By: Clark Dolch, Jared Achen

At First- Biofuels Great Idea Now- How Great are They?

Started in 1991 Expansion of the biofuel industry

started in 1993 Set aside program in Germany

Another big boost in biofuels was in 1999 High price of diesel Low price of vegetable oil

Biodiesel Output in Germany and France(1000 metric tons) ** Converted at 2.672 tons of rapeseed per ton biodiesel Source: UFOP, Prolea

  Germany Rapeseed Equivalent**

France Rapeseed Equivalent**

2002 550 1469 366 978 2001 450 1202 318 850 2000 340 908 318 850 1999 130 347 312 834 1998 100 267 219 585 1997 100 267 250 668 1996 60 160 220 588 1995 45 120 155 414 1994 25 67 65 174 1993 10 27 20 53 1992 5 13 0 0 1991 2 5 0 0

Germany on of the first Biofuel plants

Exempt from $ .47 a liter tax Farmers

Paid a 45 euro/hectare subsidy Roughly $27/acre

June 2006 tax incentive was reexamined Went to partial tax on pure biofuels Partial blending did not receive tax breaks Some mandatory blending

Dampened expansion of biofuel industry

Mandates stated below refer to percent based on energy content not onvolume, the difference between the specific and the overall mandates canbe filled with any approved biofuel to the liking of the trader. Mandatesapply to everybody who sells fuels, not just gas stations.

(USDA)

Being exempt from taxes is what makes biofuel plants make a profit

Cost Comparison, Producing Petrodiesel Versus BiodieselEuros/1000 liters PetroDiesel Rapeseed

Methyl-EsterRetail Price Including Value Added Tax

803 733

Value Added Tax (111) (101)Retail Price Before Value Added Tax

692 632

Cost of Production (225) (530)Mineral Oil and Ecological Taxes

(440) (  0)

Return Before Distribution and Marketing

27 102

Government Subsidy Subsidies do not help environment Just wasting money?

Impact on environment Decline greenhouse gas emissions?

Biofuel causes increase in food and beer prices

Barley fields transferred to biofuel production crops

Angered Germans and Bavarians

Biofuel industry not sustainable Without exemptions there would be no

industry New criteria

If producers can prove their product helps the environment, it is sustainable because it does help the environment

Harder for producers to make a profit with the new criteria