Mr. Gareth R. ThomasTo ask the Chancellor of the Exchequer if he will make a statement on Government policy on the proposed EU Energy Products Directive as it affects the biofuel industry. [71397]
84W
§ Ms HewittThe Government's position on the Energy Products Directive is that we favour some aspects of the proposal, such as higher minimum rates of tax on road fuels. However, we could not accept, for social policy reasons, any obligation to impose new taxes on domestic fuel and power. Our attitude to new taxes on business use of energy will depend on the decisions we take in the light of Lord Marshall's report on 'Economic Instruments and the Business Use of Energy', which was published on 3 November 1998.
Under the terms of the draft Directive, Member States may introduce optional exemptions from tax or reduced rates for certain types of energy product and to products put to particular uses. This applies to energy products used in pilot projects for the development of more environmentally friendly products, or in relation to fuels from renewable sources of energy such as solar, wind and geothermal power and biofuels.