EU Legislation on Ethyl Alcohol (of Agricultural Origin)
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1 EU Legislation on Ethyl Alcohol (of Agricultural Origin) Werner Albrecht TAIEX Workshop 11./12th of June 2012, Belgrade
2 Agenda 1. Introduction 2. Common Agricultural Policy (CAP) 3. CMO Agricultural Ethyl Alcohol 4. Spirit Drinks Regulation 5. Special Quality Aspects of Alcohol 6. Legislation on excise duty 7. Denaturing of Ethyl Alcohol 8. Member States Policies 9. Summary
3 1. Introduction Personal introduction: - My name is Werner Albrecht. - I ve worked as an expert for ethyl alcohol and spirit drinks in the Federal Ministry of Food, Agriculture and Consumer Protection (BMELV) since Market organisation questions for ethyl alcohol; excise duty questions are in the Federal Ministry of Finance.
4 EU legislation: 1.1 Introduction - Treaty on the functioning of the European Union (TFEU) primary legislation - Three institutions: European Commission, Council, European Parliament - Basic laws/acts: Directives or Regulations of (the European Parliament and) the Council - Delegated or Implementation Acts of Commission (Regulations, Directives)
5 1.2 Introduction EU legislation: - Directives of Council, Directives of EP and Council and Directives of Commission have to be transformed into national law. - Citation: Directive Year of adoption/number in the year/abbreviation of Treaty (EEC, EC, EU), e.g. Directive 2000/13/EC (food labelling) - Regulations of Council, Regulations of EP and Council and Regulations of Commission are binding in its entirety and directly applicable in all EU Member States (no need for a transformation) - Citation: Regulation (Abbreviation of Treaty) No Number/Year of adoption Abbreviation of Treaty, e.g. Regulation (EC) No 1234/2007 (single CMO) or Regulation (EC) No 670/2003 (ethyl alcohol market)
6 2. Common agricultural policy (CAP) EEC Treaty (Treaty of Rome) stated to set up a CAP for agricultural products according to Annex II starting at 1st of January Ethyl alcohol of agricultural origin is an agricultural product according to Annex I of the Treaty on the Functioning of the European Union TFEU (former EEC- and EC-Treaty) since 1st of January 1960 (Reg. 7 a of 18 decembre 1959). European Commission failed to set up a classical common market organisation for ethyl alcohol in the years 1972 to 1983 (4 official proposals).
7 2.1 CAP in TFEU (Treaty) Common agricultural policy (Articles 38 to 44 TFEU) Agricultural products listed in Annex I TFEU. Agricultural products = products of the soil, of stockfarming and products of first-stage processing directly related to these products. Ethyl alcohol or neutral spirits, whether or not denatured, of any strength, obtained from agricultural products listed in Annex I, excluding spirits, liqueurs and other spirituous beverages. Rules of competition of treaty are applicable to agricultural products only when there are provisions in an EP and Council Regulation.
8 3. CMO on Ethyl Alcohol Single CMO Regulation (EC) No 1234/2007 contains provisions for the market in ethyl alcohol of agricultural origin. Provisions for the market in ethyl alcohol of agricultural origin: - since 1st of January 2004 in Council Regulation (EC) No 670/ since 1st of January 2008 in Council Regulation (EC) No 1234/2007.
9 3.1 Single CMO Regulation Regulation (EC) No 670/2003 was integrated into single CMO Regulation without any material modifications. Annex XXII of Reg. (EC) No 1234/2007 contains correlation table (i.e. which articles in Reg 670/2003 are now which articles in Reg. 1234/2007).
10 3.2 single CMO Regulation A light regulation for ethyl alcohol of agricultural origin: specific measures, no classic CMO. To understand the goals and the background it s useful to read the recitals of Reg. 670/2003 and of Reg. 1234/2007 Commission implementation Reg. 2336/2003 The main rules/provisions and goals: - Scope/definition - Ensure the proper functioning of a single market - Trade Rules (vs. Third Countries) - Monitoring of the ethyl alcohol market - Management Committee to discuss actual problems
11 3.3 single CMO Regulation The main rules/provisions and goals (Reg. (EC) 1234/2007): Scope/definition (Art. 1 (3) lit. a; Annex II, Part I.): 1. Ethyl alcohol of agricultural origin: - ex CN Code : Undenatured ethyl alcohol of an alcoholic strength by volume of 80 % vol. or higher obtained from the agricultural products listed in Annex I to the Treaty - ex CN Code : Ethyl alcohol and other spirits, denatured, of any strength, obtained from the agricultural products listed in Annex I to the Treaty - ex CN Code und : Undenatured ethyl alcohol of an alcoholic strength by volume of less than 80 % vol. obtained from the agricultural products listed in Annex I to the Treaty
12 3.4 single CMO Regulation Scope/definition (Art. 1 (3) lit. a; Annex II, Part I.): 2. Vodka in bulk: Section I of Chapter II of Part III on import licences and Section I of Chapter III of that Part shall apply also to products based on ethyl alcohol of agricultural origin falling within CN code 2208 put up in containers of more than two litres and presenting all the characteristics of ethyl alcohol as described in paragraph 1. - Raw alcohol transformed into neutral ethyl alcohol. Not covered (CN/HS explanations): - distillates of agricultural origin, spirit drinks - ethyl alcohol of non-agricultural origin
13 3.5 Ethyl Alcohol Ethyl alcohol of agricultural origin: Distilled alcohol (after fermentation) obtained from agricultural products listed in Annex I of TFEU such as sugar beet, sugar cane, molasses, cereals, potatoes, starch, fruits, wine, whey etc Ethyl alcohol of non-agricultural origin: - Distilled alcohol from beer, old bread, plants containing cellulose, or - Synthesis ethyl alcohol (produced by synthetisation of ethylen or other substances)
14 3.6 single CMO Regulation The main rules/provisions and goals (Reg. (EC) 1234/2007): Creating a functioning internal market (Art. 180): - Rules on state aids laid down in the Treaty apply for ethyl alcohol of agricultural origin, this means state aides are prohibited. - An exception is granted for the German Alcohol Monopoly ( Branntweinmonopol ) until 31st of Decembre 2017 (Art. 182 (4)). - No specific EU aids for the production of ethyl alcohol - No specific provisions to reserve some sectors for ethyl alcohol of agricultural origin (Exception: alcoholic beverages according to spirit drinks Reg. (EC) No 110/2008). Monitoring of EU alcohol market (Art. 189): Regular communications of the Member States to Commission concerning production, volume of disposal etc.
15 3.7 single CMO Regulation The main rules/provisions and goals (Reg. (EC) 1234/2007): Monitoring of EU alcohol market (Art. 189): Commission draws up an annual Union market balance Trade Rules with Third Countries) (Art. 128 et al. in this Chapter): Import customs duties, import licences etc. Single CMO Management Committee: Forum to discuss actual problems
16 3.8 Single CMO Regulation Art. 120 confers the power to Commission to lay down the method of production and the characteristics of agricultural ethyl alcohol obtained from a specific agricultural product listed in Annex I to the Treaty. For ethyl alcohol of agricultural origin used in the different sectors of destination EU hasn t adopted any marketing standard (neither a general marketing standard nor specific marketing standards). Actually we only have a marketing stand for agricultural ethyl alcohol used in the spirit drinks sector according to Spirit Drinks Reg. (EC) No 110/2008 and in the aromatized wine sector according to Reg. (EEC) Nr. 1601/91.
17 4. Spirit Drinks Regulation Specific provisions on the definition, description, presentation and labelling of spirit drinks. Since when? Spirit Drinks Regulation (EEC) No 1576/89 since 14 Decembre 1989 Spirit Drinks Regulation (EC) No 110/2008 since 20 May Quality standard for ethyl alcohol of agricultural origin used for the production of spirit drinks (Art. 3 (2) and Annex I No 1.
18 4.1 Ethyl alcohol in spirit drinks Regulation Annex I No 1 of Reg. (EC) No 110/2008 lays down properties and characteristics for ethyl alcohol used in the preparation of spirit drinks (= neutral alcohol). For example: - minimum alcoholic strength by volume: 96,0 % - maximum level of residues for total acidity, esters, aldehydes, methanol etc Maximum content of methanol: 30 g per hl of 100% vol alcohol (in former times: 50 g/hl pure alcohol)
19 4.2 Ethyl alcohol for Vodka Maximum content of methanol in the ethyl alcohol of agricultural origin used for the preparation of vodka: 10 g per hl of 100 % alcohol according to Annex II No 15 of Reg. (EC) No 110/2008
20 5. Special quality aspects of ethyl alcohol Neither a general marketing standard nor specific marketing standards for ethyl alcohol in single CMO Regulation for ethyl alcohol. Besides alcoholic beverages (spirit drinks regulation) no specific EU provision to reserve other sectors of destination to ethyl alcohol of agricultural origin. In Germany we had reserved sectors (foodstuffs, cosmetics, pharmaceuticals) within our Monopoly framework (we must give up the Monopoly and this provision).
21 5.1 Special quality aspects of ethyl alcohol Marketing or quality standards for ethyl alcohol exist in the legislation (state or private rules) of the sector of destination (e.g. spirit drinks, vinegar, pharmaceuticals, biofuel (gazoline) etc.) Regulation (EC) No 510/2006 for the protection of protected geographical indications (PGI) being one tool for the quality policy in the agricultural sector - excludes the possibility to protect a PGI for ethyl alcohol for all sectors of destination.
22 5.2 Special quality aspects of ethyl alcohol Quality checks or special certificates for ethyl alcohol on a private basis (e.g. kosher alcohol for products consumed by Jewish people). Ethyl alcohol of agricultural origin used to produce foodstuffs (spirit drinks, flavourings, vinegar) are subject to the general provisions of the EU food base Regulation (EC) Nr. 178/2002.
23 5. Special quality aspects of ethyl alcohol Ethyl alcohol of agricultural origin used to produce cosmetics or other chemical products (solvents) is subject to the REACH legislation. Ethanol for biofuel: European Standard pren 15376
24 6. Legislation on excise duty Three EU directives on excise duties on ethyl alcohol and alcoholic beverages (beer, wine, sparkling wine, spirit drinks): - System Directive of Council No 2008/118/EC (general arrangements on excise duty for all goods) - Structure Directive (of Council) No 92/83/EEC on alcohol and alcoholic beverages - Rates Directive (of Council) No 92/84/EEC on alcohol and alcoholic beverages
25 6.1 Legislation on excise duty Definition for ethyl alcohol according to Art. 20 of Directive 92/83/EEC: For the purposes of this Directive the term 'ethyl alcohol' covers: - all products with an actual alcoholic strength by volume exceeding 1,2 % volume which fall within CN codes 2207 and 2208, even when those products form part of a product which falls within another chapter of the CN, - products of CN codes 2204, 2205 and 2206 which have an actual alcoholic strength by volume exceeding 22 % vol., - potable spirits containing products, whether in solution or not.
26 7. Denaturing of ethyl alcohol Denaturing of alcohol is a means to exempt alcohol from excise duty if the alcohol is not used for human consumption (according to Art. 27 (1) lit. a of Directive 92/83/EEC.) Commission Regulation (EC) No 3199/93 on the mutual recognition of procedures for the complete denaturing of alcohol for the purposes of exemption from excise duty.
27 8. Member States policies Member States may lay down rules and quality or marketing standards for the alcohol which is produced on the own territory. In Germany we ve had the Branntweinmonopol (German Alcohol Monopoly). The federal Alcohol administration laid down marketing standards fo ethyl alcohol.
28 9. Summary EU legislation for the agricultural ethyl alcohol market contains only a few provisions and especially no quality or marketing standards. There is only a marketing standard for ethyl alcohol of agricultural origin used to produce spirit drinks such as vodka, liqueurs etc and for aromatized wine. Member States are allowed to lay down marketing standards on the national level but only for ethyl alcohol produced on the own territory. (Principle Cassis de Dijon mutual recognition; no discrimination of goods from other Member States).
29 Thank you very much for your attention! For further information please send a mail to Werner.Albrecht@bmelv.bund.de or call by phone:
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