There are two types of biofuel – biodiesel, which is made from plant oils, and bioethanol made by fermenting grains, sugar, corn or wheat. Unlike fossil fuels, biofuels are ‘carbon neutral’ because the CO2 they produce when burnt is absorbed by the crops used to make them.
Professor Bernd Gottschalk, president of the German Association of the Automotive Industry (VDA), said: ‘Those who want to see rapid implementation must not put any stumbling blocks in the form of taxation in the way of biofuels.
‘Reliable long-term background conditions must be created so that it pays consumers to fill up with this fuel and future investments in research and development will also pay off.’
Gottschalk said any tax disadvantages introduced for the fuel would ‘put them out of the running’. Speaking as part of International Green Week in Berlin, he added: ‘We are calling on the German Federal Government to maintain the tax-free status of biofuels.’