By: Clark Dolch, Jared Achen

 At First- Biofuels Great Idea  Now- How Great are They?

 Started in 1991  Expansion of the biofuel industry started in 1993  Set aside program in Germany  Another big boost in biofuels was in 1999  High price of diesel  Low price of vegetable oil

Biodiesel Output in Germany and France (1000 metric tons) ** Converted at tons of rapeseed per ton biodiesel Source: UFOP, Prolea Germany Rapeseed Equivalent** FranceRapeseed Equivalent**

 Germany on of the first  Biofuel plants  Exempt from $.47 a liter tax  Farmers  Paid a 45 euro/hectare subsidy  Roughly $27/acre

 June 2006 tax incentive was reexamined  Went to partial tax on pure biofuels  Partial blending did not receive tax breaks  Some mandatory blending  Dampened expansion of biofuel industry

Mandates stated below refer to percent based on energy content not on volume, the difference between the specific and the overall mandates can be filled with any approved biofuel to the liking of the trader. Mandates apply to everybody who sells fuels, not just gas stations. (USDA)

 Being exempt from taxes is what makes biofuel plants make a profit Cost Comparison, Producing Petrodiesel Versus Biodiesel Euros/1000 litersPetroDieselRapeseed Methyl-Ester Retail Price Including Value Added Tax Value Added Tax(111)(101) Retail Price Before Value Added Tax Cost of Production(225)(530) Mineral Oil and Ecological Taxes (440)( 0) Return Before Distribution and Marketing 27102

 Government Subsidy  Subsidies do not help environment  Just wasting money?  Impact on environment  Decline greenhouse gas emissions?

 Biofuel causes increase in food and beer prices  Barley fields transferred to biofuel production crops  Angered Germans and Bavarians

 Biofuel industry not sustainable  Without exemptions there would be no industry  New criteria  If producers can prove their product helps the environment, it is sustainable because it does help the environment  Harder for producers to make a profit with the new criteria