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Biofuels in Germany

General
For renewable electricity, the Renewable Energy Sources Act (Erneuerbare Energien Gesetz, EEG) came into operation on April 1st, 2000. It ensured independent power producers, either individuals or companies, to be able to deliver power to the electricity grid: grid operators were obliged to accept this power and to pay fixed tariffs to the producers: feed-in tariffs. The Act was revised in the year 2004 (August 1st, adopted on July 21st, 2004). For the year 2009 new amendments were made to the Act (adopted on June 6th, 2008). A feed-in tariff is guaranteed for 20 years for most technologies (only hydropower has a different period). In order to compensate for technology learning effects (through economies of scale and efficient production and conversion) the tariff is each year decreased with a certain percentage. The objective of the Renewable Energy Sources Act (EEG) has been to increase the share of total power supply that is derived from renewables to at least 12.5 per cent by 2010 and at least 20 per cent by 2020. As of 2007 the long-term targets have been made more ambitious: the 2020 share of renewable energies in electricity generation aimed for has been increased to 25-30%, and a continued steady expansion after 2020 is also aimed for.

Regarding renewable heating and cooling, the Bundestag adopted on 6 June 2008 a law on the promotion of renewable energies in the heat sector (Erneuerbare Energien Wärmegesetz, known as EEWärmeG). This law entered into force January 1st 2009 and obliges the owners of new buildings to cover a part of their heating needs from renewable energy. The EEWärmeG aims at doubling the share of renewable heat from 7 to 14% by 2020. The law uses of renewables obligations for heating in new built (or renovation) projects, but leaves investors free to choose their own energy source.

The law recognises solar energy, biomass, geothermal energy and ambient air heat. The obligatory part depends on the type of renewable energies used in the building. It is 15% for solar energy, 30% for biogas and 50% for all the others. Among these other renewables, biomass fuels (firewood, pellets, chips, etc.) can only be used in high-yield boilers that comply with air quality legislation. The owners can, if they so desire, combine several different sources of energy. A solar collector can in this way be completed by a wood pellet burning boiler. The EEGWärmeG law does not only consist of obligations. It also reinforces the program of development of the renewable energies market in allotting it €500 million per year up to 2012. 

For biofuels, a law on biofuels (Biokraftstoffquotengesetz) came into force on 1st January 2007, consisting of a partial taxation associated with a quota policy.

On November 7th 2007, the renewable energy law was evaluated and judged pertinent by the German Parliament. This evaluation is based on indicators of installed capacity, on the number of tons of CO2 prevented and on the creation of jobs. The Parliament’s report also recommended increasing the share of renewable electricity to 27% in 2010. The report also called on the adjustment of the feed-in tariff of certain technologies including onshore and offshore wind power. 

On the European level, support exists for growing biomass based on the European agricultural policy (CAP – Common Agricultural Policy). The CAP reform of 1992 created the possibility to grow non-food crops on set-aside land, without loosing the set-aside premium (around 300€/ha, depending on average yields), with a maximum amount of slightly less than 5 million ha for oilseeds for food purposes and a maximum of 1 million tonnes of soybean meal equivalent for industrial purposes. In the period 1997-1999 lower set-aside obligations in the EU came infto force. From 1999 the set-aside obligation stabilized at higher level (10%) up to 2007, and more set-aside land was used for non-food rapeseed. From 2004 energy crop support of 45€/ha was available in the EU15 for the production of energy crops on basic land (with a maximum of 1.5 million ha). The system was extended to the extension countries in 2007, with an increase of the maximum area to 2 million ha. In 2008 the European Commission proposed to abolish the energy crop premium and the compulsory set-aside, which would then result in no specific support for bioenergy production in the CAP. However, the rural development policy of CAP will still address both the supply and use of bioenergy. Examples are support for biogas production facilities, perennial energy crops, processing of biomass towards energy, installations and infrastructure for renewable energy from biomass.By 2006, most Member States had adopted national biofuel targets under the Biofuels Directive. Most national targets followed the reference value of 5.75% by 2010, with Germany obliging fuel suppliers to achieve a minimum blending of 6.75% by 2010 and France aiming for a 7% target.

According to the Directive 2009/28/EC (23 April 2009) of the European Parliament and of the Council on the promotion of the use of energy from renewable sources the target for the share of energy from renewable sources in gross final consumption of energy in the year 2020 for Germany is 18% (in the year 2005 the share was 5.8%). The Directive has a mandatory 10 % target for transport to be achieved by all Member States, which refers to renewable sources as a whole, not biofuels alone.

Renewable energy projections according to the National Renewable Energy Action Plan for Germany
The National Renewable Energy Action Plan (NREAP) for Germany was submitted in August 2010. The target according to Annex I of Directive 2009/28/EC is 18% for the year 2020 and the projected NREAP share in that year is 19.6%.  According to the projection, the most important contribution in the year 2020 is expected from biomass (renewable heating and cooling) (11355 ktoe, 29% of all renewable energy). Second important contribution is expected from wind power (104.4 TWh or 8980 ktoe, 23% of all renewable energy). The third largest contribution is from biodiesel (renewable transport) (4443 ktoe, 12% of all renewable energy). Wind power contributes with 45.8 GW (104.4 TWh) in the year 2020 (onshore wind 35.8 GW and 72.7 TWh, offshore wind 10.0 GW and 31.8 TWh). For solar photovoltaic the 2020 contribution is projected to be 51.8 GW (41.4 TWh). For solar thermal the 2020 contribution is projected to be 1245 ktoe. The two most important biofuels are projected to contribute 4443 ktoe (biodiesel) and 857 ktoe (bioethanol / bio-ETBE) by 2020. The renewable electricity production from solid biomass amounts to 24.6 TWh (2113 ktoe) and for biogas it is expected to be 23.4 TWh (2015 ktoe). The consumption of renewable heat is expected to amount to 8952 ktoe for solid biomass and 1692 ktoe for biogas.

Renewable transport fuels (biofuel)
At the beginning of 2009, a combined supplementary quota of 6.25% was applied for the two fuels. It shall then be gradually increased to 8% in 2015. This last quota does not call into question the minimum incorporation rates for petrol and diesel fuel, which shall continue to be applied. In this law, the government has planned to keep a more favourable tax system for other, less developed types of biofuels. The law provides for maintaining a degressive tax incentive during a transition period up to the end of 2011 for vegetable oil and biodiesel used in pure form outside of the quotas. The law also provides a degressive tax incentive for second generation biofuels, fuel biogas and E85 up to 2015. Today, these fuels still have a total exemption taking their production costs into consideration. Furthermore, the German Minister of the Environment has given up on the E10 project that targeted raising the proportion of ethanol in classi-cal petrol from 5% to 10% at the beginning of 2009. This decision follows a report of the “Automobile Importers Association” (VDIK), which estimates the number of vehicles that shall present technical incompatibilities with this fuel at 3.3 million. This decision would have forced the owners of these vehicles to consume “super plus”, which is more expensive and more pollutant.

According to the latest statistics published by Federal Office for Economy and Export Control (Bundesamt für Wirtschaft und Ausfuhrkontrolle - BAFA), total sales of biodiesel in Germany amounted to about 2.6 million tonnes and 61.000 tonnes of vegetable oil in 2010 for use as fuel in 2010. Approximately 2.3 million tonnes were admixed to the total consumption of 32.1 million tonnes of diesel fuel (30.9 million tonnes the year before), which accounts to 7.1 per cent. Sales of pure vegetable oil fuel dropped from 100,000 tonnes in 2009 to a mere 61,000 tonnes in 2010. However, all in all, the share of biodiesel and vegetable oil fuel in the total biodiesel market amounted to 8.1 per cent (8.4 per cent the year before).

The table below lists the main biofuel-related measures in Germany. The table has been taken from the ELOBIO project .

 

 

Valid until

 

Tax incentives – mandates

 

2004

Amendment of the Mineral Oil Tax Act: not only pure biofuels, but also mixed biofuels are exempted from the excise tax on mineral oils in proportion to the amount of biofuel that they contain. In case of overcompensation, the amount of the tax exemption may be reduced for the following years.

2009

2006

 Energy Tax Law:
- Biofuel Quota Act: mandate for fuel distributors to include specific quota of biofuels from 2007 (fully taxed). Penalties in case of non-compliance.
- introduction of tax on pure biodiesel and pure plant oil, with yearly increase up to 2012
- extended subsidies for 2nd generation biofuels + tax exempted until 2015.  E85 regarded as 2nd generation biofuel (biofuel part not taxed).

2012

 

 

 

 

Standards

 

1994

DIN V 51606 (pre-norm) for biodiesel (PME).

1996

1997

DIN E 51606 for biodiesel (FAME)

2003

2000

RK 5/2000: first quality standard for PPO

2005

2003

DIN EN14214:2003-11, European norm for biodiesel (FAME), valid from 2004

 

2006

DIN V51605, preliminary German standard for pure plant oil (PPO)

 

2007

E DIN 51625:2007-10: German norm for E85

 

2008

E DIN 51626-1:2008-01: German norm for 10%vol ethanol blending in gasoline (E10)

 

2008

E DIN 51628:2008-01: German norm for 7%vol biodiesel blending in diesel (B7)

 

 

 

 

 

Other incentives / support programmes

 

1991

Research programme for fuels based on rapeseed (Kraftstoff aus Raps)

1994

1993

The FNR (Agency for Renewable Resources) was initiated by the Federal Ministry of Nourishment, Agriculture and Forestry in order to support research and development in the subject area of renewable resources.

 

2000

Market Launch Programme Biogenous Lubricants and Transportation Fuels

 

2000

Subsidy of construction or conversion of private filling stations for biodiesel and SVO through a grant of regularly 40 % of the costs, especially in the areas of agriculture, forestry, and building construction.

2006

2007

The German government is planning to set up an environmental certification system for biofuels. A Biofuels Sustainability Ordinance has been approved in the beginning of 2008, wherein biofuels will only be credited to the EU-quota obligations and are only eligible for tax reductions if the fulfilment of the requirements of the Ordinance is proofed

 

2008

The German Minister of the Environment has given up on the E10 project that targeted raising the proportion of ethanol in classical petrol from 5% to 10% beginning in 2009. This decision follows a report of the “Automobile Importers Association” (VDIK), which estimates the number of vehicles that shall present technical incompatibilities with this fuel at 3.3 million.

 

 2011

 From January 2011 the environmental certification system for biofuels is in effect

 

 

Market conditions (apart from measures)

 

1995

Communication of Volkswagen to support Biodiesel and to assure the provisions of warranties for nearly all the Diesel models including the brands Audi, SEAT, Skoda and Volkswagen from construction year 1996 onwards, valid for all European countries and beyond. Before this public announcement a few other companies had given warranties – mainly for agricultural machinery. Other manufacturers followed (e.g. DaimlerChrysler, MAN and Volvo).

 

1996

Law stops marketing of “leaded petrol”. More than thousand tanks in public fuel pump stations are open for replacement, thus Biodiesel is adopted as an attractive option by more than 600 free public fuel pump stations within a few months.

 

1999

AGQM was founded (Association Quality Management Biodiesel) as an association for quality assurance in biodiesel production and distribution

 

2004

Pure biodiesel available at approx. 1900 pumps

 

2005

VW withdraws the general approval from Euro 4 models

 

2008

UFOP reports that the market for pure biodiesel in Germany has collapsed. In January 2008 the wholesales prices of biodiesel were (for the first time) higher than ordinary diesel.  In May 2008 UFOP reports that because of increasing diesel prices, biodiesel is attractive again for the market.

 

2008

April 2008: start of Choren ‘Beta’ production plant in Freiberg, able to produce 15000 tonnes of synthetic diesel from wood (‘sundiesel’).

 

2008

The first consignments of certified palm oil delivered under the rules of the Round Table for Sustainable Palm Oil, will arrive in Germany during the second half of the year.

 

2009

The Federal Agricultural Minister and the Federal Environment Minister the cabinet has approved the National Biomass Action Plan

 

April 2009, following a proposal by the Federal Agricultural Minister and the Federal Environment Minister the cabinet has approved the National Biomass Action Plan. It includes support for increased use for heating purposes and calculating support for biofuels on the basis of their net contribution to climate protection.

In 2009 Germany was the first member state to transpose the European sustainability requirements for biofuels and liquid biomass into German law. The German parliament (Bundestag) in 2009 also decided to reduce the total biofuel quota from 6.25% by energy content to 5.25% retroactively to January 1, 2009, scheduled to increase to 6.25% for the period from 2010 to 2014.

In June 2010 The European Commission published two Communications and a Decision today laying down the requirements for certification of biofuels and bioenergy from vegetable oils. In future, sustainability of the cultivation and manufacture of biofuels and vegetable oils will have to be proven with the aid of certification systems. Only then will it be possible to count them towards the biofuel quota and to support them under the Renewable Energy Sources Act (EEG). For example, cultivation of biomass for biofuels and vegetable oils that involves converting areas with high carbons stocks and a high level of biodiversity is not permitted. Protected areas include nature conservation areas, virgin forests, forests, wetlands and grasslands. Furthermore, proof is required that biofuels and vegetable oils deliver greenhouse gas savings of at least 35% in comparison with fossil fuels. Germany is a pioneer in implementing sustainability certification. The Federal Office for Agriculture and Food (BLE) is responsible for approving certification systems.

The introduction of the E10 at the beginning of 2011 has caused significant uncertainty amongst motorists as German consumers have largely rejected the fuel at filling stations, citing concerns that it may cause damage to car engines. The fuel’s unpopularity has caused shortages of premium gasoline in some stations. Since 1 January 2011, the effective date of the Biofuel Sustainability Ordinance in Germany, the only biodiesel feedstock materials that have been used are those that could be demonstrated to be sustainable.  The authorities have established certain documentation obligations regarding the use of biodiesel, including the demonstration of sustainability and compliance with quality requirements laid down in the 'biodiesel norm' DIN EN 14214, which biodiesel that is used as a blend with diesel must also meet.

The Anual Production capacity for biodiesel was around 5 million tonnes at the beginning of 2010. 80 per cent of the biodiesel produced in 2010, was based on rapeseed oil. In Germany, 2010 ethanol production reached 752 million liters, up from 749 million liters in 2009. Production is currently limited by total installed capacity so requires more investment in production in order to increase its supply availability. The share of biofuels in total German consumption diminished from 7,2% in 2008 to (5,5%) in 2009 and stagnated in 2010. The legally binding quota for Germany was 5,5% for 2009 and at 6,25% for the years 2010-2014.The growing taxation of pure Biodiesel (18ct/l since 2009) is blamed by the VDB for the decline in B100 sales from 1,84 million tones in  2007 to 1,17 million tones in 2009. In 2010 the market for pure biodiesel collapsed completely (0,3 million tones). The number of filling stations selling B100 declined from 1900 to less than 200. In 2010 only 53 of the installed production capacity was operational. Half of the 49 biodiesel plants in Germany lay idle or went bust. On the other hand biodiesel consumption increased thanks to the 7% diesel blending (B7). This however could not compensate the drop in the B100 market.

In contrast to biodiesel, bioethanol (E85) is exempt from taxation until 2015.

Energy taxes for pure biofuels (biodiesel; B100  (in cent/liter)
2008: 14,9
2009: 18,3
2010: 18,6
2011: 18,6
2012: 18,6
2013: under discussion

Energy taxes for pure biofuels (vegetable oils) (in cent/liter)

2008: 9,9
2009: 18,2
2010: 18,5
2011: 18,5
2012: 18,5
2013: under discussion

Future programme changes expected
See text and tables above.

Sources

Biofuels International 2011: E10 causes disruption at Germany's petrol stations, Biofuels International, March 2011, page 10.
http://www.biofuels-news.com/industry_news.php?item_id=3348 , (sourced March 2011).

BMU: Ordinance on requirements pertaining to sustainable production of bioliquids for electricity production, available at http://www.erneuerbare-energien.de/inhalt/44655/40712/, (sourced June 2011). Legally non-binding English translation English available at http://www.erneuerbare-energien.de/files/english/pdf/application/pdf/nachv_verordnung_en_bf.pdf, (sourced June 2011).

BMU 2010: Minister Norbert Röttgen welcomes certifcation of biofuels and liquid biomass for electricity production, press release BMU, 10 June 2010,
http://www.erneuerbare-energien.de/inhalt/46118/4593

EurObserv'ER Biofuels Barometer, July 2010

ELOBIO, Inventory of biofuel policy measures and their impact on the market, September 2008, http://www.elobio.eu/publications

Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC (Entry into force on June 25th, 2009), download from http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32009L0028:EN:NOT 

The National Renewable Energy Action Plans (NREAPs) are all published on the Transparency Platform on Renewable Energy: http://ec.europa.eu/energy/renewables/transparency_platform/action_plan_en.htm (sourced July - December 2010)

Renewable Energy Projections as Published in the National Renewable Energy Action Plans of the European Member States, http://www.ecn.nl/nreap (sourced December 2010)

UFOP 2010: UFOP-INFORMATION GERMANY'S BIODIESEL SECTOR HAS NOW TO DOCUMENT ITS SUSTAINABILITY http://www.ufop.de/downloads/RZ_UFOP_BiofuelQuota_050510.pdf, (sourced June 2011)

UFOP 2011: Biodieselabsatz 2010 mit 2,6 Millionen Tonnen auf Vorjahresniveau, http://www.ufop.de/4089.php, (sourced March 2011).

VDB 2010: Verband der Deutschen Biokraftstoffindustrie, Politik, Deutschland http://www.biokraftstoffverband.de/de/politik/deutschland.html
sourced June 2011.

VDB 2011:  http://www.biokraftstoffverband.de/downloads/1897/VDB_Facts_Biokraftst.pdf, (sourced March 2011)

Interactive EurObserv’ER Database
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Last update: June 2011


This information can be referenced without permission provided that thesource is mentioned completely and correctly: 'Interactive EurObserv'ER Database, http://www.eurobserv-er.org (June 2011)

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The EurObserv'ER barometer is a project supported by the European Commission within the DG TREN 'Intelligent Energy Europe' programme and by Ademe, the French Environment and Energy management Agency. The EurObserv'ER Barometer is the result of the investigation and research work of its authors. The European Commission is not responsible for any use that may be made of the information contained therein.