institutional support and better dissemination of information, these biofuels can regain and potentially increase their popularity among consumers.
In support of a local rural sector
Fiscal support for solid biofuels not only benefits bioenergy companies and consumers, but also boosts the supporting agricultural and forestry sectors in a perfect example of a circular bioeconomy. In these areas, the energy recovery of waste and by-products can be essential to maintain the viability of the activity. Thus, a reduced VAT would benefit thousands of companies and workers in rural areas, strengthening the local economy and promoting sustainable use of resources.
For a green and circular economy at a low cost
A reduced VAT of 10% for solid biofuels would bring multiple benefits. Although we understand that the government, in the midst of a fiscal policy that seeks to balance its accounts, is assessing the cost that this measure would imply, we consider that the advantages far outweigh the concerns.
With the estimated prices and consumption of solid biofuels at the domestic level, the reduction in income would be less than 100 million euros, but the possible increase in collection due to the increase in consumption and other tax revenues that would also have to be taken into account. could be obtained by other means from the sector.
From AVEBIOM and APROPELLETS we call on the government to reconsider the implementation of a reduced VAT for solid biofuels, the equipment in which they are used and the energy generated in biomass heat networks.
This measure would facilitate the transition towards a more sustainable energy system, would contribute to creating and maintaining employment in rural areas, would allow consumers to save on their energy bills, and would establish itself as a pillar in the fight against climate change by reducing dependence on imported fossil fuels.