METI to introduce tax incentives for biofuels

Japans Ministry of Economy, Trade and Industry (METI) plans to introduce a new preferential tax system in fiscal 2008. The new tax plan is aimed at reducing carbon dioxide emissions from vehicles, one of the causes of global warming, and will be incorporated in a joint request to be submitted to the government’s Tax Commission by the ministry together with the Agriculture, Forestry and Fisheries, and Environment ministries. Under the envisaged plan, biofuel that has been mixed with gasoline will be exempt from the gasoline tax, which is currently at ¥53.8 (US$.46) per liter, in proportion to the amount of biofuel in the blend. If blended with diesel oil, biofuel will be free from the diesel oil delivery tax, which is currently at ¥32.1 (US$.27) per liter. (August 12, 2007)