UpdateGerman law in threat to soy, palm oils

22 October 2008 16:59  [Source: ICIS news]

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LONDON (ICIS news)--The German government has passed legislation saying soy oil and palm oil derived biodiesel can no longer be credited against biofuel quotas unless new sustainability criteria are met, the German Ministry of the Environment said on Wednesday.

 

“This is terrible news. If they remove palm methyl ester [PME] and soy methyl ester [SME] it kills the B100 market,” a broker said.

 

Under the new legislation, the reduced level of taxation for 100% (B100) production will only be available on pure rapeseed blends pending ratification of the new sustainability requirements, which will be based on upcoming EU legislation.

“This is not showing a bright future for the market. Combined with the rumoured increase in import duties on B100 material coming into the EU from the US this will

have a negative effect on the biodiesel market,” said a European trade.

 

“There is a lot of excess production capacity based on the expectation of increased demand from rising targets and people have invested in esterification units in Rotterdam. The investors [will] surely complain and not allow this to pass in the parliament,” the trader added.

 

Rapeseed methyl ester (RME) alone could not meet European biodiesel requirements, sources said.

 

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By: Rachel Howat
+44 20 8652 3214

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