German biodiesel taxes to rise 40 percent in January: producers cry “extinction!”

In Germany, the biodiesel industry is facing a new extinction threat if federal government carries forward with its plant to increase biodiesel taxes by 40 percent in January.  The tax hike, from 15 cents to 21 cents per liter, is part of a based increase of green fuel taxes until they are the same as conventional fuel taxes. A previous tax hike last January removed the price advantage of biodiesel over conventional diesel and resulted in a massive decline in biodiesel output.

Germany background

The Federal Environment Ministry said that it plans to reduce the biofuels target from 17 percent to 12 percent by 2020, because of “changes in circumstance”. The current German target is 6.25 percent in 2009, and the government said that the failure of E10 in the market meant that the 2009 quote would have to be lowered to 5 percent and the gasoline portion from 3.6 percent to 3 percent.

A survey by the Center for Advanced Technology found that 27 percent of German oilseed mills had shut down production entirely and that 36 percent are running on less than 50 percent of capacity.

A 95 Mgy Südzucker ethanol plant, the largest in Europe, commenced production in Zeitz last month. The plant uses sugar beet syrup as a feedstock, and will also produce its own biogas that will power special burners that eliminate all aromatic compounds associated with the production process.

Theodor Heuss Investitions und Beteiligungs said that it will continue development of its 18 Mgy etahnol plant in Torgau, Saxony.

Lufthansa said last month that it would convert up to 10 percent of its fuel usage to biofuels by 2020, as a part of its overall effort to reduce emissions by 25 percent in that time frame

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