The rate of mineral oil tax on substitute fuel, such as bioethanol, for auto-use is 36.8 cents per litre, the same rate as for auto-diesel. The rate for unleaded petrol is 44.3 cents per litre. However, an exception applies where bioethanol is produced in the projects approved under an excise exemption scheme for biofuels, which was introduced in the Finance Act 2004, as a limited, pilot scheme. The purpose of the provision was to allow qualified and conditional relief from excise for biofuel used in approved pilot projects for either the production of biofuel or the testing of the technical viability of biofuel for use as a motor fuel. After obtaining the necessary State aid approval from the EU Commission, the scheme was subsequently advertised by the Department of Communications, Marine and Natural Resources. Excise relief was granted to successful applicants to the scheme from August 2005 for a total of 16 million litres of fuel at a cost of €3 million per annum. The issue of putting a wider scheme of excise relief in place is under active consideration with the Department of Communications, Marine and Natural Resources, which has primary responsibility for the promotion of biofuels in Ireland.
With respect to tax differentials between bioethanol and petrol in other EU countries, the situation varies greatly and different national tax regimes make country comparisons difficult. It appears that apart from Ireland, 12 member states have implemented, or are in the process of implementing, partial or full tax reliefs for biofuel, which would include bioethanol.