From new year 'blue' diesel will only be available with prior registration

Cheaper diesel fuel is intended for farmers and fishermen.
Cheaper diesel fuel is intended for farmers and fishermen. Source: Olev Kenk/ERR

A law will go into effect in January limiting the purchase of special diesel fuel to people who are registered for it. Over 7,800 operators have been awarded this right.

Special-purpose diesel, known as "blue" diesel, has a lower excise tax and is intended for farmers who use tractors to till fields and fishermen. However, the cheaper fuel is frequently purchased and used for other purposes.

Kiido Levin, the director of the Agricultural Registers and Information Board (ARIB), said that many buyers of blue diesel do not use it for its designated purpose.

"Today, the common practice is that a person buys an item and we afterwards determine whether they used it for its intended purpose. This is inefficient; it is wiser to try to avert problems," Levin said. To this end, the ARIB has set up a new register, which will be operational from the beginning of the new year.

"Based on their personal identification number, fuel sellers will be able to determine whether persons have the right to purchase diesel fuel with special labeling on behalf of someone, either from their own information system or from the corresponding software solution developed by the ARIB."

Based on its records, the ARIB automatically granted 7,800 farmers the permission to purchase specialty diesel. This is a threefold fewer buyers than in the past. On November 15, the ARIB began accepting applications for purchase rights, although just 22 have been received so far.

Roomet Sõrmus, the chair of the board of the Estonian Chamber of Agriculture and Commerce (EPKK), said that the register is necessary to ensure the sustainability of this important incentive for farmers.

"The gains to the public purse from ending this misuse, in our view, should be channeled into extending the fuel excise duty rebate. It is currently at the bare minimum in the European Union," Sõrmus explained.

There may be an issue with the supply of the specialist fuel at smaller gas stations.

"As the creation of this register and the entire system entails some development expenses for fuel retailers, sellers raised concern that these costs may not be reasonable for all service stations. This may result in some smaller gas stations discontinuing sales of blue fuel," Sõrmus said.

The scale of these concerns will become clear early next year, Sõrmus added. By the conclusion of the first quarter, it will also be possible to figure out how much additional excise money the state will receive as a result of the operation of this register.


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Editor: Kristina Kersa

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