Transport policy | More biofuel instead of a tank discount?

Despite the government discount, refueling remains an expensive affair. Photo: Unsplash/Getty Images The fuel discount has been in effect again in Germany since Thursday. This time, the state is waiving energy and sales taxes on the sale of gasoline and diesel for three months. The price should mathematically fall by almost 17 cents per liter. The tax losses are estimated at almost 2.8 billion euros.

The discount of the same amount had already existed in Germany for two months in May and June - at the time also a reaction to the Iran-Hormuz crisis and the associated increase in oil prices. With this fiscal instrument, Germany was in line with the European trend. More than a third of the 27 EU states responded with tax cuts, as a study by the Fraunhofer Institute for Systems and Innovation Research in Karlsruhe shows. Not everywhere in the EU, however, refueling itself was artificially cheapened. According to the study, one in four countries has resorted to subsidies such as promoting local public transport. But there were also targeted income support for vulnerable groups, measures for energy efficiency and renovation, and price caps. The 27 EU states spent more than eleven billion euros on all measures together by June. Measured in terms of gross domestic product, the fiscal burden in Germany was significantly lower than the European average: 0.04 versus 0.13 percent.

The Fraunhofer study does not list another possible measure because it was not considered in the spring. Only now has EU Commission President Ursula von der Leyen suggested that when revising European fuel rules, it should be examined whether petrol with an ethanol content of up to 20 percent (E20) can be approved. This emerges from a letter from der Leyen to the three CDU MEPs Peter Liese, Jens Gieseke and Norbert Lins. They had previously demanded that the EU Commission submit a proposal to amend the corresponding appendix to the Fuel Quality Directive in 2026 in order to legally enable the use of E20. According to parliamentarians, rapid approval could reduce dependence on fossil imports and also reduce CO2 emissions from large car fleets.

The introduction of E20 is also supported by the largest German producer of biofuel, Verbio SE based in Leipzig. The company emphasizes that E10, which has been approved so far, has been the cheapest liquid fuel at Europe's filling stations for months and its market share is growing. If the proportion of biofuel were doubled, the price of fuel could fall by a further seven to eight cents per liter, says Verbio boss Claus Sauter, quantifying the expected effect. This could result in a price advantage of 14 to 16 cents per liter compared to regular gasoline.

For Sauter, Germany would also be following a global trend with E20. In India, 20 percent bioethanol is already mixed into gasoline and E30 is considered the next expansion stage there. For him, the fact that higher admixtures have a price-dampening effect is particularly evident in the USA. There, E15 is by far the cheapest liquid fuel at the gas station today.

The Verbio boss sees no problem with the availability of biomass to be able to produce more bioethanol. There is enough ethanol available globally and more could easily be imported. But ethanol production could also be expanded in this country. But nobody in Germany and Europe wants to invest in new systems anymore because biomass unfairly has a negative image.

More biofuel would not solve the fairness problem of the fuel discount.

Green European politicians, however, are critical of the demand for E20. Michael Bloss calculates that just to replace 20 percent of the amount of gasoline currently sold in this country, it would require a cultivated area half the size of Germany. “Our country cannot afford that, and so we end up fueling the deforestation of the rainforest,” emphasizes the MEP. Instead of investing millions in artificially extending the life of combustion engines, we must finally catch up with e-mobility.

The German Environmental Aid (DUH) also rejects Europe-wide approval of E20. Environmentalists point out that more than 90 percent of biogenic ethanol in Germany comes from food and animal feed such as corn, wheat and sugar cane. The cultivation of food and fodder crops for fuel would only increase global land consumption - with serious consequences for the climate and for food security.

With their demand for an EU-wide introduction of E20, the Union politicians have allowed themselves to be harnessed to the cart of the biofuel lobby, criticizes DUH managing director Jürgen Resch. »The call for higher blending quotas for ethanol is based purely on economic considerations. This would not help the climate and the protection of resources.«

More biofuel would not solve the fairness problem of the fuel discount: high-earning, frequent drivers with large cars are significantly more relieved than the happy-to-work nurse in the country in her small car.

The Fraunhofer study therefore recommends moving away from blanket relief measures to deal with future crises. Instead of artificially weakening the price signal, incentives to reduce demand in the short term should be maintained, the authors emphasize. In the medium and long term, it is important to focus the measures more closely on the transformation of the system - with goals such as reducing energy demand and increasing electrification.

The study also advocates targeted use of budget funds for vulnerable households or other vulnerable groups. Germany should therefore build a permanent digital administrative infrastructure for the automated determination of need, analogous to models in France, Belgium or Spain. This would make it possible to design future relief in the event of a crisis in a socially just, fiscally efficient and without loss of time, according to the study. Because the next oil price crisis is definitely coming.

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