Neste challenges assertions in USDA report about receiving fraudulent UCO from China

The recent USDA Biofuels Annual Report on China published Sept. 1 suggests that Neste may have received fraudulent used cooking oil (UCO) volumes at its biorefinery in Singapore, specifically virgin palm oil from Indonesia exported fraudulently as UCO via China.

Neste said Sept. 8 that it takes suspected fraud cases seriously and investigates them accordingly.

“In addition, the company continuously evaluates the quality and authenticity of the raw-material volumes it receives, conducting thorough laboratory analyses of the samples of UCO volumes it receives to its terminals from China,” the company stated. “Neste’s recent analyses of UCO received from China do not support the USDA’s assertions, hence the company believes that the reference to Neste in the USDA report is either a mistake or based on a misunderstanding.”

Neste said it will contact the appropriate authorities at USDA to discuss and learn more about the assertions in the report.

The company added that it sources traceable UCO and other renewable raw materials globally from carefully selected suppliers.

“Neste evaluates its suppliers and accepts renewable raw materials only from those suppliers that are able to meet strict criteria for sustainability and end-market regulation,” the company stated. “Neste ensures traceability of the sourced raw materials as is required by law, and uses audits, carried out by independent third-party experts and Neste itself, to monitor sustainability performance of suppliers. This also helps Neste reduce the risk of fraud within its supply chains.”

The biorefiner with plants in Singapore, Finland, the Netherlands and U.S. added that it does not import conventional biofuels nor renewable diesel from China or Indonesia to the European market or elsewhere.

“Instead, Neste produces its high-quality renewable products such as renewable diesel at its own refineries,” the company stated. “Hence any suggestions that Neste would somehow be involved in the Chinese or Indonesian biofuels exports to Europe or elsewhere are incorrect.”

In April, the International Sustainability and Carbon Certification System GmbH publicly addressed the issue of potentially fraudulent mislabeling of advanced biodiesel being imported into Europe from China using feedstock from Malaysia and Indonesia. Indications were that some of these biodiesel imports labeled as advanced, meaning made from waste materials such as UCO or palm oil mill effluent (POME), were possibly made from virgin palm oil, which would invalidate the sustainability certificates and trigger additional measures.

This summer, ISCC revealed that it had withdrawn or temporarily suspended seven certificates as a result of its investigation.

In mid-August, the European Commission officially opened an investigation to address suspected evasion of EU countervailing duties on Indonesian biodiesel imports via China and via the U.K., which was triggered by a July request from the European Biodiesel Board.

“Growing volumes of Indonesian palm oil-based biodiesel appear to be exported to China, and then reexported toward Europe,” EBB stated in August. “The Chinese Island of Hainan, located in the South-China Sea, makes an ideal green-fuel hot spot for evaders. In 2022, Hainan, which has no sizeable biodiesel capacity, surprisingly accounted for nearly a third of the 2.3 million tons (690 million gallons) of Chinese biodiesel declared for exports to Europe.”