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EU rain forest rules may hit German rapeseed

HAMBURG (Reuters) - German oil mills fear supplies of rapeseed for biodiesel production may be disrupted by new European Union rules requiring feedstocks come from certified sustainable farming, an oilseeds industry leader said on Friday.

Germany will from January 1 2011 impose the EU renewable energy directive, a measure originally aimed at protecting tropical rain forests from being cut down for palm and soyoil production.

But other EU countries will not follow in January, so technically German biodiesel producers may not be able to use rapeseed from other EU countries for biofuels, said Petra Sprick, chief executive of German oil mills association OVID.

“The biggest problem is that Germany is introducing the renewable energy directive virtually alone and most other EU states will not meet the deadline to put it into their national law,” said Sprick.

“This could bring us into difficulties because we could be shut out of the EU internal market and will not be able to buy rapeseed supplies elsewhere in the EU.”

German biodiesel is largely produced from rapeseed oil.

“Germany needs to import about 2 million tonnes of rapeseed annually but suppliers in the EU are not certified so we will not be able to use it for biodiesel output.”

“There is no proven network which is ready to supply imports of certified rapeseed. The supply outlook is a matter of serious concern.”

About 80 percent of Germany’s 5.7 million tonne 2010 rapeseed crop is likely to be certified along with almost all oilmills and the biodiesel producers themselves, she said.

Major efforts are being made to certify about 1,300 trading and storage companies also involved in the rapeseed supply chain.

About 300 of these companies were likely to be certified soon including those involved with handling the main part of the crop.

“This sounds good but in fact the situation is very tight,” Sprick said. “The removal of rapeseed supplies from the EU is a very difficult hurdle for market participants and we do not know it can be overcome.”

NON-CERTIFIED IMPORTS PERMITTED FOR FOOD

Non-certified rapeseed can still be imported for food production as the sustainability directive only covers biofuels.

Some mills may have to change their long-established purchasing patterns, with more rapeseed imported for food and German-produced supplies used for biodiesel.

“The market is rather distorted at the moment and is very nervous,” Sprick said.

The German crop would nominally cover biodiesel demand but supplies were often not at the right place at the right time, creating purchasing and logistics problems.

“All market participants have worked hard to build the structures for this complex new system but we fear that everything will not function without trouble from January 1,” she said.

“It cannot be ruled out that we will not be able to produce the required volumes of certified biodiesel.”

Editing by William Hardy

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