Oil Firms Said to Oppose Biofuel made from Rye
In the next few years 840,000 tonnes of German rye could be used for biofuel production annually, Margit Ziehe, grain purchaser for Mitteldeutsche BioEnergie, Germany's first major bioethanol plant, told a forum at the Agritechnica trade fair.
But oil companies are unwilling to buy the bioethanol produced from rye and are refusing to blend it as an additive in conventional fuel which they are permitted to do, she said.
The international oil majors refining oil in Germany are known to have extensive technical objections to biofuels.
But observers have said oil companies wish to use their own imported fuel ingredients rather than purchasing green additives such as bioethanol.
Mitteldeutsche BioEnergie has capacity to process 240,000 tonnes of rye annually and produce 80,000 tonnes of bioethanol.
This year it was likely to process only about 120,000 tonnes of rye largely because of unwillingness by oil companies to use its bioethanol, Ziehe said.
Next year the company hoped to process 240,000 tonnes of rye after building up specialist marketing channels.
She called on the German government to take action to compel blending of bioethanol in conventional fuels.
"Compulsory blending must come," she told the meeting organised by the German rye promotion association, the Roggen Forum.
Austria had already announced such a move and bioethanol use was very advanced in Scandinavia.
Germany's government has so far declined to make blending compulsory, saying it does not want to force an economic decision on the energy industry.
With the removal of rye from EU intervention subsidies in 2004, rye farmers have been urgently seeking new sales outlets for the grain. Germany harvests just under three million tonnes of rye annually but its mills only need about 900,000 tonnes for bread while about one million tonnes is used for animal feed.
In the past, several hundred thousand tonnes of surplus rye landed in the EU's intervention stocks, its grain mountain, each year.
Ziehe said about half Mitteldeutsche BioEnergie's rye supplies would be from direct contracts with farmers and half from traders. Next year it was expected that farmers would be paid some 84 euros ($98.59) a tonne for good quality rye.