The finance, agriculture and economy ministries have reached a compromise on the measures for supporting the biofuels production in Poland. While the excise tax break would be kept low, at PLN/l 1.048 vs. PLN/l 2.2 before, biofuel producers would be compensated by introduction of corporate income tax break.
Our view: We are cautiously optimistic with regard to regulatory outlook for biofuel industry. We wait for the announcement of the final regulatory framework, which needs to be introduced before May, that is when farmers contract for rapeseed deliveries. We view the news as positive. Nevertheless, until we learn the detailed government proposal, we reiterate our Hold rating for the stock.