A New Approach to Biofuels Policy Is Essential 

BBE Chair Mortler Presents the Biofuels Sector’s Concern 

Berlin: In the run-up to the 22nd International Conference on Renewable Mobility, Marlene Mortler, Chair of the German Bioenergy Association (BBE), presented the current challenges and concerns facing the biofuels industry in the upcoming legislative period. “A completely new approach to biofuels policy is essential. We must at last receive reliable support from the world of politics again, instead of politicians simply watching from the sidelines, procrastinating, and hesitating. For over two years, the industry has been confronted with fraudulent biodiesel imports from China and has also been forced to cope with the consequences of significant shortcomings on the part of the German Ministry for the Environment and the Federal Environment Agency in monitoring the eligibility of greenhouse gas quota credits for climate change mitigation projects in China. National implementation of the EU Renewable Energy Directive is supposed to be completed by May; if that deadline is to be met, submission of the relevant regulatory proposals is long overdue. In this context, there are also grounds for concern about the lack of ambition displayed by what remains of the coalition currently still in office, which lacks a reliable overall strategy for renewable alternative fuels and drives in the transport sector. For years, implementation of urgently needed transport-sector defossilisation has been very slow due to procrastination and an inability to take action at the national and EU level. Examples include the unambitious targets for renewable fuels, delays in adopting legislative provisions, the European Commission’s botched launch of the Union database, which currently affects the entire supply chain, or negotiations at EU level on the Energy Taxation Directive, which have been dragging on for years”, as Mortler commented in her opening statement.

Mortler levelled harsh criticism at the current German government for being slow to combat the underlying causes of fraudulent imports of purportedly advanced biodiesel from China that were discovered over two years ago. She urged the federal government to take effective action; as she explained, “The German biofuels industry is under unprecedented pressure due to the drastic collapse of greenhouse gas quota prices, which is also affecting prices for domestic sustainable biofuels. Rather than simply standing and watching our country’s biofuel producers face economic ruin while climate change mitigation in the transport sector grinds to a halt, the German government must take the bull by the horns and introduce an official approval procedure for advanced biofuels as promptly as possible. Misgivings have instead brought the industry to a virtual standstill, creating the impression that the government is quite willing to accept the damage done to the sector.” Mortler criticised recent measures adopted by the German government that only address the symptoms rather than the causes, such as the amendments to the 38th Ordinance on the Implementation of the Federal Immission Control Act (BImSchV) concerning suspension of scope to transfer greenhouse gas reduction quotas to 2025 and 2026. 

Mortler also criticised the excessively tardy and over-hesitant response from the government and the Federal Environment Agency (UBA) to the fraud cases that have come to light involving alleged reductions in greenhouse gas emissions during oil production (Upstream Emission Reductions – UER) that have been offset against the German greenhouse gas reduction quota: “The questionable UER projects have still not been reviewed and full details of the fraud cases have not been identified, let alone compensated for by the Chinese fake projects that demonstrably did not attain the claimed climate change mitigation. Environment Minister Steffi Lemke’s argument that consumers have not suffered any damage as the fraudulent climate projects were cheaper than non-counterfeit compliance options such as sustainable biofuels or e-mobility is a slap in the face for the climate change mitigation industry and testifies to a crude understanding of the law and of her office. Minister Lemke and UBA President Messner must address the issue of their personal responsibility in this multibillion-Euro environmental scandal.”

In view of the shortfall in climate change mitigation in the transport sector and the forthcoming general election, the BBE Chair advocated adopting ambitious greenhouse gas reduction quotas when implementing the EU’s Renewable Energy Directive (RED III): “With a view to overcoming the shortfall in climate change mitigation and tapping into the full potential of all renewable options, the greenhouse gas reduction quota must be raised significantly to at least 37% in 2030 and extended to 2040 to provide long-term planning security. Currently, Germany is squandering considerable potential for climate change mitigation by setting an artificially low cap on credits for sustainable biofuels from cultivated biomass. When implementing RED III, this cap should therefore be increased to 5.3%, as provided for in European legislation. Finally, to avoid cannibalisation effects between the various compliance options for the quota, an automatic quota adjustment mechanism must be introduced to allow for annual increases in the greenhouse gas reduction quota if there is unexpectedly strong market uptake of e-fuels or advanced biofuels.”

While expressing support in principle for the shared European database for sustainability certificates, known as the Union database (UDB), Mortler underscored that ensuring the database is functioning well is a vital step before use becomes mandatory. “When it finally starts running properly, the UDB can constitute an important step towards market transparency and fraud avoidance. Ensuring that companies will only have to enter their data into one database is also important, as is avoiding twofold bureaucratic effort to run both a national and a European database”, Mortler commented. She added that in the run-up to adoption, economic operators were assured that this would be the case, as enshrined in EU law, but that this has not yet been put into practice.

Addressing the planned recast of the Energy Taxation Directive as part of the EU’s Green Deal, the BBE Chair insisted that sustainable biofuels must be incorporated into this legislation permanently at a reduced minimum energy tax rate. As Mortler explained, “In order to ensure renewable energies are treated more favourably than fossil energy sources in the long term, it is crucial to stipulate a long-term reduced minimum tax rate for sustainable biofuels. Adding a time limit would send the wrong signal to markets, hinder new investments in sustainable biofuels, such as biomethane, biodiesel, bioethanol or HVO, and devalue existing plants.” Sustainable, climate-neutral fuels must also play a role again in the discussion on CO2 fleet limits for cars.

Industry representatives and decision-makers from the worlds of politics, research, and business will discuss these and many other relevant issues related to biofuels, biomethane, and e-fuels. The complete programme and information on registering for the 22nd International Conference on Renewable Mobility “Fuels of the Future 2025” on 20th and 21st January 2025 in the CityCube in Berlin is available at www.fuels-of-the-future.com/en.