German plans to end crop-based biofuels would hit farmers, cut rapeseed output

HAMBURG (Reuters) - Any German government plans to stop crop-based biofuel production would severely hit farmers and cut rapeseed output, Thomas Mielke, CEO of Hamburg-based oilseeds analysts Oil World said on Wednesday.

Smaller crushings of oilseeds in Germany would lead to a widening of the domestic protein deficit for animal feed and mean increased imports of soybeans and soymeal, Mielke said.

German environment minister Steffi Lemke is proposing an end to production of crop-based biofuels in stages by 2030.

The country's programme to cut greenhouse gases includes the use of blending biofuels including biodiesel and bioethanol with fossil diesel and gasoline to reduce road vehicles emissions.

Oil companies have a greenhouse gas reduction target which they can partly fulfil with biodiesel, which is often made from rapeseed oil or waste vegetable oils and bioethanol often produced from grains.

About half of Germany's rapeseed crop, which in 2022 totalled 3.7 million tonnes, is used to produce biodiesel.

About 3 million tonnes of biodiesel is blended with fossil diesel in Germany each year, with the animal feed rapeseed meal also produced from rapeseed crushings.

“This proposal could generate changes in trade flows with more German rapeseed oil going for export,” Mielke said. “There would also be a reduction in rapeseed cultivation by farmers.”

"Such a drastic policy change would of course also reduce import demand, intensify the competition with producers in the exporting countries and reduce prices," he said.

Lemke, a member of the Green party in Germany's ruling coalition, said she wants to intensify the use of biofuels produced from garbage, wastes and used edible oil.

"I do not think that it is possible to replace crop-based biofuels in this way because there is not enough waste available to produce the volumes needed," Mielke said.

(Reporting by Michael Hogan, editing by Alexander Smith)