Germany Undermines Biodiesel Industry; Facilites to Shut Down
The controversy over biodiesel and biofuels is coming to a head, and in Germany, the biodiesel industry is feeling the effects of a government that fears increasing food prices are a result of increased ratios of biofuel in the nation’s petrol supply. To counter the ill effects of more crops going into automobiles rather than humans, Germany has passed laws to increase the taxes on biofuels in addition to setting a lower standard for mixing biofuels into traditional fossil-based fuels. Taxes to supposedly even out the playing field and make biofuels more prohibitively expensive, and lower standards in the mix ratio to ensure that farmers will still grow food crops. The result could be that smaller biofuel firms will have to close their doors.
The problem is that in Germany there are small firms that make biodiesel, and up until recently, those businesses were doing quite well. Germans wanted to reduce their carbon footprint and carbon emissions, green industry was ready to jump in to provide a product and a service, and the German government thought that biofuels were going to be the next big thing that could save the planet.
But then reality sunk in. More and more crops were going to biofuel processors rather than food processors and markets. Food prices started going up, going up so much and so quickly that parts of the world saw rioting in the streets due to the increased price of rice and wheat. It’s simple economics. Even is demand were to remain steady, if the supply is reduced, prices will go up to reflect the now-increased demand. The equation is always balanced, so if supply goes down, demand goes up. Higher demand means that people will pay more for it, whether it is a luxury item or a staple.
And of course, there is the whole matter of whether or not certain crops used for biofuels actually create more carbon than the carbon emissions they may or may not be preventing. And then you have the whole issue over deforestation in certain parts of the world as more and more people are looking to plant things that can be sold to biofuel processors, like palm and soybeans.
Germany, biofuel, biodiesel, taxes, industry, food, crops, sustainable, food shortages, riots, economics, agriculture, carbon, emissions
February 26th, 2009 at 11:39 pm
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