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Non-Tech : $2 or higher gas - Can ethanol make a comeback? -- Ignore unavailable to you. Want to Upgrade?

To: richardred who wrote (2602)	11/15/2007 6:12:19 AM
From: elmatador	Respond to of 2801

German bioethanol firm hit by cheap Brazil imports Reuters Wednesday November 14 2007 By Michael Hogan HAMBURG, Nov 14 (Reuters) - German bioethanol producer Verbio said on Wednesday a combination of cheap imports from Brazil and high grain prices meant commercial production of bioethanol in Germany was hardly possible. Verbio on Wednesday posted a 600,000 euro net loss in January-September 2007 against a 25.7 million euro net profit in the same year-ago period. Nine month 2007 sales fell to 307.1 million euros from 325.7 million euros. Verbio said on Wednesday it had only produced on average about 50 percent of its total 300,000 tonnes annual German bioethanol production capacity in the first nine months of 2007. Bioethanol was also produced at a loss. "Cheap imports from Brazil and high feedstock prices currently mean profitable domestic production is hardly possible," Verbio said in a statement. A Verbio spokesperson told Reuters: "We currently have no major demand for bioethanol and what demand there is can be met by cheap imports from Brazil." "Brazilian bioethanol is currently available in Germany at around 55 cents a litre but we need at least 80 cents a litre to cover our production costs using grain." In September, Verbio had said it was cutting bioethanol production at its 200,000 tonne plant in Schwedt in east Germany because of high grain prices and low bioethanol demand. The spokesperson declined to say how much the Schwedt plant was now working under capacity but it was less than 50 percent. But she said Schwedt will continue some production. The company also has a second bioethanol plant in Zoerbig in east Germany producing about 100,000 tonnes annually which is not affected by the decision to run down output at Schwedt. Verbio has also been hit by rising prices for German grain which it uses as feedstock for both plants. Verbio has successfully tested use of untreated alcohol, sugar syrup and sugar molasses as alternatives feedstocks to the grain currently used. "We may change next year if the demand for bioethanol rises," said the spokeswoman. "The problem is that the major oil companies do not really want to use bioethanol and the compulsory blending quotas are so low..." This meant it was not worthwhile changing to new feedstocks. German biofuel industry associations are pressing the government to raise minimum 2008 blending levels to 2.6 percent from 2 percent. "If demand is increased we could produce bioethanol using the alternative raw materials," she said. But Verbio was also concerned that transporting sugar products over long distances was environmentally unfriendly. Its two plants are located in large German grain growing areas and supplies can be sourced from nearby farms. Verbio's biodiesel business would also suffer from Germany's new biodiesel taxes, scheduled to rise on January 1, 2008. The taxes had led to a major drop in biodiesel sales at petrol stations. But Verbio was still producing at about 90 percent of its 400,000 tonne annual biodiesel capacity because it has substantial contracts with oil companies for biodiesel blending. (Reporting by Michael Hogan; Editing by Peter Blackburn)