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Bulgarian Oil and Gas Association Urges Tax Incentives for Propane-Butane Cars to Promote Green Transport

To have concessions for propane-butane cars, the Bulgarian Oil and Gas Association suggests

Incentives are needed

The chairman of the Bulgarian Oil and Gas Association (BPGA) Svetoslav Benchev suggested that tax incentives be introduced for propane-butane cars. This means that cars with gas systems will be tax-free or the tax on them will be lower because they use ecological fuel. Electric cars are currently exempt from tax, but there are no exemptions for gas cars.

Propane-butane cars must park for free in the green zone of cities or their parking should be at a lower price, Svetoslav Benchev also said. According to him, in order for people to switch to a more environmentally friendly fuel, there should be incentives, and not raising taxes for cars using the traditional gasoline and diesel fuels. Only then will the price that people will pay for switching to greener transport be socially bearable.

BPGA has prepared a vision for “Energy Transition”, which will be presented to all responsible institutions in the country. In the Energy Strategy prepared by the government, transport is not included at all, and it is one of the largest consumers of energy. The association is adamant that there must be changes in transport, but there is no way to replace all diesel cars with electric ones. Most people don’t have enough money to buy a new electric car, and there aren’t enough charging stations yet. In addition, if only half of the cars in the country go electric, two more nuclear reactors, or 2 gigawatts of new capacity, will be needed. Therefore, BPGA wants to implement a plan to gradually switch to greener fuels and encourage their use before the time comes years from now when cars will not pollute the environment. If a socially acceptable price is not provided, we will not see transport with reduced carbon emissions, are categorical from BPGA.

Equipping the car with a gas system is affordable for consumers, is cost-effective, and is an alternative to using gasoline or diesel, said Maya Blagoeva from the association. And the harmful emissions from using propane-butane from cars are significantly smaller than when using gasoline or diesel. There are 27 million propane-butane vehicles in the world, which consume 30 million tons of the fuel per year. The consumption of this fuel in production is even greater – its annual consumption in the world is 200 million tons, and its use has been increasing over the years.

According to Svetoslav Benchev, in the transition period when switching to carbon-neutral fuels, it is necessary to have incentives for the use of propane-butane, methane and HVO-fuels. HVO means hydrotreated vegetable fuel. It is an alternative to traditional diesel – it is produced from raw materials of bio-origin and from residual products, has the same chemical structure as conventional fuel and can be used alone or as a mixture for a diesel engine, and the harmful emissions when using it are less than from diesel. The use of such transitional fuels is economically much more justified than people replacing their old cars with electric ones.

Every geopolitical event affects prices

For now, prices are stable

So far, the prices of gasoline and diesel are stable, but every geopolitical event has an impact on fuel prices, said the chairman of the Bulgarian Oil and Gas Association (BPGA), Svetoslav Benchev. The average price of gasoline at gas stations in the country is BGN 2.66 per liter, and diesel is BGN 2.77 per liter, according to data on the specialized website fuelo.net.

The European Commission is taking measures to limit the use of gasoline and diesel. It has already been decided that from 2035 new cars sold in the EU must be either electric or synthetic fuel. But for now, synthetic fuels are very expensive and not mass-produced, explained Svetoslav Benchev. There are only pilot plants for their production.

Synthetic fuels can be made using a variety of methods, but in most cases they are produced by splitting water into hydrogen and oxygen through electrolysis. This hydrogen is then treated with carbon dioxide extracted from the atmosphere to produce methanol, which can then be converted into synthetic crude gasoline that can be used in all internal combustion engines.

We pour fuel from algae and animal dung into the car

We will pour biofuels from algae and animal manure into our cars.

They make fuel from household waste

We will pour completely new biofuels into the cars, and they will be an addition to the gasoline and diesel that we fill up at gas stations. These fuels can be produced from algae or animal manure. The use of fuels from food crops, such as rapeseed for example, will be prohibited. The reason for this is that due to the use of rapeseed for the production of fuels, the areas planted with other crops such as wheat and sunflower are decreasing. Therefore, the European Commission has changed its approach to the use of biofuels. As a result, some rapeseed biofuel companies will not return their investment. Now there is already talk of new synthetic fuels, but they are very expensive and there is no desire to invest in their mass production without guarantees that the same thing as rapeseed biofuels will not happen.

The Renewable Energy Act incorporates EU directive requirements and introduces several obligations for the use of biofuels in transport. The consumption of new generation biofuels and biogas for transport from type “A” raw materials should be at least 1% in 2025 and 3.5% in 2030. The share of biofuels and biogas from type “B” raw materials is limits to 1.7%. As of September 1 of this year, the fuel for diesel engines must contain at least 6% biodiesel, and at least 2% of the biodiesel must be a new generation fuel from type “A” raw materials. From March 1, 2025, gasoline engine fuels must contain at least 9% bioethanol, with a minimum of 1% bioethanol must be a new generation biofuel from type “A” feedstocks.

New generation feedstocks of type “A” are mainly biomass and waste, such as – algae grown on land in ponds or in photobioreactors, fraction of biomass in mixed municipal waste (but not separate household waste that can be recycled ), animal manure and sludge from sewage treatment, waste water from the production of palm oil and empty palm fruit bunches, tall oil resin, crude glycerin, bagasse, grape pomace and wine lees. It turns out that waste products from the production of wine and brandy will be used to produce fuels.

The price of new generation biofuels is several times higher than that of diesel. For now, the requirements are for the minimum content of these fuels in the diesel we fill up at gas stations, and they do not have a significant impact on the final price. But the tendency is for the share of these fuels to increase.

The rulers are preparing to raise taxes

To have incentives for the purchase of electric cars, suggests the Bulgarian Oil and Gas Association.

They hit us with a “green tax”

The tax on old cars will be increased by up to 78%, according to a draft of a completely new Law for the promotion of electric mobility, which “Trud news” has already written about, and which has been prepared by the Ministry of Innovation and Growth. The biggest increase in this tax is foreseen for the oldest diesel cars. The goal is to get people to stop driving such cars. At the same time, as now, electric cars will be tax-free.

In addition, they plan to hit the purchase of vehicles with an internal combustion engine with a new “green tax”. The idea is that this fee will be paid when the vehicle is initially registered. The amount of the fee will be determined on the basis of the amount of carbon dioxide emissions (CO2) that is emitted for one kilometer of mileage; fixed minimum average mileage during the vehicle’s life cycle; average CO2 price under the European emissions trading system. It turns out that when buying a used car, a fee will have to be paid based on the expectations of how many kilometers the new owner will drive it.

A transition to the use of more environmentally friendly cars will not happen by raising taxes, commented Svetoslav Benchev. According to him, instead of increasing taxes, incentives should be introduced to buy electric cars. For example, in Romania they give 10 thousand euros when buying an electric car.

EU rules raise fuel prices

Gasoline and diesel will become more expensive due to the new rules introduced by the European Commission.

Propane-butane with 30 cent. above

Gasoline and diesel will become more expensive due to the new EU requirements in the foreseeable future. Fuel suppliers must implement energy efficiency measures, but this is not their inherent activity. If each company independently implements such measures, fuel prices will increase by 10-15 cents per liter. Therefore, the Bulgarian Oil and Gas Association insists on the creation of a Fund for energy efficiency in transport. Thus, the increase in the price of gasoline and diesel for consumers will be only 2-3 cents to 6 cents, which the fuel suppliers will contribute to the fund, which will invest in energy efficiency measures.

The European Commission has also prepared a new directive, according to which excise taxes for fuels must be determined on the basis of their energy content – per gigajoule. In the eventual adoption of this directive, the final price of gasoline and diesel will increase by 10-16 cents per liter, and of propane-butane by 30 cents. The directive has not yet been adopted, because within the EU tax changes may be made only with full unanimity of the member countries.

Excise rates should not be increased, said Svetoslav Benchev, chairman of the Bulgarian Oil and Gas Association (BPGA). If fuel prices are simply increased, people’s mobility will be reduced, their ability to go to work, to move where they want, will be limited, he explained.

From 2027, road transport will be included in the emissions trading scheme. This means that fuel suppliers will have to buy allowances for harmful emissions, which will feed into the prices of petrol and diesel for cars. The increase in the price of fuel just because of the harmful emission quotas will be 50-80 cents per liter, according to estimates.

2024-03-02 06:55:53

#Taxfree #gas #cars #Labor

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