Biofuel industry calls on German government to delay rule allowing coprocessed HVO to meet GHG-reduction obligations

The Association of German Biofuel Producers (VDB) announced March 11 that it is calling for a delay in the German federal government’s approval of hydrotreated vegetable oil (HVO) coprocessed with petroleum in a refinery to help meet greenhouse-gas (GHG) emissions-reduction obligations, an allowance introduced by the federal ministry of the environment through an amendment to the 37th federal emissions-control ordinance.

According to VDB, the German federal parliament (Bundestag) is expected to comment on the matter March 14.

The association said the allowance would be “an aberration in terms of industrial and climate policy.”

The change allows biofuel to be produced directly in the oil refinery, so-called “co-HVO.” 

Previously in Germany, this was only permitted in separate standalone systems “at a distance from the refinery.”  

A prerequisite to the new rule set to go into effect in Germany, according to VDB, is that the co-HVO must be made from advanced residues and waste materials. 

“With this new regulation, the environment ministry is strengthening the economic power of the oil companies and weakening medium-sized businesses and agriculture in Germany,” said Elmar Baumann, VDB’s managing director. “The ministry of the environment wants to approve co-HVO before the weaknesses in certification when importing advanced biofuels, which have been apparent since the beginning of 2023, are eliminated. In addition, the actual proportion of co-HVO in diesel cannot currently be analyzed in a court-proof manner.”

Advanced biofuels made from waste and residues are counted twice towards the GHG quota.

Due to the double counting, conventional biodiesel and bioethanol are displaced. 

According to VDB calculations, this actually increases GHG emissions and will lead to additional emissions of over 20 million tons of CO2 in road traffic by 2030. 

“Before approving co-HVO, the federal government must tighten sustainability certification and increase quotas to exclude fraud and displacement effects,” Baumann said. “Consequently, under no circumstances can co-HVO be approved now. The regulation regulates other issues that are important for the energy transition. But these would not be affected by the postponement [of] co-HVO [approval].”

The petroleum industry is already exceeding the GHG quota, according to VDB. 

“With co-HVO, another option for fulfillment is added,” the organization stated. “As a result, further alternatives to fossil fuels such as green hydrogen and eFuels will no longer be developed further because they are not needed to meet the GHG quota.” 

Baumann said, “We are calling on the [ministry of the environment] to increase the GHG quota in 2024. Because co-HVO is intended to allow another fulfillment option. It would be hard to understand if the federal government allowed more options but left the quota unchanged.”