INTERVIEW - German Biodiesel Sales Slump on New Tax
Date: 23-Feb-07
Country: GERMANY
Author: Michael Hogan
"It is appalling that a new tax is cutting German biodiesel sales at a time when there is an urgent debate about how we can cut carbon dioxide emissions," VDB Chief Executive Petra Sprick told Reuters.
Germany started taxing biodiesel last August as the government sought to claw back tax revenues lost as drivers switched from fossil fuels.
But sales had collapsed in recent weeks as the new taxes and the fall in fossil fuel costs meant biodiesel had lost its price advantage, Sprick said.
"The government's tax legislation has torpedoed the future of biodiesel," Sprick said.
Germany's is the European Unmion's largest biodiesel producer, with production capacity rising from two million tonnes in 2005 to 3.2 million in 2006 and just over four million tonnes at present.
Germany's government introduced a 9 cent a litre tax on biodiesel, saying this would rise in automatic stages to match the 45 cent a litre tax on fossil diesel by 2012.
"There was a substantial fall in biodiesel sales at petrol stations which is continuing and was caused by the tax," she said. "There are no precise statistics but we hear from our member companies that output is down by 30 to 40 percent."
That was despite the start of compulsory blending of biodiesel with fossil fuels at oil refineries, which started in Germany in January but was only likely to generate demand for 1.5 million tonnes of biodiesel annually.
She urged the government to review its tax policy.
"The biodiesel production capacity available today in Germany can reduce CO2 emissions by 10 million tonnes a year," she said.
"The government keeps saying second generation biomass-to-liquid fuels will help.
"But this is untried technology and the first commercial plant is not scheduled to enter service until 2011."
