CROPENERGIES : Germany Scraps Plan to Raise Ethanol Co
04 avr. 2008•18:08
Germany Scraps Plan to Raise Ethanol Content for Cars (Update3)
By Jeremy van Loon
April 4 (Bloomberg) -- Germany dropped a plan to reduce air pollution next year by doubling the ethanol content in gasoline, because it threatened to increase fuel prices for millions of car drivers.
The biofuel would have been increased to comprise 10 percent of all gasoline sold. That meant more than 3 million mainly foreign-brand vehicles would have been unable to run on the new blend, forcing drivers to fill up with more expensive ``super-plus'' gasoline, Environment Minister Sigmar Gabriel told a news conference in Berlin today.
``We don't want to take responsibility if several million people who drive old cars, only because they live on lower wages, have to use expensive'' fuel, he said.
Burning biofuels, such as biodiesel made from rapeseed or ethanol from sugar beets, generates up to 40 percent less carbon dioxide than gasoline, the Environment Ministry says. Transportation accounts for a fifth of the 27-nation European Union's greenhouse-gas emissions, blamed for global warming.
Gabriel came under pressure from members of his own Social Democratic Party and Chancellor Angela Merkel's Christian Democrats to give a break to drivers who already are paying higher fuel prices, Bild-Zeitung reported today.
The number of cars that can't burn the so-called E10 blend is about 10 times initial estimates by the German automakers and car-import associations.
Shares of German biofuel makers declined. Verbio AG fell 7 cents, or 5.2 percent, to 1.28 euros, while BKN Biokraftstoff Nord AG was unchanged, after sinking as much as 4.5 percent, at 5.30 euros as of 2:50 p.m. in Frankfurt.
The price of a liter of diesel in Germany is about 1.32 euros (about $8 a gallon), while the same amount of ``super- premium'' gasoline costs about 1.40 euros, according to Gasoline-Germany.com, a fuel price Web site.
``In light of the fact that more than 3 million vehicles are not suited to run on E10, it can hardly be expected that there would be any other outcome,'' Ulrich Becker, vice president of the ADAC German Automobile Association, Europe's biggest lobby group with 15 million members, said on its Web site today.
ADAC expects biodiesel and ethanol to play an ``important'' role in mobility after 2012, when the number of vehicles built to burn an increased content of renewable gasoline and diesel is higher than it is now, Becker said.
Merkel wants a fifth of car fuel to comprise biofuels by 2020. To meet that goal, Germany will increase its use of two different biofuels -- pure ethanol and biodiesel, Gabriel said.
The EU, which includes Germany, aims to power 10 percent of transportation in the region with biofuels by 2020.
``I'd say this news is pretty neutral for us as an ethanol producer,'' said Lutz Guderjahn, chief operating officer of Cropenergies AG, in an interview. ``We still see the fuel segment as the major sales driver.''
Cropenergies, a biofuel maker based in Mannheim, Germany, gets all of its raw materials from Europe. Guderjahn reiterated his forecast of sales amounting to between 175 million euros ($275 million) to 180 million euros this year.
``The ethanol production capacity is not there,'' to meet the 10 percent target next year in Germany, Robert Vierhout, general secretary of the European Bioethanol Fuel Association said on the phone from Brussels. ``We would need to import a lot more into the EU. We were speeding ahead when we should have gone more slowly.''
The benefits of using plant material for fuel, heating and feeding livestock should be bundled together and considered as a single source of energy for the purposes of policy, Gabriel said. Already three-quarters of Germany's renewable energy comes from biomass for use in heating, fuels and electricity. The government is sticking with its plan to continue supporting the power source.
``We need to look at the net balance of all of these uses of bioenergy,'' he said. ``It doesn't make any sense to separate them, especially when the point is to reduce carbon dioxide emissions and save rainforests.''
About 80 percent of land gained from cutting rainforests in countries such as Brazil is used to grow crops to feed livestock that is then consumed as meat, the minister said.
Studies conducted by Oxfam, Greenpeace and the Organization for Economic Cooperation and Development say biofuels will have a limited effect on emissions, push up food costs and damage the environment.
``People should be driving more efficient cars than many of the ones we see on German roads instead of tanking up with a fuel that contributes to destruction of rainforests,'' said Ulrike Kallee, a biofuel policy analyst at Greenpeace in Hamburg, in an interview.
To contact the reporter on this story: Jeremy van Loon in Berlin at firstname.lastname@example.org.
Last Updated: April 4, 2008 10:17 EDT
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