Germany's biodiesel industry is working at around 50 percent capacity, about 10 percent less than in April as taxes on biofuels hit sales, the head of renewable fuels industry association BBK said on Wednesday.
"Currently about 50 percent of our annual biodiesel production capacity of about four million tonnes is idle," association president Peter Schrumhe said.
"About two million German trucks are currently filling up with cheaper fuel when they travel abroad."
The fall in biodiesel sales this year, largely because of Germany's taxes on green fuels, meant many producers were considering closing production or selling their refineries to foreign buyers, especially as the tax was scheduled to rise to 14 cents a litre in 2008.
At a time when the European Union wants to increase biofuel use to stop global warming, Germany in late 2006 started taxing biodiesel as the government said it could not afford to lose the large tax revenue from fossil diesel sales.
That meant biodiesel had lost its price advantage at a time of weak crude oil prices, Schrum said. The production cut meant Germany was losing the opportunity to cut carbon dioxide emissions by five million tonnes a year, he said. The association continued to lobby for a tax review, but the finance ministry was unwilling to change, he said.