Germany’s upper house rejects reduction in biofuels targets for 2009

In Germany, the federal parliament’s upper house voted to reject the government’s proposed reduction of the 2009 biofuel blending targets from 6.25 percent to 5.25 percent.  the amount of biofuel that should be mixed with fossil fuels from 6.25% to 5.25% this year.

The upper house also rejected a plan to further increase taxes on the renewable fuel. “We greatly welcome the decision as the blending market is critical for the future of the industry,” a spokesman for the German Biofuels Industry Association said. Legislators had feared that cutting targets would further stress industrial investments made in biofuels and reduce demand for agricultural production.

The German biodiesel industry has dropped 40 percent in production since the federal government dropped a favorable tax credit for biodiesel. German biodiesel sales are projected to drop to 200,000 tonnes in 2009, down from 1.8 million tonnes in 2007.

The lower house can make the proposed reduction into law by passing the proposal once again.

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