Macroeconomic evaluation of rape cultivation for biodiesel production in Germany

Mar 2002

Biodiesel has been produced for the German market since 1993. The raw material is rapeseed oil that is chemically transesterified. As with other renewable energy sources (RES), the cultivation of RES rape for biodiesel production and the establishment of this economic sector are promoted by governmental supports. Presently there are transesterification plants with a processing capacity of 533 kT of oil in Germany. In addition plants with an additional capacity of 390 kT are under construction. With domestic biodiesel production of the year 2001, about 450 to 500 million litres of fossil diesel, which must be imported or produced from imported crude oil, could be substituted. At the same time, glycerine is produced as a by-product, which is marketed predominantly as distilled glycerine, in pharmaceutical quality. The rapeseeds grown for biodiesel production have not only enlarged the volume of oil mills but have also produced rape meal, a high-quality protein fodder, which substitute as much as 450 kT of imported soy meal. The value-added from the rape biodiesel production chain creates income and consumption demand. The necessary investments in production capacities and logistics have induced a demand for capital goods. The economic output of the rape biodiesel production chain contributes directly and indirectly to additional government revenue. These must be offset with the tax shortfalls arising from the non-taxation of biofuels in Germany and must be taken into consideration in a macroeconomic assessment of biodiesel activity. Summing up the tax return flows and additional social insurance income, the “compensating performance” of the rape biodiesel production chain amounts to 73% and 83% respectively of government revenue shortfalls.

By: Institut für Wirtschaftsforschung (IFO)

 
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