Europe’s Complete Denaturing Obsession

By Robert Vierhout | June 12, 2012

In the European Union, a considerable portion of ethanol is used as a beverage or as a feedstock for industrial/chemical use. The essential characteristic for beverage use is purity. It is meant for human intake, though moderately. Hence, pure alcohol is very highly taxed: the higher the tax, or excise duty, the less people will drink is the theory.

Europe wouldn’t be Europe if this excise duty is not different everywhere. In Bulgaria the duty on 100 liters of pure ethanol is €598 ($126) whereas in Sweden it is almost 10 times as much, €5,474. Sweden also places the highest possible value-added tax on alcohol of 25 percent. The rest of the EU is somewhere between those extremes.

These high taxes make fraud attractive. There are basically two ways to fight this fraud. First, there are high financial bonds on the transport of alcohol that are redeemable once the ethanol reaches its final destination. The other method is by denaturing the alcohol to make it unfit for human consumption (oral intake, that is). Sometimes the denaturing is also done for a specific purpose or end-use as in the case of pharmaceuticals or perfumes.

The total number of denaturants used in all member states is high. The EU database on denaturants tells us that there are 145 denaturants allowed and a total of 159 compositions of denaturing alcohol possible.

The European Commission decided two years ago that there are too many denaturants, and too many do not have the chemical properties to denature the alcohol completely, making it irreversible chemically, in theory. In reality, irreversibility is a price issue. Complete denaturing has the advantage, according to the commission, that the risk of fraud—changing denatured alcohol back to potable alcohol—is reduced. As the number of complete denaturing agents is limited—only 34—administrative tax procedures can be reduced at the same time. The Eurodenaturant project was born.

The objective of the project is to present a single complete denaturing formulation, plus some formulations for specific end products such as solvents, ink, perfumes or fuel. After laboratory testing, a number of ideal formulas and concentrations of the denaturants were proposed. The ideal, completely denatured alcohol is achieved by adding 3 liters of isopropyl alcohol plus 3 liters methyl ethyl ketone and 1 gram of denatonium benzoate to every 100 liters of alcohol.

What is proposed came as a shock to the industry. Even though we had made clear very early that the denaturing is, and should be, driven by customer requirements, and that this works satisfactorily, the commission proposed something that goes against what industry recommended. It will make the alcohol unnecessarily more expensive, and impossible to use for certain applications. Also, in the case of ethanol for fuel use, a formula is proposed that totally neglects what has been agreed upon for many years in the EU among the oil, car and ethanol industries based on what works best for those sectors.

So, why is such a harmonization project started in the first place? Overzealous officials, most likely. Industry didn’t ask for a change of the present practices. Within the EU, we are pumping around billions of liters of alcohol every year. In the 14 years I have been working in this sector, I have never heard about large-scale fraud with alcohol. I am not saying it is not happening, but surely if it were wide-spread and big, it would be known. Complete denaturants will not prevent fraud. The best remedy against ethanol fraud is placing a high financial bond on every batch of ethanol being shipped.

The need for changing the rules is questionable. If denaturing is no longer driven by the needs of the industry, the result will be predictable—higher cost. Not a good plan in times of economic and financial austerity.

Author: Robert Vierhout
Secretary-general, ePURE
Vierhout@epure.org