German Biodiesel Sales Slump on New Tax

Germany’s once-booming biodiesel industry has reduced output by 30 to 40 percent so far this year as new biofuel taxes cut demand at fuel stations, biofuels industry association VDB said on Thursday.

“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.

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