Brussels, 27/09/2000 (Agence Europe) - The Court of First Instance of the European Communities partially cancelled a decision by the European Commission to authorise French aid schemes in favour of bio-ethanol. It considers that the European Executive was wrong in approving this regime as it had not been proved that it really corresponded to the financing of a pilot project for the technological development of non-polluting products. The Court of First Instance specifies, however, that the Council could envisage authorising such schemes, on the basis of other provisions of the directive on the system of excise duties on mineral oils (Directive 92/81). Several Member States apparently obtained this kind of dispensation within the framework of programmes aimed at promoting the use of more environmentally friendly fuels.
The European Commission had approved, in April 1997, a scheme for aid to biofuels, under the 1992 finance law in France, consisting of exonerating from excise duties the sunflower and rape methyl esters used in the substitution of domestic fuel and gasoil, on one hand, and, on the other, the ethylic alcohol developed from cereals, Jerusalem artichokes, potatoes and beetroot and incorporated in refined fuels and petrol (bio-ethanol).
The Court of First Instance was referred a complaint by BP Chemicals Ltd, main European producer of synthetic ethanol, rival product to bio-ethanol, calling for the annulment of the Commission's decision.
The CFI recognised that Community legislation on excise enabled Member states to provide for exemptions or reduced rates for pilot projects aimed at the technological development of less polluting products. It nevertheless considers that it was not demonstrated that the system authorised by the Commission was aimed at fundamental or applied research, nor the technical feasibility of the production of bio-fuels. This system, as it was presented, tends rather to evaluate the economic performance and industrial capacities of the existing production bio-fuel plants. The annulment pronounced by the Court of First Instance only refers to aid to bio-ethanol and not methyl ester, for which BP's appeal was deemed inadmissible.