How To Make Biodiesel

As the European Union considers raising biofuel blending levels to reduce carbon dioxide pollution, Germany’s biodiesel industry are toiling to come from under the weight of taxes implemented last summer. About 30 companies were reported to be considering taking the government to court with claims that biofuels taxes were putting them out of business. The companies, ranging from biodiesel makers to vegetable oil mills to trucking firms, were preparing to lodge a complaint with the constitutional court in April. “Many German biodiesel producers are only working at three-quarters of their production capacity,” Martin Tauschke, chief executive of German renewable fuels industry association BBK told Reuters. “We need to operate at 90% capacity just to cover our costs.” Germany’s tax on biodiesel of [euro]0.09 per liter was implemented in August 2006. The intent was to raise the tax in stages to [euro]0.45 per liter by 2012. Some say the higher vehicle maintenance costs and lower energy content of biodiesel mean that it needs to be at least [euro]0.10 cheaper than fossil diesel to compete. Germany’s biodiesel sales at fuel stations fell from 520,000 tons in 2005, to 476,000 tons in 2006, according to biodiesel association AGQM. Meanwhile, the oilseed analysts of Hamburg-based Oil World, an independent forecasting service, expect that that total German usage of biodiesel would decline by 18% to around 2.2 million tons in 2007. The service also said Germany would likely start exporting biodiesel. “We are already getting reports that thousands of German trucks are filling up with biodiesel in Denmark every day because prices there are cheaper,” Tauschke said. As a result, Junior Agriculture Minister Gerd Mueller made a statement Mar. 7 saying that the “re-examination and adjustment of biofuels taxes is needed. Falling fossil prices in past months have led to a fall in biofuels sales. We must react to this fall so that biofuels do not lose their attractiveness to customers.” Despite the gloom, another Reuters story reported that German biodiesel producer BKN Biokratstoff Nord AG has completed a share issue to aid in their expansion plans. They want to increase annual production capacity to 500,000 tons in three years through a plant expansion. Their plant at Sprakhensehl in north Germany is gradually increasing its capacity, from 35,000 tons a year at the end of 2006, to 50,000 tons presently, to 70,000 tons in the summer of 2007. The company also wants to construct an additional plant that would produce an additional 150,000 tons. BKN Biokratstoff expects a boost in revenue from oil refineries and the blending sector, not the petrol station. “The major oil companies will be our customers,” said the company’s chief executive officer Ulrich Wogart in a Feb. 5 Reuters report.

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