Biofuel quota (Act on Sustainable Biofuels)

Updated: 04.01.2019

Author: Karl Wikberg

The Act on Sustainable Biofuels obliges importers and producers of petrol and diesel to meet a defined quota of biofuels (§ 3 par. 1 Act 674/2011). Obliged fuel suppliers may pass on this obligation to other companies (§ 3 par. 5 Act 674/2011). 

Eligible technologies

Only biofuels are subject to the obligation.

Biofuels

Biofuels are understood as liquid or gaseous fuel for transport produced from biomass (§ 2 no. 1 Act 674/2011).

Amount

Amount of quota and period of application

The providers of petrol or diesel fuels have to ensure that biofuels make up at least 5.75% and advanced biofuels at least 0.9% measured by energy content of the company’s total annual fuel sales. The obligation must be fulfilled by the end of each calendar year (§ 3 par. 1 Act 674/2011).  

Adjustment of quotas

The Climate and Energy Minister may lower the amount of quota obligation in the event of a crisis or lack of biofuels (§ 3 par. 6 Act 674/2011)

Fees and penalty charges

If a provider fails to fulfil the quota, he will be punished by a fine (§ 8 Act 674/2011). 

Addressees

The quota obligation applies to companies, which declare and pay energy tax according to Act on the Energy Tax on Mineral Oil Products and the like  for liquid fuel sold for transportation, or the natural gas supplier that supplies gaseous fuel to a gas stations, or companies which neither declare nor pay energy tax for fuel, but sell fuel to a company that declares and pays energy tax and consumes fuel (§ 2 No. 10 and § 3 Act 674/2011).

Procedure

Process flow

  • The obliged company sends an annual report to the Climate and Energy Minister as evidence for the fulfillment of the obligation (§ 5 Act 674/2011).
  • Penalty charge. If a company fails to fulfil the quota, the responsible authority charges a penalty (§ 8 Act 674/2011).

Competent authority

Danish Energy Agency

Distribution of costs

Consumers

The costs are borne by the consumers.

Distribution mechanism

The obliged companies pass on the costs arising from the quota obligation to the consumers by adding a surcharge to their fuel.

Denmark

Further information

Basic information on legal sources