Tax Changes, Red Tape, Put Soufflet's Ethanol Plans On Back Burner

Tax changes, announced last Friday in France's draft 2009 budget, have been condemned by biofuel producers as going against commitments to back biofuel investments as part of national environmental targets.

Government plans to phase out tax breaks for biofuels by 2012 raised fresh doubt over the viability of ethanol production, despite falling feedstock prices.

Construction of an ethanol production plant located in the Aube department of northeast France by the country's largest grain trading group Soufflet also continues to be held up by legal challenges from local opponents after a year-long delay, the company said on Thursday.

After obtaining the necessary planning permits earlier this year, Soufflet has decided to delay construction pending further court appeals by a local association.

Although Soufflet insist that they have not dropped the project they concede that the plant will not meet its target launch date of early 2009.