News / Threat from palm oil fraud sees EC turn its back on biofuel certification

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Questioning the legitimacy of supposedly waste-derived biofuels – an industry said to be in the grip of endemic fraud – the EU may halt recognised certifications, likely impacting shipping lines’ green-insetting offerings.

Data suggests a third of used cooking oil (UCO) biofuel in the European market is fake, containing, instead, large proportions of virgin palm oil, a non-residual product plantation-farmed on deforested land.

Palm-oil permeation could threaten the biofuel insetting services offered in good faith by the shipping industry to its customers.

When ocean carrier group ONE and freight forwarder Yusen Logistics launched a new UCO-based biofuel insetting service, ONE LEAF+, in February, a ONE spokesperson assured The Loadstar that the UCO used for the service would be International Sustainability and Carbon Certification-certified (ISCC).

And it is this ISCC biofuel certification regime that has come into dispute in closed-door meetings of the the EU Committee on Sustainability of Biofuels, Bioliquids and Biomass Fuels.

Among the proposals under consideration by the EC is a measure to suspend recognition of ISCC certification for 2.5 years, subject to approval by member states. If approved, EU members could accept or reject ISCC certificates on a case-by-case basis.

“We are more than surprised by this step,” was the ISCC response last week, describing the EU action as “ad hoc and baseless”.

“ISCC has been a frontrunner in implementing the most strict and effective measures to ensure integrity and fraud prevention in the market for years,” its statement said. “It has an undisputed reputation for setting the strictest standards. We do not see alternatives to ISCC EU with better or even comparable market fraud prevention mechanisms.”

The environmental implications of expanding palm oil farming are so dire that the lifecycle carbon effect of using it as fuel could be worse than that of fossil fuels, environmental groups have said. A biofuel-dependent shipping industry would require an amount of cleared farmland equal to the total area of Germany by 2030, and generate 270 million tonnes of additional CO2-equivalent emissions, compared with just sticking to fossil fuels.

But it is not only the shipping industry that is reliant on questionable UCO supplies, there is enormous demand from the sustainable aviation fuel (SAF) industry.

China, by far the largest exporter of UCO biofuel, is reportedly battling UCO fraud domestically. On 1 December, China opted to remove a tax rebate for UCO exporters, after parties in China were mixing palm oil into UCO to fraudulently claim the rebate.