Corporate News
Petrotec AG: Inconsistent treatment of different biofuels in the new commission's proposal to amend the RED
Borken, October 25th, 2012 - Petrotec AG (ISIN DE000PET111), Europe's largest producer of waste-derived biodiesel, predominantly from used cooking oil, is concerned that the EU commissions' proposal amending the RED* 2009.28.EG introduces 'half-baked' criteria restricting some plant-based biofuels, hence impeding the development of the young industry and the supply of alternative biogenous (non-fossil) fuels. The confirmed EU target to provide ten percent of the energy used in the transport sector from renewable sources by 2020 would be eroded.
Nevertheless, the increased focus on CO2 emission reduction and sustainability criteria is in line with Petrotec's business model which since 2005 has reduced approx. 2 million tons of CO2 emissions compared with usage of conventional diesel. It is based on collecting and processing waste into a European-norm-compliant biodiesel for over a decade. Petrotec's business is not part of the iLUC** discussion as its main feedstock, used cooking oil, is a residue from preparing human food in the first place. Petrotec collects used cooking oil from over 15,000 locations and runs an annual biodiesel production capacity of 185,000 tons with a sophisticated technology developed by the Company. Petrotec sells its biodiesel to large mineral oil companies in the EU helping them fulfill their mandatory blending mandates with advanced bio-molecules.
According to the EU Commission's proposal such waste-derived biodiesel from used cooking oil shall continue to receive preferential treatment within the blending quota scheme. There are three main arguments for that: 1. this biodiesel is characterized by an advantageous CO2 emission reduction of 83 percent compared to fossil diesel, 2. this biodiesel is highly sustainable as the waste originated feedstock neither affects biodiversity nor is linked to any food issues and 3. the professional disposal and processing of used cooking oil prevents the sewage system and the environment from being negatively affected by this waste.
The promotion scheme the EU Commission proposes is a regulatory policy using a multiple counting system within the mandatory blending quotas. Thus, there are no direct or indirect subsidies and public budgets are not tapped in any way.
Due to aforementioned convincing arguments, Petrotec sees no rationale for the Commission's intention to incentivize biofuels based on plant residues like straw with the factor four... while the proven most CO2-efficient biodiesel derived from used cooking oil, which is price-competitive and already available at an industrial scale, shall only be counted double. Petrotec does not see any logic behind that unequal treatment nor in the restrictive measures on the virgin based biodiesel while iLUC scientific ground is still being debated.
Such inconsistencies are not in line with the inherent reason for developing biofuels at the first place as an alternative energy source to the depleting fossil oil resources. We are convinced that decision makers have already realized by now that a barrel of used cooking oil collected in a restaurant, which is not only an alternative energy source but also at the same time significantly reduces CO2 emissions, benefits Europe substantially more than a barrel of fossil crude oil drilled out from limited natural resources. Nevertheless, we are afraid that so long that the EU Commission (or national legislator) will refrain from translating this understanding into a coherent long term regulation for this relatively young industry, same industry might in turn refrain from further investing into the next generation biofuels technologies, as these frequent regulatory changes substantially damage investors' forecasting ability.
* RED = Directive 2009/28/EC of the European Parliament and of the council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC
** iLUC = indirect land use change
About Petrotec AG
Petrotec AG, Germany, is the largest European producer of waste-derived biodiesel, mainly based on used cooking oil. The Company owns an overall nominal biodiesel production capacity of 185,000 tons per year at two locations in Germany. Petrotec runs a vertically integrated business model including own collection of used cooking oil from more than 15,000 collection points, treatment and refining of the raw material up to the technologically demanding production of waste-based biodiesel. The Company sells its biodiesel to large mineral oil companies in northwest Europe. The usage of waste based biodiesel is incentivized by major EU countries with a double counting scheme as part of the mandatory blending quotas. Petrotec's EcoPremium biodiesel provides significant environmental and climate advantages with the highest CO2 emission reduction of 83% (compared with fossil diesel) amongst all biofuels approved by the EU Renewable Energy Directive (2009/28/EC). Since its IPO in 2006, Petrotec cleaned 600,000 tons of waste and saved over 1.6 million tons of CO2 emissions. Petrotec is a public listed company (ISIN DE000PET111) in the regulated market of Frankfurt Stock Exchange, in the Prime Standard segment, complying with high international transparency standards. It has a capital stock of 24,543,741 Euro, equaling 24,543,741 shares. Main shareholder is IC Green Energy Ltd., Israel, with a stake of 69 percent, freefloat is approx. 18 percent. In the business year 2011 (Jan. 1st to Dec. 31st) Petrotec reached sales of EUR 173 mio. and generated an EBIT of EUR 5.3 mio. and a net profit of EUR 3.0 mio. The Company employs about 100 employees.
Press contact
Petrotec AG
Falk v. Kriegsheim
Investor Relations / Public Relations
Tel.: +49 (0)172 9837109
ir@petrotec.de
