End to biodiesel subsidies in Germany

In 2004, biodiesel fuels for transport received subsidies in Germany totalling €559 million, but negotiators for the three leading parties in the new coalition have seized on the drawbacks of biodiesel – mainly poor conversion efficiency and problems relating to intensive agriculture – to save money.

The intention is for oil refineries to mix biodiesel into normal diesel. T&E policy officer Karsten Krause said: “Daimler-Chrysler is very active on sun-fuels and synfuels, so there may be some lobbying aimed at retaining some financial incentive for biodiesel.”

The grand coalition’s environment programme will keep the German ecotax, a target to source 20% of electricity from renewables by 2020, and subsidies for fitting diesel cars with particle filters, though this will be restricted to older vehicles – new cars will be fined if they are not built with a filter. The parties have also promised to reform car taxation in a way that will reduce CO₂ emissions, though what this will mean in reality remains to be seen.

• Denmark and The Netherlands have both announced incentives for drivers to fit particle filters to diesel cars. The Dutch government will pay up to 80% of the costs of fitting filters to all diesel cars, while Denmark has made €40.2 million available in its 2006 budget to ensure fitting filters will not increase costs for consumers.

This news story is taken from the December 2005 edition of T&E Bulletin.