Germany’s Verbio announces loss, says unable to compete with Brazilian ethanol due to high grain prices

German ethanol producer Verbio said that it is unable to compete effectively against cheap imported ethanol from Brazil, and asked for protection from the national government. The company announced a loss of €600,000 for the first nine months of 2007, compared to a $25.7 million profit for the corresponding period in 2006, with sales dropping from €325.7 million to €307.1 million.

Verbio said that the high cost of grains has caused the problem, whereby Brazilian ethanol costs 55 cents per liter but the cost of grain ethanol production is 80 cents a liter.

The announcement highlights continued bad news for the European biofuel industry. Biodiesel plants at Borken and Emden, among others, have been closed or halted owing to problems with competition with US imports.

The German government announced that it would begin taxing the biodiesel business in August 2006, and the decision threw the industry into a tailspin. The German government has also indicated it will raise taxes in 2008. The German renewable fuels association, BBK, estimates that biodiesel production plants are operating at 40 to 50 percent capacity following the governments decision to tax the industry.

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