Germany eases crop-based biofuels cap and raises GHG quotas

German lawmakers have agreed to relax restrictions on crop-based biofuels, raising the cap from 4.4% to 5.8% in the medium term. The decision is part of broader efforts to align the country’s transport decarbonisation strategy with European Union climate and renewable energy targets.

The measure is included in the “Second Law on the Further Development of the Greenhouse Gas (GHG) Reduction Quota,” which was adopted by the Bundestag on April 23. The legislation aims to strengthen emissions reduction requirements in the transport sector and adjust Germany’s regulatory framework for renewable fuels.

The reform also introduces several structural changes, including the end of double counting for advanced biofuels, stricter supply chain monitoring, and a narrower list of eligible feedstocks. These measures are intended to improve transparency and ensure more consistent climate impact accounting across the biofuels sector.

The Union for the Promotion of Oil and Protein Crops (UFOP) said the broader policy environment for agricultural biofuels has improved at the EU level. Germany’s Agriculture Ministry has also proposed tax exemptions for farm-based biofuels. UFOP noted that geopolitical instability, including tensions in the Middle East, highlights the vulnerability of global energy supply chains.

However, UFOP cautioned that the new GHG quota levels and proposed tax incentives are unlikely to trigger a sharp expansion in crops such as rapeseed. Instead, they are expected to stabilize the market amid growing competition from electric vehicles and alternative low-emission fuels such as used cooking oil-based biofuels. Germany’s FAME biodiesel capacity is estimated at around 4 million tons, with production at 3.6 million tons and domestic demand at 2.2 million tons in 2025, according to Biofuels International. The bill now moves to the Bundesrat for final approval.

Tags: rapeseed, Germany, biofuel