The fruit of the oil palm / Photo: Tristantan – Pixabay.
The Council of State has ruled: all products derived from palm oil are indeed excluded for the production of biofuels. Total wanted to exploit a derivative fatty acid escaping the law to operate its biorefinery in La Mède, in Provence. He loses a considerable tax advantage.
If the law no longer considers palm oil as a biofuel since January 1, 2020, Total had found a way to get through its gray areas. He planned to use a by-product called “Palm Fatty Acid Distillate” (PFAD), a fatty acid distilled from palm oil. A material qualified as “residue” by customs, thus escaping legislation. This sleight of hand allowed Total to benefit from a nice tax gift estimated between 70 and 80 million euros by environmental associations.
This is an essential advantage for the profitability of its biorefinery in La Mède, in the Bouches-du-Rhône. Recently converted, the site is sized to transform around 500,000 tonnes of palm oil and its derivatives into biofuels each year. The operation of PFAD even allowed Total to place its production in the category of “advanced biofuels”, giving rise to even greater tax rebates.
The manna has just been undermined by the Council of State. On February 25, the institution followed the opinion of the Constitutional Council by canceling the note from the General Directorate of Customs qualifying the PFAD as “residue”. He had been seized by the associations “Canopée” and “Les Amis de la Terre”, which denounced an “excess of power”. The State will also have to pay them a total of € 3,000. If the oil group will not be able to sell its palm oil biodiesel in France, it remains however authorized to sell it abroad.