Our
main export market - Germany's once-booming biodiesel industry has reduced
output by 30 to 40 percent so far this year as new biofuel taxes cut demand at
fuel stations.
Germany started taxing
biodiesel last August as the government sought to claw back tax revenues lost as
drivers switched from fossil fuels.
But sales had collapsed in
recent weeks as the new taxes and the fall in fossil fuel costs meant biodiesel
had lost its price advantage.
Germany's is the European
Union's largest biodiesel producer, with production capacity rising from two
million tonnes in 2005 to 3.2 million in 2006 and just over four million tonnes
at present.
Germany's government
introduced a 9 euro cents a litre tax (here in the UK it is already 28.5p
per litre) on biodiesel, saying this would rise in automatic stages to match the
45 cent a litre tax on fossil diesel by 2012.
There has been a substantial
fall in biodiesel sales at petrol stations which is continuing and has
been caused by the tax. This was despite the start of compulsory blending
of biodiesel with fossil fuels at oil refineries, which started in Germany in
January but was only likely to generate demand for 1.5 million tonnes of
biodiesel annually.