German firm Petrotec stops biodiesel production

HAMBURG, Oct 23 (Reuters) - German biodiesel producer Petrotec (PT8G.DE) said on Tuesday it was temporarily stopping biodiesel production partly because Germany's biofuel taxes have hit sales.

Market conditions do not permit the company to cover production costs, it said.

Petrotec shares were down 13.2 percent at 5.90 euros at 0815 GMT.

The company produces about 85,000 tonnes of biodiesel annually at Borken in north Germany using waste edible oil.

A new plant under construction to produce 100,000 tonnes of biodiesel annually at the North Sea port of Emden would not go into production when it is completed at the end of this year, the company said in a statement.

Petrotec also reduced its 2007 turnover forecast to 58 to 60 million euros ($82.39-$85.24 million) from 65 to 68 million euros. It retained its forecast of a loss before interest, tax and amortisation (Ebita) of between two to three million euros.

Germany's once-booming biodiesel industry is suffering from the impact of the government's decision to start taxing the green fuel in August 2006.

Renewable fuels industry association BBK has estimated plants are working at only 40 to 50 percent of capacity as the tax has removed biodiesel's price advantage over fossil diesel.

A further biodiesel tax rise is scheduled for January 1, 2008, and the government has so far refused calls to reconsider this.