Germany’s Verbio halts investment plans on regulatory uncertainty

06 December 2012 16:26  [Source: ICIS news]

LONDON (ICIS)--Verbio is halting its investment plans because of an uncertain regulatory environment for biofuels in Germany and the EU, the Germany-based biofuels firm said on Thursday.

Verbio pointed to subsidised imports of biodiesel from Argentina and Indonesia, which, it said, distorted the market, as well as a lack of control mechanisms to enforce sustainability requirements for biofuels.

Verbio added that it would stop investing in new biomethane plants in eastern Europe, and it would seek to cut costs and reduce jobs. It did not say how many jobs may be affected.

“At the moment we do not have any underlying foundation on which we could realise our investment plans reliably,“ CEO Claus Sauter said.

“The current situation shows that there is no reliable framework in Germany and Europe for the second-generation of biofuels desired by the EU,“ Sauter said.

Sauter said that Verbio was responding to “ongoing, massive competitive distortions” in the German biofuel market caused by the import of subsidised palm oil-based biodiesel from Indonesia and soybean-based biodiesel from Argentina.

Another factor were “disproportionately large volumes of biodiesel based on waste cooking oil that are produced by dubious sources from all over the world and are counted twice in meeting biofuel quotas,” he said.

As a result, Verbio experienced a considerable downturn in its plant capacity utilisation during the summer months, in particular for biodiesel, he said.

Sauter acknowledged the EU’s trade proceedings against Argentina and Indonesia but he said it was too early to say whether and when those measures may have an effect.

The same was true for measures taken by the German government to tighten control mechanisms for biodiesel based on waste cooking oil, he said.

Verbio, for its part, would now be concentrating on its existing business, with a focus on optimising internal structures to ensure profitability, the CEO said.

By: Stefan Baumgarten
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