Germany's ruling coalition has agreed to introduce compulsory quotas of biofuels to be mixed with fossil fuels by refiners from the start of 2007.
A key beneficiary is likely to be Irish company NTR, whose biofuels arm, Bioverda, is completing the construction of its first biofuels plant in Germany. Bioverda plans to process rapeseed to produce biodiesel, one of the fuels that is the subject of the quota that the German government plans to introduce.
The German finance ministry said the government's plan would compel German oil refineries to blend 2 per cent biofuel content in petrol until 2009, and 4.4 per cent biodiesel content on conventional diesel. In March, the ministry had indicated the blending quota on diesel fuel would be as high as 5.75 per cent.
The quotas will be tradeable, meaning oil refineries which voluntarily use more than the minimum amount of biofuels will be able to sell the surplus quota to those that undershoot the target.
Finance minister Peer Steinbrueck said: "This ensures that biofuels will play a significant role in Germany's mineral oil market in future," he said.
In March, Germany's cabinet approved plans to end special tax breaks for biodiesel, which foresaw a 10 cent tax per litre of the fuel sold at petrol stations and a 15 cent tax per litre on biodiesel used for blending at refineries.
