VERBIO: Biofuels contribute to climate protection and provide new jobs – Outlook for 2008 confirmed

Zörbig/Leipzig, December 18, 2007 – The Climate Change Conference in Bali has been concluded. The achievements are seen as milestones on the way to the new climate treaty, which shall be finalized in 2009 in Copenhagen and replace Kyoto protocol expiring in 2012.

Zörbig/Leipzig, December 18, 2007 – The Climate Change Conference in Bali has been concluded. The achievements are seen as milestones on the way to the new climate treaty, which shall be finalized in 2009 in Copenhagen and replace Kyoto protocol expiring in 2012. In Bali representatives of the German government have pleaded for an intensification in efforts to protect the climate; however, with the climate package adopted by the cabinet on December 5, 2007, the German government has missed the chance to fulfil its ambitious goal of assuming a leading role in climate protection, according to the management board of VERBIO Vereinigte BioEnergie AG, one of the largest biofuel producers in Europe. "We are disappointed in the German government's biofuel strategy, said Claus Sauter, Chief Executive Officer of VERBIO, and continued: "The suggestion made by the German Social Democratic Party with its total quota of 7 % and a general exemption of public transportation and agriculture from the petroleum tax would have been a sustainable concept for a continuance of the German biodiesel industry which the entire industry sector could have accepted. The general conditions put forth in the proposal could have strengthened the demand for biofuel through the increased and more heavily increasing mixing quotas and as a result ensured the investments made by the industry through higher utilization of the available plants. Even a further tax increase for pure biodiesel (B100) could have been compensated for with a stronger establishment of the market."

With the decision to adhere to the status quo, which means to the further reduction of the tax relief for biofuel and leaving the regulations on admixing unchanged at the end of 2006, the German government blocks the chance for the new biofuel industry in Germany to establish its market. It is to be expected that at the beginning of 2008 more than 50 % of the biodiesel plants will have to be shut down for good since no market will exist. The bioethanol market in Germany will continue to suffer due to insufficient demand and cheap imports from Brazil.

Roadmap biofuel should support middle and long-term climate goals

It remains to be seen to what extent the roadmap adopted in November by the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) and the Federal Ministry of Food, Agriculture and Consumer Protection has positive effects on domestic biofuel production and its suppliers. What should be achieved through this is a stop to the strongly criticized undesirable developments arising from the use of biofuels, for instance, the deforestation of the rain forests in South America and the tropical forests in Asia.

Outlook confirmed

Despite this unsatisfactory decision of the German government, the management board for VERBIO continues to assume that the long-term growth trend in the biofuel market will remain intact in Europe. The management board will further continue to implement measures to strengthen competitiveness in order to profit from an improvement of the biofuel industry's economic situation in 2008.