German Biodiesel Industry In Disarray

The German biodiesel industry is in disarray, running at little more than 50% of capacity, and struggling to survive governmental plans to phase in taxes on biofuels to the same levels as those on fossil fuels.

The golden fuel has been also been hit badly by the economic recession, falling crude oil, and the exploitation of the "splash & dash" loophole by the US and other major biodiesel producing nations like Brazil.

German consumption of biodiesel in 2009 is likely to fall to 2.5 million tonnes, down from 2.7 million tonnes is 2008, and almost 25% lower than the 3.3 million tonnes used in 2007. Yet the German biodiesel industry has a capacity to produce 4.8 million tonnes per annum.

An industry spokesman said that biodiesel sales at the pumps had fallen from 1.8 million tonnes in 2007, to 1.1 million tonnes last year and are now just a trickle in 2009, with only 250 petrol stations left offering the fuel for sale on forecourts across the country.

After much prevarication, the EU Commission finally slapped punitive import tariffs on US biodiesel imports in March, but this seems to be too little too late to help German producers.

Faced with proposals to cut the the blending level in fossil fuels from 6.25% to 5.25%, the folly of an industry built almost entirely around government subsidies and mandatory legislation lies idle.