In the wake of potentially fraudulent behavior regarding unusual trade volumes of biodiesel supposedly made from waste entering the EU from China, which International Sustainability and Carbon Certification System GmbH first announced publicly in April, seven certificates have been withdrawn or temporarily suspended so far, ISCC revealed in late July.

Leading up to the initial investigation, “ISCC was told that the increase of up to half a million tons of biodiesel (approximately 150 million gallons) from China caused a dramatic fall in biodiesel prices in European markets,” ISCC stated.

ISCC reacted immediately by initiating unannounced integrity audits at both randomly selected biodiesel and hydrotreated vegetable oil (HVO) plants in China, as well as at economic operators, which have been reported to ISCC by authorities and other stakeholders.

“In this process, seven certificates have been withdrawn or temporarily suspended so far,” ISCC stated July 27. “However, the sanctions of these seven economic operators did not conclusively indicate criminal behavior.”

ISCC said it is in contact with the authorities of the European Commission and the German Federal Office for Agriculture and Food (Bundesanstalt für Landwirtschaft und Ernährung), which operates the governmental web application for sustainable biomass Nabisy.

BLE filed charges against some economic operators at the public prosecutor’s office in Bonn, Germany.

ISCC said it is providing all required information to these authorities.

“With over 8,000 companies worldwide placing their trust in ISCC, we continue to take the integrity of the certification system very seriously,” said Andreas Feige, managing director of ISCC. “Certification systems need to continuously adapt to deliver what they are designed for—trust. To that end, certification systems need to weed out those using the system with bad intentions.”

ISCC said it takes the responsibility of being a voluntary scheme that is recognized by the European Commission under the Renewable Energy Directive “very seriously.”

“ISCC’s responsibility is to set the system rules under which the cooperating certification bodies control and subsequently certify the companies, known as economic operators,” ISCC stated. “They assess the economic operators along the supply chain as to whether they meet the sustainability and greenhouse-gas (GHG) emissions-savings criteria of RED II.”

To promote the circular economy and reduce competition between crop production for food and energy use, RED II encourages a shift of biofuels made from crops to the use of wastes and residues.

It offers the possibility to claim GHG-emission savings by twice their actual amount, known as double counting, thus creating incentives to prioritize the production of biofuels from specific wastes and residues.

Double counting also creates incentives for fraudulent behavior by operators who, for example, could falsely declare biofuel made from virgin crop oils as having been made from wastes or residues.

“ISCC has continuously strengthened its auditing procedures over the last few years to control and mitigate such relabeling,” the organization stated. “It will continue to tighten the requirements for residue- and waste-based biofuels as it observes new attempts to violate the spirit of the RED. This makes the certification process more rigorous, reduces the likelihood of nonconformities occurring, makes them easier to be detected, and reduces the incentives for fraudulent behavior. While a certification system can detect and sanction cases of noncompliance, it is not a law-enforcement authority that can legally identify and sanction fraudulent activities. Nevertheless, ISCC contributes as much as possible to make its certification procedures even more watertight.”