Until a few months ago, making biodiesel in Germany was great business. Tax breaks were good and it was proclaimed that biodiesel was good for the environment. Between 2000 to 2006, production increased from 200,000 tons to 3.4 milion. Source oil was usually soy or rapeseed (Brassica napus), and about 1 million Ha of crops, 10 percent of Germany's crops, are rapeseed.

However, from January 1st, Herr Taxman is going to ask for 9 cents for each liter of biodiesel sold, and this amount will increase to 65 cents in 2012. Add the fact that the subsidies (which totaled $3,000 million in 2006) won't arrive anymore and you have reasons for this business to stop being interesting. Current biodiesel production figures are actually slowing - and imported rapeseed oil is now cheaper.

Of course, the Federal Association of Organic Fuels's Peter Schrum accused the German Government of "crushing" them. And the current Government coalition entered into crisis when deciding what to do with that extra income. Adding to the anti-biodiesel proponent's side of the arguments, Hamburg's Environmental Institute on biofuels released a report recently speaking about the hidden environmental costs of biodiesel.

Related

• European biodiesel manufacturers against US biodiesel imports (again)
• EU might raise mandatory biodiesel blend
• The EU reduces subsidies for biofuel crops

[Source: IPS via Biodieselspain]