World Biodiesel Output Growth May Slow

Global biodiesel production rose sharply in 2006, but growth should slow in the coming year as new German taxes cut demand, analyst F.O. Licht said in a report on Wednesday.

Overall worldwide production of the renewable fuel source was 5.4 million tonnes last year, up 80 percent from 3.0 million tonnes in 2006. The report said 2007 production will total 7.9 million tonnes, an annual growth rate of 46 percent.
In 2006 Germany was by far the largest biodiesel producer in the European Union, increasing output some 45 percent to around 2.2 million tonnes from 1.5 million tonnes the year before.

However, the German government set a tax of nine cents per litre on biodiesel at the pump in the summer of 2006, and said it intends to raise the duty in automatic stages through 2012 until it matches the 45 cent per litre fossil diesel tax.

The report said the partial taxation resulted in considerably lower sales and was likely to impact 2007 biodiesel production as well.

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