Germany’s biofuel industry can breathe a sigh of relief. The industry had initially feared that existing tax privileges for biomass fuels would be lifted and that existing fuels would henceforth need to have a biological component. This will not be the case, according to Norbert Schindler, vice-president of the DBV (Deutscher Bauernverband) and a member of parliament for the Christian Democratic Union. A clause in the programme of the new coalition government had given rise to speculation regarding the future of pure biofuels, which have already been successfully marketed in Germany.
Speaking before 750 participants of the “Fuels of the Future 2005” symposium at the International Congress Centre in Berlin, Schindler emphasised that he welcomed the new regulation included in the government’s platform to require additives and tax the products accordingly. He said the clause requiring additives was not only motivated by taxation policies, but was also an outgrowth of the position of the petroleum industry, which in the past had taken too passive a role with regard to biofuel. When it comes to marketing pure fuel, Schindler said no changes will be made to the current situation. Tax privileges for pure biofuel will remain in place, as they have been in the past. “This was confirmed to me just prior to this conference in a conversation with Michael Meister, who participated in the negotiations on behalf of the Christian Democratic Union,” Norbert Schindler said.
The Union for the Promotion of Oil and Protein Plants (Union zur Förderung von Oel- und Proteinpflanzen e. V., UFOP), which has been actively pursuing the introduction of bio-diesel fuel on the German marketplace for 15 years, welcomes the implementation of the coalition government’s plans as the foundation for future growth of the biomass fuel industry.
Figures quoted in the current discussion of biofuels – some financial experts spoke of a loss of tax revenue amounting to more than one billion euros due to biofuel tax privileges – are evidence of a considerable lack of understanding in the matter, according to the UFOP. For example, it has long been known that in the case of bio-diesel, up to 80 percent of tax revenue shortfalls are refinanced through domestic production of the fuel. A study by the renowned IFO Institute in Munich demonstrated this in detail. And besides, the biofuel industry is not opposed to partial taxation of pure biomass fuels. Tax reform on the basis of overcompensation calculations has been discussed for some time and deemed acceptable. The complete abolition of tax privileges, on the other hand, would be a death knell for the marketing of pure biofuels. To the relief of all concerned, the latest statements by the new government have allayed these fears.