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German Government Backtracks on Raising Biofuel Content in Gasoline
4 Apr 08
The German government has halted plans to increase the bioethanol blend in gasoline as the future prospects for the fuel type recede.
Global Insight Perspective | | Significance | German Environment Minister Sigmar Gabriel has said that the government has abandoned plans to raise the compulsory bioethanol blend in conventional gasoline to 10% by 2010. | Implications | The government claims that it has made this decision as 3 million passenger cars on Germany's road would otherwise be forced to use more expensive fuel grades. | Outlook | Although short-term political expediency may be the principal factor behind the German government's decision, it is also further evidence that a backlash against bioethenol is gathering momentum, and that the fuel type is no ”magic bullet” solution to the environmental pressures on the automotive industry. |
German Government Backtracks on Bioethanol German Environment Minister Sigmar Gabriel has said that his government has backtracked on its plans to increase the biofuel content in conventional gasoline (petrol) to 10%, up from the present level of 5%, according to a Reuters report. There has been consistent criticism of the government's plans in Germany in recent months from rival political parties and consumer groups, which voiced their concern that older models in the German car parc could be damaged by the shift to a higher biofuel content. According to Gabriel, there are 3 million passenger cars on German roads that could potentially be damaged by running on fuel with a 10% biofuel content. Owners of those cars would have had to switch to more expensive, higher-octane gasoline as the plan was to increase the biofuel content to 10% across the country's entire production of standard-grade 95 RON gasoline. Therefore, Germany's poorer motorists would have ended up having to pay more for fuel than more affluent consumers who could afford the latest passenger cars designed to cope with 10% ethanol-blend gasoline. Commenting on the decision, Gabriel said, "Our environmental policy does not want to be responsible for driving millions of car drivers to expensive Super Plus petrol pumps." There remains serious disagreement over the number of cars on German roads that would not be able to cope with such a shift. The country's biggest motoring organisation, the politically powerful ADAC, has said that 3 million vehicles would be affected by the change—a figure that has seemingly been accepted by the government. The German automakers’ association, the VDA, however, has said that the number is nearer 360,000 cars, and that it has completed all necessary work to ensure that its models could cope with the change; the organisation released a statement this week saying, "The German automotive industry has done its homework and stuck to its word." Outlook and Implications Irrespective of the economic and political arguments, it had been hoped that a shift to increased use of biofuels would help the case of the German automotive industry in its efforts to persuade the European Union (EU) to introduce less stringent carbon dioxide (CO2) emissions regulations, or at least relax the timetable regarding such changes (see Europe: 31 March 2008: European Commission and Parliament Agree to Year-End Deadline for CO2 Negotiations—Report). However, the decision of the German government is another blow to the biofuel lobby, which has seen its case undermined in recent months by a number of scientific studies and reports. The main concern is that valuable land is being used for producing crops for bioethanol at a time when global food prices are rising. There are also concerns that the environmental case for bioethanol has been overstated, with rainforests being cut down in Asia to produce bioethanol and biodiesel crops. Scientists are now claiming that although the fuels themselves emit fewer greenhouse gases than their fossil-fuel counterparts, they all have higher costs in terms of biodiversity loss and destruction of farmland. As a result, the EU has recently agreed to re-examine its policy on biofuels, which calls for 10% of Europe's road fuel to come from biological sources by 2020, exactly the policy that Germany was looking to pursue. The German government's U-turn on this issue may be a sign that the tide is turning against biofuels and that more efficient use of conventional fuel sources, coupled with further advances in hybrid and fuel-cell powertrains, will be the future of the European automotive industry.
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