German biodiesel plants cut production by 50 percent, now at 10 percent of capacity as gloom grows for industry

In Germany, the executive director of BBK, the German renewable fuels association, said that the German biodiesel industry is producing at only 10 percent of capacity, down from 20 percent in November, and that the industry is in a state of collapse. Peter Scrum, in an interview with Reuters, said that production is being continued only by larger firms. Recently Schrum accused the Finance Minister of trying to “crush us”, as tension erupts between supporters of the biofuels industry among Christian Democrats are pitted against anti-biofuels CD’s and the Social Democratic Party.

The limited German production is primarily for export, following a 60 percent tax hike on biodiesel that has halted sales of biodiesel at German petrol stations.

In Germany, die Welt recebtly reported that hundreds of German biodiesel makers are on the brink of bankruptcy due to increased German taxes on biofuels. The report said that the largest biofuels companies, Verbio AG, Petrotec AG and Biopetrol AG, would survive by cutting back production to service the German B5 mandate, but that the market for B100 has collapsed due to price hikes.

Under previous tax laws, German biofuels production increased from 200,000 tonnes to 3.4 million tonnes in 2007. But the imposition of excise taxes on biofuels has made biodiesel non-competitive with conventional diesel, threatening the viability of the German biodiesel industry.

Earlier this month, the German government presented its long-range biofuels strategy, saying that they had brokered agreement between the auto, oil and farm sectors who are backing the plan. Environment Minister Sigmar Gabriel announced that Germany who set a target of 10 percent of its fuel needs coming from biofuels by 2010, reaching 20 percent by 2020 through the introduction of next-generation biofuels.

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