Germany eases crop-based biofuels cap and raises GHG quotas

German lawmakers have agreed to ease the cap on crop-based biofuels, lifting it from 4.4% to 5.8% in the medium term, Biofuels International wrote, citing a report by Germany’s Union for the Promotion of Oil and Protein Crops (UFOP).

The move followed earlier legislative changes, including the end of double‑counting for advanced biofuels, stricter supply‑chain controls and a narrower feedstock list, the 6 May report said.

The ‘Second Law on the Further Development of the Greenhouse Gas (GHG) Reduction Quota’ bill – adopted by the Bundestag on 23 April – aims to further align Germany’s transport decarbonisation framework with EU renewable energy and climate targets and would lead to sharper GHG reduction quotas for road transport, according to Biofuels International.

UFOP noted that the broader policy environment for crop‑based biofuels had been improved at European Union (EU) level, while Germany’s Agriculture Ministry had proposed a tax exemption for agricultural biofuels.

“The conflict in the Middle East currently demonstrates how quickly and effectively supply chains once believed to be secure can be disrupted,” UFOP said on 4 May.

However, the organisation warned against over‑optimism.

“The GHG quota levels and the proposed tax exemption will not prompt a sharp increase in crops like rapeseed, but help stabilise the market,” UFOP told S&P Global Energy.

UFOP also highlighted competition from electric vehicles, other biofuels with higher GHG efficiency such as used cooking oil (UCO) and the potential impact of E20 petrol blends on biodiesel demand.

According to the Biofuels International report, Germany’s FAME [biodiesel] capacity totals around 4M tonnes, with 3.6M tonnes produced and 2025 demand at 2.2M tonnes.

While exports remained important, growers preferred the domestic market, the report said.

Following the bill’s adoption by the Bundestag (Germany’s federal parliament and main legislative body), the bill will go to the Bundesrat, which represents German states, for approval.

This article has been republished from The Oils & Fats International.