German Biodiesel Industry Running At Just 15 pct Capacity
Germany's biodiesel industry is only producing at about 15 percent of capacity largely because of high taxes, and large numbers of producers are facing closure, Reuters report.
The industry has been producing substantially under capacity this year largely because a biofuels tax increase on Jan. 1 hugely cut sales at petrol stations.
Germany's five million tonne annual capacity biodiesel industry had improved output marginally to 15 percent of capacity from 10 percent in June but capacity utilisation was still at disastrously low levels, Peter Schrum, president of biofuels industry association BBK, told Reuters.
At this time last year the industry was operating around 50 percent of capacity, the industry association has said.
The rise in fossil fuel prices this year had generated slight new biodiesel demand but the industry remained in a crisis, he said.
"German biodiesel is no longer competitive because of the tax burden," he said. "The B100 (petrol station) market for biodiesel is dead."
Producers argue that biodiesel needs to be at least five euro cents cheaper than fossil diesel because vehicles consume more of the green fuel. The tax rises mean the price is almost the same.
"I expect that more production plants will be closed and sold abroad in coming months," Schrum said. "Some have already been sold to the U.S. and Russia."
Germany increased taxes on biodiesel in January this year under the government's programme to raise taxes on green fuels to the same level as fossil fuels.
The government plans to increase taxes on biodiesel in January 2009 to 21 euro cents a litre from 15 cents now.
"The industry will not be able to survive this tax rise," Schrum said. "This rise will kill the rest of the B100 market and probably cause the final death of the industry, which is already half dead."
"I expect more biodiesel plants to declare insolvency in coming months. No industry can work for long periods at such a low capacity utilisation level."
On May 28, German biodiesel producer Campa AG, operator of a 150,000 tonne annual capacity plant, declared insolvency.
The industry has been producing substantially under capacity this year largely because a biofuels tax increase on Jan. 1 hugely cut sales at petrol stations.
Germany's five million tonne annual capacity biodiesel industry had improved output marginally to 15 percent of capacity from 10 percent in June but capacity utilisation was still at disastrously low levels, Peter Schrum, president of biofuels industry association BBK, told Reuters.
At this time last year the industry was operating around 50 percent of capacity, the industry association has said.
The rise in fossil fuel prices this year had generated slight new biodiesel demand but the industry remained in a crisis, he said.
"German biodiesel is no longer competitive because of the tax burden," he said. "The B100 (petrol station) market for biodiesel is dead."
Producers argue that biodiesel needs to be at least five euro cents cheaper than fossil diesel because vehicles consume more of the green fuel. The tax rises mean the price is almost the same.
"I expect that more production plants will be closed and sold abroad in coming months," Schrum said. "Some have already been sold to the U.S. and Russia."
Germany increased taxes on biodiesel in January this year under the government's programme to raise taxes on green fuels to the same level as fossil fuels.
The government plans to increase taxes on biodiesel in January 2009 to 21 euro cents a litre from 15 cents now.
"The industry will not be able to survive this tax rise," Schrum said. "This rise will kill the rest of the B100 market and probably cause the final death of the industry, which is already half dead."
"I expect more biodiesel plants to declare insolvency in coming months. No industry can work for long periods at such a low capacity utilisation level."
On May 28, German biodiesel producer Campa AG, operator of a 150,000 tonne annual capacity plant, declared insolvency.