EU proposals aimed at cutting transport emissions risk boosting the amount of fraudulent used cooking oil (UCO) imported into the EU, according to a new study by the International Council for Clean Transportation (ICCT), a US-based non-profit organisation.
The study, published on Tuesday (22 February), compares UCO collection and domestic use rates in six Asian countries to the quantities in demand for export.
The findings cast doubt on Asian countries’ ability to meet the future demand prompted by tabled EU legislation, increasing the risk that restricted feedstocks, such as virgin palm oil, will be illicitly used to bulk up UCO quantities.
“Already most of the growing UCO biodiesel production in China is driven by demand for UCO biodiesel in the European Union, and the demand stems from policy incentives under the Renewable Energy Directive,” states the report.
Demand for UCO is expected to soar in the coming years, as the EU turns in part to waste-based biofuels to wean the transport sector off fossil fuels.
Policy proposals put forward as part of the European Commission’s “Fit for 55” package of climate laws would see biofuels derived from UCO blended with kerosene to cut aviation emissions, and used in ships to reduce the carbon footprint of the maritime sector.
However, the EU is incapable of producing enough UCO to satisfy the bloc’s demand, leading to high levels of importation. Around 68% of UCO imports in 2019 were from Asia and the United States.
The study focused on six major UCO exporting nations in Asia: China, India, Indonesia, Japan, Malaysia, and the Republic of Korea.
Malaysia, a regional UCO hub, emerges as the country with the most noticeable discrepancy between the amount of biofuels in the country and the amount exported, which indicates possible fraud.
The Asian country collects and imports between 256 and 279 kilotonnes of UCO, while its combined domestic usage and exports is estimated to be 321 kilotonnes – a difference of some 42 to 65 kilotonnes.
“Our study indicates that there’s a fraud risk with used cooking oil, and that indicates that there should be a cap in the ReFuelEU Aviation and the FuelEU Maritime regulations,” Chelsea Baldino, one of the study’s authors, told EURACTIV.
“Not only will that cap reduce the risk of fraud, but it also will help support the nascent technologies that we will need in the long term to decarbonise aviation and marine,” she added.
ICCT is advocating that the 1.7% transport cap on biofuels derived from used cooking oil and animal lipids currently in the renewable energy directive be applied to the aviation and maritime sectors. The cap is currently set out in part B of Annex IX, which lists EU-approved feedstocks.
While there is a sizable gap between collection rates and the potential UCO that could be collected in many of the countries looked at, Baldino does not believe that simply ramping up collection will remove the risk of fraud.
“Even if collection increases, it does not mean all of it will be available for export to Europe. Some of this used cooking oil could become gutter oil and not actually be available for export,” she said.
“Gutter oil” refers to the illicit practice of collecting used cooking oil from restaurant fryers, sewer drains, and grease traps to resell or use as new.
It is difficult to determine how widespread the practice is, making surplus or deficit figures difficult to accurately calculate, particularly in China, India, and Indonesia, Baldino explained.
EU policy driving demand for biofuels
The ReFuelEU Aviation proposal would require aircraft refuelling in EU airports to uplift a set percentage of sustainable aviation fuels (SAF) mixed with kerosene. This percentage would scale up over time.
While in the long-term much of the SAF requirement is expected to be met with renewable electro-fuels, SAF producers are likely to turn to UCO in the short term, an affordable feedstock capable of being refined into jet fuel using mature technology.
FuelEU Maritime stops short of a blending mandate but incentivises low-carbon fuels, which is expected to boost demand for UCO-derived biofuels.
As proposed, neither regulation contains a cap on the total amount of waste oil based biofuels that can be used to meet their stated targets.
The European Waste-based and Advanced Biofuels Association (EWABA), rejected the recommendations by the ICCT, arguing that the proposed 1.7% limit on waste lipids in ReFuelEU Aviation is too high.
A lower limit, the trade association contends, will prevent the diversion of feedstocks from the road and maritime sectors, where UCO can be processed more efficiently and in which there is already an established market. A 1.7% limit will essentially push up emissions in the road and maritime sectors to more marginally cut emissions in the aviation sector, exacerbating the climate crisis, they argue.
However, when it comes to introducing a 1.7% limit for part B feedstocks in the Renewable Energy Directive and for FuelEU Maritime, EWABA argue that the figure is too restrictive.
“Limiting part B of Annex IX in REDIII and FuelEU for road and maritime use makes no sense,” EWABA Secretary General Angel Alberdi told EURACTIV.
“Part B feedstocks for road and maritime use are the most cost-effective way to bring a waste-based decarbonising solution with GHG reductions of over 90% when compared to fossil fuels,” he added.
Alberdi pointed to European Commission plans to adopt stricter standards for feedstock certification schemes next month and the foreseen 2023 roll-out of a track and trace database for biofuels and bioliquids.
“These two measures more than sufficiently address any fraud concerns,” he said.
The addition of new feedstocks to the EU-approved list for biofuels production – a revision set to occur every two years – also makes the 1.7% limit arbitrary, he argued.
[Edited by Frédéric Simon]