Germany’s ruling coalition has agreed to introduce compulsory quotas of biofuels to be mixed with fossil fuels by refiners from the start of 2007, the Finance Ministry said on Tuesday. In a statement, the ministry said the conservative-Social Democrat government’s plan would compel German oil refineries to blend two percent biofuel content in petrol until 2009, and 4.4 percent biodiesel content on conventional diesel.
In March, the ministry had indicated the blending quota on diesel fuel would be as high as 5.75 percent. The quotas will be tradeable, meaning that oil refineries which voluntarily use more than the minimum amount of biofuels will be able to sell the surplus quota to those that undershoot the target.
Finance Minister Peer Steinbrueck said the deal strengthened biofuels’ position in Germany. “This ensures that biofuels will play a significant role on Germany’s mineral oil market in future,” he said.
In March, Germany’s cabinet approved plans to end special tax breaks for biodiesel, which foresaw a 10 cent tax per litre of the fuel sold at petrol stations and a 15 cent tax per litre on biodiesel used for blending at refineries.
Steinbrueck’s ministry said the new measures would generate an additional 1.6 billion euros ($2.03 billion) in tax revenues next year, 1.7 billion in 2008, and 2.3 billion in 2009. In 2010, the figure would dip slightly to 2.2 billion, it added.
The ministry said subsidies on pure biofuels would continue to be granted for a transitional period lasting until the end of 2009, initially using the tax rates valid from August 2006. The ministry noted there would be regular checks on whether support for biofuels was exceeding European Union limits. It said that pure biofuels used in agriculture would remain exempt from taxation in future.
Source: oleoline.com vom 2005-05-02.