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GERMANY PLANS TO 'FURTHER REDUCE' USE OF CROP-BIOFUELS

Published date: 29 April 2022

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Germany plans to further reduce the use of biofuels produced from food and feed
crops because of rising food costs and waning supply of agricultural products
caused by disruption of exports from main suppliers Ukraine and Russia.

Details of a reduction to Germany's cap on crop-based biofuels are being
discussed with the agricultural ministry, environment minister Steffi Lemke
said. The government aims to decide on the plans "as soon as possible", as
spokesperson told Argus.

Use of crop-based biofuels to comply with Germany's greenhouse gas (GHG)
emission reduction quota is capped at 4.4pc this year. It is unclear by how much
the cap is planned to be lowered. Germany has already banned the use of biofuels
produced from palm oil from 2023.

German consumption of crop feedstock such as wheat, rapeseed, corn and soybeans
for the production of biofuels is estimated at 9.8mn t this year, the ministry
told Argus. Of this only 9pc will come from domestic production and the rest
from imports.

German biofuels and oilseeds growers' associations VDB and Ufop urged the
government not to change the blending mandate. Market forces are already
reacting to the Russia-Ukraine conflict and are taking regulatory action, VDB
said.

"Various biodiesel producers are reporting that they are reducing their
production due to the feedstock prices," said VDB managing director Elmar
Baumann. "Instead, the rapeseed oil flows into the food sector. This shows that
the market is responding effectively to the changed supply situation."

Germany would follow other European countries such as Norway, Sweden and Finland
in changing their domestic blending mandates in reaction to surging prices.
Belgium's Green coalition — made up of the Groen and Ecolo parties — earlier
this month said it would to table a proposal in parliament calling for use of
first-generation crop-based biofuels to be scrapped.

By Sophie Barthel



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