Developing a sensible biofuels strategy for Germany

Reinhard Schultz from the Social Democratic Party’s (SPD) parliamentary group remains optimistic Germany will continue to develop biofuels despite the government’s recent decision to shelve its E10 project.

Developing a sensible biofuels strategy for Germany
Photo: DPA

Many crocodile tears have been shed over the past week by those who would like to consider the government’s biofuel strategy a failure. But what actually happened?

A technical requirement for regular petrol to contain ten percent ethanol cannot be implemented as planned. The reason? The automobile industry isn’t able to stick to promises made to the government because it wasn’t informed about an agreement for older foreign cars in Germany. That’s regrettable. But is it a catastrophe? No. Ethanol has up till now played a minor role in Germany. The biofuel market runs on diesel. And a biodiesel mix is available in greater quantities than before.

Moreover, the technical aspects of such mixtures have nothing to do with the level of the biofuels quota, which can be fulfilled either through fuel additives or via the straight sale of biofuels. The choice is largely up to petroleum industry. Of course, the big oil companies don’t like to sell pure biofuels. They don’t have the infrastructure to do so. But they could – and legislation specifically allows this – make use of the services of independent midsized petrol stations. The oil firms only need to make up the price difference between “normal” gasoline and diesel. Until greater quantities of biofuels can be added to the mix this method is certainly reasonable demand to place on the petroleum industry.

Naturally, we are also keeping an eye on the global market for biofuels and the raw materials they require. We are aware of the limits to its growth if our biofuel strategy is to remain both sustainable and oriented on meeting climate change goals. But we also see a lot of room to expand the use of biofuels in both Germany and Europe. And that’s exactly what we aim to do.

Parts of the petroleum and automobile industries, and of course Germany’s car lobby ADAC, have publicly made a fool of both the Environment Minister Sigmar Gabriel and the government in the worst possible way – especially since they were the ones directly responsible for the information chaos. But it won’t be much use to them. Germany will continue to pursue a sensible biofuels strategy.

Reinhard Schultz is a member of the Bundestag for the SPD.

Translation by The Local.


Norwegian battery start-up Freyr demands subsidies to complete factory

The Freyr battery start-up has halted construction of its Giga Arctic factory and demanded additional government subsidies, Norway's state broadcaster NRK has reported.

Norwegian battery start-up Freyr demands subsidies to complete factory

Jan Arve Haugan, the company’s operations director, told the broadcaster that the company would not order any more equipment until Norway’s government committed to further subsidies. 

“We are holding back further orders for prefabricated steel and concrete pending clarification on further progress,” he said. “We are keen to move forward, but we have to respect that there is a political process going on, and we have expectations that words will be put into action.” 

Freyr in April 2019 announced its plans to build the 17 billion kroner Giga Arctic in Mo i Rana, and has so far received 4 billion kroner in loans and loan guarantees from the Norwegian government. It has already started construction and hopes to complete the build by 2024-2025. 

Haugan said that the enormous subsidies for green industry in the Inflation Reduction Act voted through in the US in 2022 had changed the playing field for companies like Freyr, meaning Norway would need to increase the level of subsidies if the project was to be viable. 

Freyr in December announced plans for Giga America, a $1.3bn facility which it plans to build in Coweta, Georgia.   

“What the Americans have done, which is completely exceptional, is to provide very solid support for the renewable industry,” Haugen said. “This changes the framework conditions for a company like Freyr, and we have to take that into account.” 

Jan Christian Vestre, Norway’s industry minister, said that the government was looking at what actions to take to counter the impact of the Inflation Reduction Act, but said he was unwilling to get drawn into a subsidy battle with the US. 

“The government is working on how to upgrade our instruments and I hope that we will have further clarifications towards the summer,” he said.

“We are not going to imitate the Americans’ subsidy race. We have never competed in Norway to be the cheapest or most heavily subsidised. We have competed on competence, Norwegian labour, clean and affordable energy and being world champions in high productivity.”