Germany's Landwärme declares insolvency

Market: Biofuels, Natural gas
13/08/24

German biomethane supplier Landwärme has today declared insolvency under the country's self-administration procedure and has initiated restructuring measures "to overcome the consequences of the ongoing decline in prices of German greenhouse gas (GHG) emission reduction quota".

Self-administration proceedings are a proven legal framework in German restructuring law analogous to the US' Chapter 11 bankruptcy proceedings. They allow businesses to reorganise structures and financing while operations continue.

Landwärme attributed the price decline of German GHG tickets to an influx of imported, falsely-labelled biodiesel since the start of last year, as well as other alleged fraud cases regarding upstream emission reduction (UER) projects. Fake UER projects have caused the biofuel industry around €4.5bn in damages, according to the company.

Argus' Other GHG credits, GHG certificates which do not fall under caps for crop-based and Annex Part B biofuels, averaged €100/t CO2e in July, down from around €400/t CO2e in January 2023.

Landwärme is also looking to bring a "financially strong partner on board" to regain the necessary stability, it said, and intends to complete the restructuring as quickly as possible.

"This procedure could have been avoided if politicians and authorities had been more consistent in prosecuting and combating the alleged fraud cases in biodiesel and UER projects", managing director Zoltan Elek said.

By Sophie Barthel

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