• End to biodiesel subsidies in Germany

    Germany’s new “grand coalition” government is to abandon subsidies for biodiesel fuel as part of an environment programme that keeps most of the features of the outgoing red-green coalition.

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    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.