Japan to subsidize biofuels use

The Japanese government and the ruling parties have decided to provide subsidies to service stations that offer gasoline blended with ethanol and other biofuels starting in spring 2008. The move is aimed at spreading the use of biofuel-blended gasoline, which costs more to produce than ordinary gasoline, by covering the extra expenses that will be incurred by retailers. The plan calls for allocating an estimated ¥1 billion (US$8.40 million) for the program in the first year, including the cost of studying the environmental impact of biofuels. Japanese oil distributors began supplying about 50 gas stations in the Tokyo region with biofuels imported from Europe and elsewhere in April. Because these facilities will not pass along the higher procurement costs to consumers for some time, their expenses, including those for facility renovation, are expected grow by more than ¥2 billion (US$16.81 million). The Petroleum Association of Japan will be in charge of selecting the filling stations that will be covered by the program. (April 11, 2007)