German biofuels may idle 6 plants on quota cut

08 October 2008 18:18  [Source: ICIS news]

TORONTO (ICIS news)--Germany’s decision to reduce biofuels quotas could force producers to idle some 600,000 tonnes of capacity, equivalent to six plants, next year, the country’s biofuels industry group Verband der Deutschen Biokraftstoffindustrie (VDB) said on Wednesday.

 

Germany's federal government cabinet decided this week to reduce biofuels quotas to 5.25% from 6.25% for 2009 and to freeze quotas at 6.25% from 2010 onward.

 

The cut came as critics in Germany and elsewhere blamed blending quotas for rising food prices and doubted biofuels’ net benefits for the environment.

 

“This decision was unreasonable, there is no reason to reduce quotas,” said VDB general manager Johannes Lackmann, adding that the higher quota levels would have been technically feasible without any problems.

 

Germany’s biofuels producers had built up significant capacities, enabling them to command a 7.6% share of the overall fuels market last year.

 

But with the reduction in quotas producers would be forced to close plants and lay off workers, Lackman said. The only winners were oil refiners, while biofuels producers and the environment were losing out, he added.

 

According to VDB, capacity utilisation in Germany’s biofuel plants is already at around 60%.

 

Earlier on Wednesday ICIS news reported that buyers were returning to the European biodiesel markets after holding off for the past fortnight amid uncertainty over turbulence in the global markets.

 

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