Spain has room to implement a tax system that favors the use of renewable fuels, in line with what is already happening in more than half of the member states of the European Union, including Germany, Italy, France, or Portugal. This is evident from the report "Differentiated Taxation for Renewable Fuels," prepared by WSP (formerly Ricardo) and presented by the Platform for Renewable Fuels.
The presentation, held at the CEOE headquarters in Madrid, has served to highlight the current situation of "tax contradiction" in Spain, where renewable fuels bear the same tax burden as fossil fuels, despite allowing for emissions reductions of up to 87%, as evidenced by the Tour d'Europe initiative through the Digital Fuel Twin traceability and certification system.
According to the platform, the study proposes two "realistic" scenarios within the current legal framework that contemplate price reductions of over 38% in renewable diesel and 33% in renewable gasoline. These reductions are based on a decrease in the Special Tax on Hydrocarbons (IEH), following one of the lines of action of the current Comprehensive Response Plan to the Crisis in the Middle East to contain the rising costs of fuels due to the war in Iran.
In the so-called immediate transition scenario, it is proposed to introduce a tax incentive linked to the percentage of renewable fuel present in the blends. The progressive transition scenario towards a tax model based on emissions, for its part, proposes an incentive directly associated with the effective reduction of greenhouse gas emissions.
Taxation as a Lever for Competitiveness
The president of CEOE, Antonio Garamendi, has emphasized that "taxation is a lever for competitiveness, especially in the case of renewable energies," such as renewable fuels, and has called for "a regulatory framework that promotes both supply and demand if we want to unleash the full potential of renewable fuels."
In the same line, the vice president and president of the Sustainable Mobility Council of CEOE, Helena Antolín, has defended taxation as a key instrument for decarbonization, considering that "a taxation that is better aligned with emission reduction generates demand" and allows solutions such as renewable fuels to gain competitiveness against other alternatives.
The spokesperson for the Platform for Renewable Fuels, Inés Cardenal, has emphasized that "these scenarios would allow aligning the legal framework with the recommendations of the Letta Report, with the proposed reform of the Energy Tax Directive, and with the majority of our European partners, because Spain cannot continue to be an exception in Europe."
Technological neutrality and tax treatment
The platform argues that the current design of the taxation of renewable fuels conflicts with the principle of technological neutrality advocated by Mario Draghi in his report on the competitiveness of the European Union. In practice, they denounce, not all available and proven solutions that reduce emissions receive the same tax treatment in Spain.
While renewable fuels do not have specific incentives, there are tax advantages and direct aid aimed at electrified and hydrogen vehicles, considered zero CO2 emissions at the exhaust pipe. In light of this asymmetry, the 32 members of the Platform demand that the Government of Spain move towards a tax framework that recognizes the contribution of renewable fuels to emission reduction and, in this way, promotes their consumption.
The entity states that "the renewable fuels industry is ready to continue increasing production and a greater penetration of renewable fuels will allow us to achieve, more efficiently, the shared goal of emission neutrality by 2050."
In the meeting, the associate director of Sustainable Transport at WSP (formerly Ricardo), Aleix Pons; the general secretary of Anesdor, José María Riaño; the general director of ASTIC, Ramón Valdivia, and the general director of Faconauto, José Ignacio Moya, have also participated.
The Platform for Renewable Fuels, which has just celebrated its fifth anniversary, brings together 32 members who, collectively, represent more than 348,700 companies linked to the entire value chain of renewable fuels, from large multinationals to micro-enterprises and freelancers, and support more than 5.9 million jobs, more than 25% of the total employed in Spain.