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Statement on the Draft Government Proposal to Amend the Liquid Fuel Excise Tax Act Attachment

Chemical Industry Finland (CIF) appreciates the opportunity to express its views on the draft government proposal to amend the Liquid Fuel Excise Tax Act attachment, which is intended to outline tax reductions. The proposal also mentions the staggered penalty level for non-compliance with the distribution obligation in relation to the future increase in the distribution obligation. Additionally, between 2025 and 2027, the impact of raising the distribution obligation on fuel prices will be offset through the introduction of a new distribution obligation flexibility mechanism, the inclusion of electric transport in the distribution obligation, and, if possible, a reduction in fuel taxation, with an emphasis on reducing taxes on renewable fuels.

With the implementation of the RED III Directive, we anticipate significant changes to the Distribution Obligation Act in the government proposal expected next autumn. As we understand it, the responsibility for the reform of the Distribution Obligation Act falls under the Ministry of Economic Affairs and Employment.

Chemical Industry Finland believes that it is crucial for the planned changes, especially the inclusion of electric transport, penalties, and flexibility mechanisms, to undergo an open, thorough, and business-involved assessment led by the Ministry of Economic Affairs and Employment (TEM). This assessment should be conducted to evaluate the impact of these changes to inform political decision-making. By doing so, we ensure legislation that serves the common interest of society.

The distribution obligation has been the primary tool chosen in Finland to reduce carbon dioxide emissions from transport. Only with a long-term development path for the distribution obligation can we create a predictable and stable operating environment, enabling supportive investments and fruitful research, development, and innovation activities.