Germany has taken a significant step to support its biodiesel and bioenergy industries after lawmakers approved plans to increase the cap on crop-based biofuels from 4.4 percent to 5.8 percent over the medium term. The move is expected to strengthen demand for domestically produced biofuels, support oilseed growers and contribute to the country’s transport decarbonisation goals.
According to a report by Biofuels International citing the Union for the Promotion of Oil and Protein Crops, the decision follows a series of legislative changes, including the end of double-counting for advanced biofuels, stricter supply-chain monitoring and a narrower list of approved feedstocks, Oil & Fats International reported.
The measure is part of the “Second Law on the Further Development of the Greenhouse Gas Reduction Quota,” adopted by the Bundestag on April 23. The legislation seeks to align Germany’s transport emissions strategy more closely with European Union renewable energy and climate targets while introducing more ambitious greenhouse gas reduction requirements for road transport.
UFOP said the policy environment for crop-based biofuels has improved both in Germany and across the European Union. The organisation also welcomed a proposal from Germany’s Agriculture Ministry to introduce tax exemptions for agricultural biofuels.
The group noted that recent geopolitical tensions in the Middle East have highlighted the importance of strengthening domestic energy sources and reducing dependence on vulnerable supply chains.
Despite the positive policy changes, UFOP said the higher greenhouse gas quotas and proposed tax incentives are unlikely to trigger a major expansion in rapeseed cultivation. Instead, they are expected to provide stability for producers and growers operating in an increasingly competitive market.
The organisation also pointed to challenges facing the biodiesel sector, including competition from electric vehicles, greater use of alternative biofuels made from used cooking oil and the potential impact of wider E20 petrol adoption on biodiesel demand.
Germany currently has biodiesel production capacity of around 4 million tonnes annually, with production estimated at 3.6 million tonnes. Domestic demand in 2025 is projected at 2.2 million tonnes. While exports remain important for the industry, producers continue to favour sales within the domestic market.
Following its approval by the Bundestag, the legislation will now move to the Bundesrat for final review and approval.
