13 November 2001
Tax cuts for German green fuel

By Tom Allen-Stevens

GERMAN farm contractors have been promised more government help to convert to green fuels.

The moves were announced on Monday (12 November) at the Agritechnica machinery event in Hanover.

Programmes to help German farmers use biodiesel, a fuel refined from oilseed rape, and green lubricant oils would come on top of its current tax-free status.

We are very committed to renewable energy products, said Dr Gerald Thalheim, parliamentary secretary with the German food and farming ministry.

If you use hydraulic oils and lubricants of plant origin then this will be supported by the government.

We will also be introducing comprehensive programmes to encourage the use of plant-based fuels in tractors.

Earlier the governments fuel tax regime had come under attack at the European Private Contractors Congress at the machinery event in Hanover.

Two-thirds of the current conventional diesel price, about DM2.00ppl (0.67ppl), is tax, which is seen as a tax on German farm contractors.

Its very hard to make a living from farming here with rocketing energy costs, said Konrad Schindehutte, the president of the contractors association.

The average contractor has costs of around DM 50,000 (16,500) more than his equivalent in France.

The minister countered this, saying the government is pushing for tax harmonisation on fuel across the whole of Europe.

Since the German government, a coalition with the countrys Green party, dropped the tax on biodiesel, the area of rapeseed grown for oil has rocketed.

Currently 1% of all diesel comes from rape, amounting to around 225,000ha. Projections suggest this will rise to over one million ha within five years.

The government has also funded the building of one of the countrys five green fuel refineries.

But farmers complain that biodiesel, available only at fuel stations at a slight discount to conventional fuel, cannot be bought in bulk.

Biofuels attracted a small concession at the last budget in the UK, but not enough to bring it in line with conventional fuel, argue environmentalists.

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