Biofuel quota
Updated: 08.01.2019
Author: John Szabo
There is a target for biofuels, determined as the share of pure biofuels and biofuels added to conventional fuels in the total quantity of petrol placed in the market (§ 5 (1) Act No. CXVII of 2010). The quota is set by a Government Decree. However, the target until 2020 is to reach a quota of 10% of the final energy consumption in the transport sector (§2 Act No. CXVII). Only certified biofuels satisfying specific sustainability criteria can be accounted into fulfilling the prescribed quota. For plants put into operation before on or before 5 October 2015, the use of biofuels has to result in 35% (until 2018: 50%) lower greenhouse gas (GHG) emission levels than if conventional fuels were used. For plants put into operation after the 5 October 2015, the use of biofuels has to result in 60% lower greenhouse gas (GHG) emission levels than if conventional fuels were used. In general, the sustainability ratio is assessed based on the GHG-savings compared to the use of fossil fuels (§§ 3 (1-2) Decree No. 279/2017). Since May 2017, the biofuel retailer/processor/distributor has to ensure the traceability of (liquid) biofuels and their intermediate products in order to sell them (§8 Act No. CXVII). The biofuel retailer/processor/distributor obtains a sustainability certificate if he becomes part of the register for sustainable biofuels in line with the Decree on sustainability criteria for biofuels (§5 Decree No. 279/2017).
Eligible technologies
Biofuels and hydrogen are eligible technologies. However, only certified biofuels satisfying specific sustainability criteria can be accounted into fulfilling the prescribed quota. The sustainability criteria for biofuels as well as the procedure for certification are regulated by law (§4 Decree No. 279/2017 and § 3 (1) Act No. CXVII of 2010). Likewise, biofuel profiting from tax reduction is not eligible (§ 5 (2) b) Act No. CXVII of 2010).
| Biofuels | In § 1 par 8. Decree No. 279/2017 eligible biofuels are defined as - Biobutanol produced from biomass
- Biodiesel produced from vegetable or animal oil
- BioDME produced from biomass
- Bioethanol produced from biomass from within the European Union
- Bio-ETBE on the base of bioethanol
- Biogas produced from biomass or organic waste
- Biohydrogen produced from biomass or produced by means of other renewable energy sources
- Biomethanol produced from biomass
- Bio-MTBE on the base of biomethanol
- Bio- TAEE on the base of bioethanol
- Synthetic biofuels produced from biomass
- Hydrotreated vegetable oil
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| Hydrogen | Hydrogen produced with energy from biomass or other renewable sources is eligible (§1 par 8. k) Decree No. 279/2017). |
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Amount
| Amount of quota and period of application | The quota is determined as the share of pure biofuels and biofuels added to conventional fuels in the total quantity of petrol placed in the market (§ 5 (1) Act No. CXVII of 2010). The quota fulfilment has to be accounted for by the fuel retailer on a yearly basis. (§ 6 (1) De-cree No. 279/2017).
Bio-quota obligations §6 (3) Decree No. 279/2017): - 01.09.2017 until 31.12.2018: 4.9%
- 01.01.2018 until 31.12.2020: 6.4%
for both petrol and diesel (§6 (4) Decree No. 279/2017). |
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| Fees and penalty charges | Fuel retailers will be penalised in case they do not fulfil the quota obligation. The difference between the required quota and the actual-ly marketed biofuels is expressed in MJ. The penalty charge amounts to HUF 35 per MJ (app. € 0.11per MJ). The penalisation can be re-duced in case that the supplier of biofuels was responsible for missing or invalid sustainability certifications on the obtained biofuel when that was the reason for not meeting the required quota. The penalisa-tion will be reduced according to this amount of biofuel (§§ 7 (2) (3) Act No. CXVII of 2010). Further, penalty charge of HUF 100,000 – 1,000,000 (app. € 312 – 3,120) falls due in case that the fuel retailer does not hand in the monthly documentation of quota fulfilment to the competent authori-ty (§§ 3 (3), 7 (4), 9 (4) (5) Act No. CXVII of 2010). |
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Addressees
Obligated party: Fuel retailers are obliged to fulfil the required quotas on a yearly basis (§ 5 (1) Act No. CXVII of 2010). Fuel retail-ers are persons marketing fuels inland as well as abroad including import activities from EU member states (§ 1 par 18. Act No. CXVII of 2010).
Procedure
Process flow | - Biofuels taken into account for quota fulfilment need to be certified according to specific sustainability criteria. The sus-tainability criteria for biofuels as well as the procedure for certification are regulated by law (Decree No. 279/2017 and § 3 (1) Act No. CXVII of 2010).
- The fuel retailer has to account for the quota fulfilment on a yearly basis, which has to be handed in at the customs au-thority electronically (§ 7 (4) Decree No. 279/2017 and § 6 (1) Act No. CXVII of 2010).
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Competent authority | The agricultural administrative agency (mezőgazdasági igazgatási szerv) controls all activities regarding biomass production, processing and retailing. Further, the National Tax and Customs Administration (Nemzeti Adó és Vámhatóság) is acting as a supervising body for fuel retailers and their obligation with regard to the quota (§ 16 Decree No. 279/2017 and §3 (2) (3) Act No. CXVII of 2010). |
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Distribution of costs
| Consumers | The costs are borne by the customers. |
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Hungary
