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Home | Green Cars News | Biodiesel | Germany's Biodiesel Industry is Close to Collapse

Germany's Biodiesel Industry is Close to Collapse

18 January, 2008 12:00:00

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Once booming Germany's biodiesel industry is now close to collapse because of a tax increase that kicked in at the first of the year with many companies facing closure.

Die Welt reported that bigger biofuel firms like Verbio, Petrotec and Biopetrol are surviving the downtrend due to the consolidation in the industry and also the minimum-blend regulation.

Biodiesel refiners in Germany are only producing at 10 percent capacity, according to the Reuters story from a European biodiesel conference. That's down from 20 percent the year before.

Because of the downturn, some biodiesel manufacturers are taking apart their factories and selling the equipment to manufacturers North America.

At a time when the European Union wants to increase biofuel use to stop global warming, Germany in late 2006 started taxing biodiesel as the government said it could not afford to lose the large tax revenue from fossil diesel.

A second round of tax increases on biodiesel was imposed on January 1 despite protests from biodiesel producers.

The fuel tax on biodiesel has been raised from €0.09 to €0.15 per liter by the German government to bring energy taxes in line with the European Union rules.