Corn, soy are not the only way for Germany to cut CO2 emissions from fuels -ministry

Verbio SE

03/05/2022 16:30

By Zuzanna  Szymanska
    FRANKFURT, May 3 (Reuters) - Using less grain and vegetable
oil in biofuels is not the only option for Germany to cut CO2
emissions, its environment ministry said on Tuesday as the war
in Ukraine has spurred Berlin to speed up plans to cap fuel
production from food.
    The European Union has agreed on a 7% cap for food-based
biofuels. Germany, which is the European Union's biggest
rapeseed producer, has set out to reduce that figure further -
most recently to 4.4% - and now looks to go even lower, with the
agriculture ministry saying it is working on new legislation to
achieve this.
    Ukraine is one of Europe's main agricultural exporters and
the war there has disrupted supplies and prompted Germany to
move more quickly to reduce its use of grain and vegetable oils
in biofuels. 
    "Corn, rapeseed or soy are not the only way. Fuel makers can
use synthetic and waste-based biofuels, electricity and green
hydrogen," a ministry spokesperson said, commenting on a media
report that Germany would cap production of agricultural fuels.
    On Friday, German paper Augsburger Allgemeine Zeitung (AAZ)
had reported that Environment Minister Steffi Lemke was working
with the Agriculture Ministry on such a limit as "agricultural
land is needed for food, as the war in Ukraine dramatically
shows us."
    The move comes after Germany decided to stop subsidies for
palm oil as a fuel component from 2023, though the European
Union will continue to permit the additive until 2030.
    The spokesperson said Lemke's plans to further limit use of
food products in biofuels was a "logical next step" but declined
to give more details on the scope and timeline of the proposed
changes.
    The AAZ report has had a major impact on several markets,
including leading to a sharp decline in EU rapeseed futures and
driving down the share price of German bioenergy company Verbio
 VBKG.DE .
    However, allowing fuel production from food and feed would
help companies meet environment targets only in the short term,
the spokesperson said.
    "Expanding the production of biofuels from food and feed
crops would be detrimental to nature. Forests would have to be
cleared or moors drained in order to create new cultivation
areas for more fuel," he said.
    This was already an issue before the war in Ukraine, the
spokesperson added.
    He also said most of food and feed used as fuel has to be
imported, which puts additional pressure on the already strained
global markets and leads to increasing prices in all countries,
including Germany.
    

 (Reporting by Zuzanna Szymanska, Editing by Miranda Murray and
Susan Fenton)
 ((zuzanna.szymanska@thomsonreuters.com; +49 30 4036 18603;))