EU biodiesel output growth slowed in 2007

A worker installs a biodiesel producing machine in Petchaburi province, 123 km (76 miles) south of Bangkok, January 14, 2008. Growth of the European Union's biodiesel output slowed to not more than 10 percent in 2007 due to increasing competition from the U.S biodiesel, a senior European Biodiesel Board (EBB) official said on Friday.

VERONA, Italy (Reuters) - Growth of the European Union's biodiesel output slowed to not more than 10 percent in 2007 due to increasing competition from the U.S biodiesel, a senior European Biodiesel Board (EBB) official said on Friday.

"If we look at 2007 production, we expect an increase of not more than 10 percent compared to the previous year," EBB Secretary General Raffaello Garofalo told Reuters on the sidelines of a bioenergy conference in Verona, northern Italy.

"Growth in 2007 was the worst in the past 10 years," Garofalo said.

EU biodiesel output surged 54 percent to 4.89 million tons in 2006, according to the EBB data.

Garofalo said the EU output slowdown in 2007 was due to increasing imports of cheap subsidized U.S biodiesel and also the lack of political support for the green fuel in some EU states.

EBB has strongly criticized what it sees as unfair subsidies for U.S. biodiesel, saying it creates dumping competition in Europe and threatens to put many EU producers out of business.

Garofalo said EU biodiesel capacity was only 50 percent used in 2007.

He said it was too early to give forecasts for 2008 output but he described the situation in the EU, especially in Germany, as bad at the beginning of this year. However, he expected some output increase in Italy and Spain this year.

(Reporting by Svetlana Kovalyova, Editing by Peter Blackburn)