Maintenance of VAT at 10% on pellets in January and February 2024

Thanks to AIEL’s efforts, the measure maintaining VAT at 10% on pellets, already present in the previous Budget Law, has been confirmed

Through an amendment by the Rapporteurs to the Budget Law, pending final approval by the Chambers, the reduction of VAT to 10% on pellets for the first two months of 2024 has been confirmed. This is a highly anticipated measure for the entire domestic heating sector using woody biomass, represented by AIEL, Italian Association of Agroforestry Energy, on which there was political convergence from both majority and opposition forces.

Parliament, by deciding to allocate about 21 million euros to confirm the measure despite the scarcity of available resources, has shown a strong political will to maintain the unchanged tax rate, thus recognizing the positive effects that the provision has registered in 2023.

The measure is the result of discussions carried out by AIEL with political representatives of various parliamentary groups and the Government, not only as an expression of the companies operating along the wood-energy supply chain but also of the over two million Italian families who use pellets for heating during the winter period.

Furthermore, the intense technical exchange with the MEF ensured that AIEL could play a crucial role in defining the resources to be allocated to the measure. The Association, in fact, has confirmed itself as a reference interlocutor for the Ministry, and the commitment will be to continue to play this role and further consolidate it.

“We are satisfied with the confirmation of VAT on pellets at 10% at least for the first two months of 2024, especially considering the reduced financial margins with which this Budget Law had to contend,” explains Annalisa Paniz, General Director of AIEL. “Maintaining the rate will avoid further burdening Italian families’ energy expenditure, still grappling with the general increase in prices. Moreover, according to our discussions with the Guardia di Finanza, with whom we maintain intense collaboration in the fight against evasion, tax avoidance, and carousel fraud, the measure will be fundamental in promoting the emergence of the underground market.”.

During AIEL’s discussions in recent weeks with Parliamentary Groups, the need to intervene again on the issue was highlighted, confirming the reduction of the tax rate on pellet transactions from 22% to 10% established in the previous Budget Law, which has contributed to determining a robust decrease in pellet prices for consumers over the last twelve months.

“The sector’s commitment has been recognized by political interlocutors, leading to choral support for the Association’s request,” comments Domenico Brugnoni, President of AIEL. “This is an important result that will be fundamental to make structural in the future, guaranteeing greater market transparency and certainty to sector operators, as well as contributing to the transition process from fossil fuels sanctioned by COP28, avoiding the import of over 10 billion cubic meters of natural gas per year and further accelerating the decarbonization process of the national thermal sector.”

SOURCE: AIEL – Associazione Italiana Energie Agroforestali