To date, Germany is the biggest biodiesel producer in the EU. In 2007 alone, Germany produced 2.890 million tones. This is a far cry from France’s 0.872 million tones, which came in second. This data is from the European Diesel Board.

It was downhill from there, though, as Germany’s biodiesel consumption fell by a significant 0.7 million tones last year. They’re projecting further drops by up to 10 million tones compared to 2007’s figures. According to UFOP, the German oilseeds association, these drops are caused by the huge taxes placed on biofuel in general.

These German tax mandates and incentives were first drafted in 2008, raising the energy tax on biofuel up a notch, and excluding soy bean oil-based fuel from German mandates and incentives. These amendments were put through the EU Commission for review because they seem to be misaligned with the union’s state aid regulation.

While the commission ordered for a standstill of the new German laws, Germany responded that they will continue implementing parts of the law which were not criticized by the EU Commission.

So far, three aspects of the law dodged Commission criticism: exclusion of B99 and other previously supported fuels from mandates and incentives; regulation of biofuel quota and mandates; and the regulation of fuel tax increase.

The final decision from the EU is pegged to be released by February or March.