German biofuel quota cut risks ag crisis – industry group

20 March 2009 17:40  [Source: ICIS news]

TORONTO (ICIS news)--The German government’s proposed reduction of the 2009 biofuels blending quota could create a crisis in the country’s farming sector, biofuels producers' group Verband der Deutschen Biokraftstoffindustrie (VDB) said on Friday.

The Berlin-based group appealed to parliamentarians to reject the government’s legislative proposal which is due to be passed into law next week.

VDB general manager Johannes Lackmann the quota cut – from 6.25% to 5.25% - had been initiated last year at a time of high agriculture and food prices.

Meanwhile, however, agricultural prices were at a “historic low” and farmers were facing an oversupply situation.

In fact, domestic rapeseed oil was now cheaper than imported soyoil, Lackmann added.

To implement the quota cut under those conditions would aggravate farmers’ already difficult business outlook as it would further reduce the market for farm products such a rapeseed, he said.

“The government’s plan [to reduce the quota] is completely irrational,” he said.

Lackmann also said that a further objective of the German legislative proposal – namely, to stop the import of palm and soyoil that was not produced in an environmentally sustainable manner - had in the meantime been addressed by EU anti-dumping duties.

German biofuel producers had invested in new capacities in past years trusting that government policies would continue to support the sector, VDB added. Short-term policy changes, such as the proposed quota cut, would undermine biofuels producers and farmers, it said.

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By: Stefan Baumgarten
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