UFOP welcomes EU Energy Council initiative to prevent fraud in biofuel, raw-material imports

At a meeting of the EU Energy Council in mid-October, the sharp increase in imports of biofuels from palm oil mill effluent (POME) and the need for action to prevent fraud were discussed at the initiative of Ireland, Germany, Belgium and the Netherlands. 

The Union for the Promotion of Oil and Protein Crops (UFOP) welcomed this overdue initiative, as the development was to be expected.

The economic incentive to direct the corresponding amount of waste is too great due to the possible double counting towards the quota obligations.

The UFOP emphasized the legal framework of Europe’s Renewable Energy Directive, which authorizes member states to count biofuels from POME double towards their quota obligations.

The organization pointed out that the German government has not made use of this authorization.

These biofuels can be counted towards the sub-quota for advanced biofuels, but only once the minimum requirement has been met.

Nevertheless, according to the 2022 Evaluation and Experience Report of the Federal Agency for Agriculture and Food (BLE), the amendment to the German Greenhouse Gas Quota Act led to a rapid increase in imports in the country, from around 68,000 tons in 2021 to approximately 310,000 tons in 2022.

From UFOP’s point of view, this can be explained by the fact that the sub-quota can be met comparatively inexpensively with POME biofuels.

Therefore, in the interest of fraud prevention, the sub-quota must be significantly increased nationally, according to UFOP, and it must be examined whether a cap should be introduced for double counting if waste oils are the raw-material basis.

UFOP pointed out the theoretically available quantity potential of waste oils: With a global vegetable oil production in 2023 of around 230 million tons and assuming that 5 percent to 10 percent of this can be collected as recyclable waste, the global supply is limited to around 11 million to 23 million tons.

The UFOP said it sees a considerable need to coordinate EU harmonization for categorizing waste oils and fats in part A and part B of Annex IX of RED II.

This is one of the prerequisites for fulfilling the expectation expressed by EU Energy Commissioner Kadri Simson at the meeting of the Energy Council that the newly emerging Union Database for Biofuels can also contribute to fraud prevention.

“In principle, the EU Commission must, in the view of the UFOP, itself fulfill its responsibility to check that the type of raw material is in line with the procedural innovation for proving compliance with the legal requirement according to Art. 28 (6) of the Renewable Energy Directive 2018/2001 (RED II): ‘Raw materials that can only be processed using advanced technologies will be included in Annex IX Part A,’” UFOP said. “This has not yet been done and is a further necessity for fraud prevention.”

Against this background, UFOP welcomed Simson’s announcement that she will propose to the council that a working group be set up, but this working group should also include experts from industry and certification systems.

The latter in particular must also be held accountable with regard to the quality of on-site inspections and the certification of biofuel producers, as the example of China shows, according to UFOP.

In this sense, the certification systems and certification bodies approved by the EU Commission are the extended and responsible arm of the EU Commission to carry out on-site inspections in accordance with EU law.

“It is incomprehensible that imports were allowed to continue even though on-site inspections and/or cooperation with the relevant authorities to clarify the quantities suspected of fraud were refused,” UFOP stated. “In such cases, market access must be refused immediately.”