IISD overestimates EU biofuel subsidies, issues correction

By Erin Voegele | August 28, 2013

In mid-August, the International Institute for Sustainable Development drastically reduced its estimate of the value of excise tax exemptions that European Union member states provide to the biofuels industry, dropping its estimate from €5.8 billion ($7.74) in 2011 to €2.047 billion. The original estimate was made in April as part of the IISD report titled “Biofuels—At What Cost? A review of costs and benefits of EU biofuel policies.”

As part of the correction, the IISD has published an addendum to that study that corrects the estimate and provides background on the calculations used in the analysis. In the addendum, the IISD notes that certain calculations made to generate the estimates for the original report overestimated the volume of biofuels eligible for excise tax exemption in certain countries.

For ethanol, the excise tax exemption has been reduced by €2.048 billion for ethanol, resulting in a new estimate of €562 million in excise tax benefits. The estimate from biodiesel was also reduced by €1.709 billion to €1.485 billion.

Using the new excise tax exemptions value, the addendum reducing the overall estimate of EU biofuel subsidies from between €9.272 billion and €10.653 billion to a level of between €5.515 billion and €6.896 billion.