The Spanish Biomass Association welcomes the Government's decision to reduce the VAT applicable to pellets, briquettes and firewood from 21% to 10%, a measure included in the package approved by the Government (through Royal Decree-Law 7/2026) to address the energy crisis resulting from the conflict in the Middle East.
The measure benefits a significant part of the thermal bioenergy market, but it is necessary to move towards a tax treatment more consistent with the reality of biofuels used in Spain for heating and heat production.
As happened in 2022/23, solid biofuels for thermal use such Olive pits and nut shells are not included in the discount.. These are renewable fuels widely used in thermal installations, especially in certain territories and medium and large power applications, whose exclusion maintains a comparative disadvantage compared to other energy solutions that do benefit from the measure.
A particularly significant issue for homeowners' associations, public buildings, heating networks, and centralized installations is the tax treatment of heat supplied by Energy Service Companies. If the aim of the price reduction is to alleviate energy bills, it makes no sense to exclude renewable thermal supply options that compete directly with gas for the same end uses.
Extending the VAT reduction to renewable heat using biomass would allow this tax relief to be passed on to approximately 44,000 homes already connected to heat networks in Spain, which is equivalent to about 110,000 people if the current average household size is taken as a reference.
AVEBIOM has been advocating for years for a stable, reduced VAT rate for solid biofuels used for heating, as well as for renewable biomass heat supplied through networks and Energy Service Companies, not just as a temporary response to crises. Taxation should support the decarbonization of heating, the use of local resources, and the effective replacement of fossil fuels in homes, industries, and public buildings.
Therefore, AVEBIOM considers it necessary and fair that the Government extend the reduction to all solid biofuels for thermal use and expressly include renewable heat with biomass supplied by networks and ESE.
According to Javier Díaz, president of AVEBIOM “"It makes no sense to lower the VAT on gas or some biofuels and leave out other renewable fuels and heat supplied with biomass in networks or by ESCOs, which cover exactly the same thermal needs."”