German biodiesel tax break is expiring

While biodiesel is becoming more and more popular with German consumers and production is rising, the tax break for the fuel has expired. Biodiesel was exempt from the 45-euro-cent petroleum tax imposed on petroleum diesel until this Tuesday, when a new energy law took effect reducing the exemption by nine Euro cents. An additional increase of six Euro cents per liter starting in 2008 will reduce the tax benefit for biodiesel completely by 2012. While biodiesel will still be cheaper in the short term, more efficient production methods will be needed to keep the prices below petroleum diesel prices as the tax break is completely phased out. While the Association of the German Biofuel Industry called the plan "death in installments", German environmental groups were less upset about the new legislation. The German Environmental Help Association sees the tax break as a way for generating high profits in the processing chain, which would not be justified. The new law is expected to bring in about 1.6 billion euros in additional revenue.
[Source: Deutsche Welle]