Government reneges on biofuel tax breaks / News / The Foreigner

Government reneges on biofuel tax breaks. CO2-reduction measures put on ice. The Labour Party (Ap) has proposed cutting existing fuel tax concessions on biodiesel. Whilst manufacturers say that increased prices will mean they’ll be forced to move production out of the country, both environmentalists and the Far Right accuse the government of short-sightedness. Betrayal of trust Ketil Solvik-Olsen - FrP's spokesmanGAD/Wikimedia CommonsKetil Solvik-Olsen, the Progress Party’s (FrP) energy and environment spokesman, claims it shows the government to be lacking in any long-term policies. He believes they’ve shot themselves in the foot.

frp, ketil, solvik-olsen, bellona, frederic, hauge, ap, sibjoern, johnsen, norske, skog, tom, bratli, norwegian, government, biodiesel, tax



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Government reneges on biofuel tax breaks

Published on Wednesday, 18th November, 2009 at 06:00 under the news category, by Michael Sandelson   .
Last Updated on 26th November 2009 at 12:47.

CO2-reduction measures put on ice.

Biodiesel pump
Biodiesel pump
Photo: Chixoy/Wikimedia Commons


The Labour Party (Ap) has proposed cutting existing fuel tax concessions on biodiesel. Whilst manufacturers say that increased prices will mean they’ll be forced to move production out of the country, both environmentalists and the Far Right accuse the government of short-sightedness.

Betrayal of trust

Ketil Solvik-Olsen - FrP's spokesman
Ketil Solvik-Olsen - FrP's spokesman
GAD/Wikimedia Commons
Ketil Solvik-Olsen, the Progress Party’s (FrP) energy and environment spokesman, claims it shows the government to be lacking in any long-term policies. He believes they’ve shot themselves in the foot.

“Neither businesses nor private people have had any warning. Their proposal ruins the trust between consumers and industry on one side, and the government on the other. The government says the right thing one year and the opposite the next. You need business on your side as a politician if you’re going to solve the climate problem,” he tells The Foreigner

Repercussions

Frederic Hauge, leader of the environmental agency Bellona, thinks the government’s decision will have both economic and environmental consequences.

“By imposing tax, the government has removed the element of predictability for investors in and producers of biofuels. We need incentives to be able to create a sustainable energy supply. We’ll lose the opportunity to create new jobs and cut emissions if producing it becomes more expensive.”

This is confirmed by Tom Bratli, vice-president of corporate affairs in Norske Skog, a company looking to produce second-generation (2G) biodiesel from wood pulp. He says introducing tax on biofuels will make it too expensive for them.

“It looks as though it’s possible to make a profit based on the present tax framework, but if they put tax on top of biofuel it means it isn’t competitive any more. We’ll walk away from it and move production to South America, for example, where wood is cheaper.”

Gradual introduction

Although Ap’s new finance minister, Sigbjørn Johnsen, argues that the effects won’t be immediate, with tax being introduced gradually over a period of two years, Solvik-Olsen would like to see a longer time perspective.

“We should put the tax on hold for now, even though we’ll have to have it one day, otherwise the whole tax system would be ruined. There should be a tiered system, where taxes are introduced over a period of 5-10 years, say.”

He goes on to say that the government should also set up a framework for looking at alternative forms of fuel to biodiesel – such as electric, or hydrogen – and should come back with their suggestion to parliament when they have discussed it.

Frederic Hauge - leader of Bellona
Frederic Hauge - leader of Bellona
Jarle Vines/Wikimedia Commons
But Frederic Hauge believes that introducing any tax at all on biodiesel is a bad idea.

“The government won’t manage to get motorists to make the transition to electric cars, because people will expect that these will also have a tax put on them.”

Outcome

The Standing Committee on Finance and Economic Affairs in parliament will be submitting its proposal on Friday. But although the fuel tax cannot be imposed before the state budget has been passed, Solvik-Olsen thinks the matter is as good as settled.

“I fear it will pass because the two other parties in the red-green coalition are in a minority, with no room for negotiation. They are always loyal to the majority governmental party, even though they disagree with them when they express their views in the media. It’s been this way for the past four years.”

But Hauge has a different opinion, even though he accuses Norway of being a “petroholic” country.

“People are angered by the government’s proposal, and we can’t maintain the present situation. I believe that Bellona and the government will manage to fix this issue. Just give it a couple of days.”




Published on Wednesday, 18th November, 2009 at 06:00 under the news category, by Michael Sandelson   .
Last updated on 26th November 2009 at 12:47.

This post has the following tags: frp, ketil, solvik-olsen, bellona, frederic, hauge, ap, sibjoern, johnsen, norske, skog, tom, bratli, norwegian, government, biodiesel, tax.





  
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