German biodiesel makers knock court’s tax ruling

31 July 2007 17:51  [Source: ICIS news]

TORONTO (ICIS news)--Many German biodiesel plants will be forced to stop operating after the country's constitutional court rejected a case seeking to overturn legislation that will end tax benefits for biodiesel, an industry association said on Tuesday.

 

Bundesverband BioEnergie (BBE) was commenting on the court's ruling, released on Monday, refusing to admit a constitutional complaint brought by biodiesel makers against legislation phasing out the tax exemptions for biodiesel from 2008, which will lead to tax hikes on the fuel.

 

The biodiesel makers argued they had made big investments in new capacity, trusting that the existing tax benefits would continue.

 

But the court said that phasing out the benefits would not violate the biodiesel makers’ constitutionally guaranteed rights, in particular their property rights.

 

The exemption would be phased out in stages through 2012 and was accompanied by biodiesel blending quotas that would help biodiesel makers to at least partially offset negative impacts, the court added.

 

Industry association BBE said the industry needed both the tax benefits and blending quotas to continue to be viable.

 

BBE added it was continuing to press politicians on the issue. Some politicians had already indicated they may be willing to suspend the tax hike for next year and further boost blending quotas, it said.

 

Germany’s government plans to increase tax on biodiesel by 6 cents/litre, to 15 cents in 2008, and a further rise to 45 cents by 2012, according to a spokeswoman from VDB, another industry association.

By: Stefan Baumgarten
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