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

A farmer sows corn on a field at a dry day in Frauwuellesheim near Dueren, Germany, April 21, 2020. Picture taken with a drone. REUTERS/Stephane Nitschke

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

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