EU incapable of detecting fraud in biofuel imports, complainant says

The complainant, who asked not to be identified, argued that the EU has failed to put in place systems capable of detecting fraud in used cooking oil imports. [LALS STOCK / Shutterstock.com]

The EU’s approach to monitoring fraud in the importation of used cooking oil (UCO) – a feedstock used to produce green biodiesel – is unfit for purpose, the complainant behind the EU ombudsman’s recent maladministration ruling has told EURACTIV.

The complainant, who asked not to be identified, argued that the EU has failed to put in place systems capable of detecting fraud in UCO imports and called the European Commission’s refusal to provide information on the origin of UCO in the EU’s energy mix “astonishing”.

Currently, the Commission relies on voluntary and national certification schemes to assess the origins of UCO imports. These voluntary schemes must adhere to criteria laid out by the Commission and can be recognised for a period of 5 years.

To better trace biofuels consumed in the EU, a new EU-wide database is due to be implemented as part of the revised Renewable Energy Directive. However, this database is not expected to be operational until the end of 2022.

“In all other areas where fiscal and trade fraud opportunities exist, we have bodies such as the European Anti-Fraud Office (OLAF), Europol, and the new European Public Prosecutor’s Office (EPPO) for investigating, prosecuting, and bringing to judgment crimes against the interests of the EU,” the complainant said.

“By contrast, in the fast growing and highly lucrative renewable fuels business we have an inexistent database,” they added. “There must be a word for the weird kind of group delusion it takes for a situation like this to come about”.

EU ombudsman ruling

On 8 November, the EU ombudsman, a Strasbourg-based watchdog, found that the Commission’s refusal to provide documents sought by the complainant in April 2020 on the origins of imported UCO reported under the voluntary certification schemes amounted to maladministration.

The Commission initially indicated to the complainant that it did not hold the specified information, before backtracking and arguing that the documents were spread across several databases, making the information impossible to provide coherently.

The ombudsman encouraged the Commission to provide the information regardless of format, as the complainant indicated they were willing to accept the information in a fragmented state.

However, the Commission did not accept the recommendation, a move the ombudsman called a “deliberate and inexplicable refusal” to settle the case.

In its recommendation, the ombudsman said that “an overriding public interest in disclosure shall be deemed to exist” in releasing the information, given the potential for fraud in UCO imports.

The EU executive now has until February 2022 to formally respond to the watchdog’s finding.

An EU spokesperson previously told EURACTIV that the Commission has taken note of the recommendation and is “analysing the case”.

New fraud investigation casts doubt over used cooking oil origins

A fresh biofuels fraud investigation in the Netherlands has once again shone a spotlight on the origin of imported used cooking oil (UCO) in the EU. 

Decarbonising transport

Used cooking oil, such as the fat left over from frying chips, is a waste biofuel seen as a green alternative to fossil fuels. It is currently double counted towards renewable energy targets and is held as one of the means to decarbonise the transport sector.

However, critics have long expressed concerned that virgin oils from palm, which has been linked to deforestation in tropical countries, may be mixed with genuine waste oils to boost UCO quantities.

As the EU increasingly shifts to greener transport fuels, there is worry that the increased demand and higher price for UCO will incentivise fraud, particularly in imports.

Around 1.5 million tonnes out of 2.8 million tonnes of UCO were imported in 2019 according to clean mobility NGO Transport & Environment (T&E), with around a third coming from China. Significant quantities were also imported into Europe from Malaysia and Indonesia.

Criticism

The EU Commission’s seeming inability to provide information on the origins of UCO was criticised by T&E, who said the EU executive should “improve transparency and stop blocking legitimate requests for data”.

“The Commission is withholding information on this issue because it knows that its UCO policy is a mess. Europe’s growing demand for waste oil is being met with vast imports from countries like China, the US, and Indonesia, with no controls on whether supposedly ‘waste’ oil is being mixed with virgin oil,” Maik Marahrens, senior campaigner at T&E, told EURACTIV.

“Fundamentally, Europe should only use the chip fat oil that comes from its own kitchens, not import it from the other side of the world,” Marahrens added.

Industry welcomes traceability

Asked for comment by EURACTIV, the European Biodiesel Board (EBB), a biofuels trade association, said the industry strongly supports the EU’s proposed traceability database to establish the sustainability of UCO.

All UCO feedstock used by EBB members at present are certified by the voluntary schemes recognised by the Commission.

“For years, the implementation of this traceability database has been a key EBB advocacy message, to ensure that stakeholders and civil society trust the GHG emissions reductions from biofuels, the origin of wastes and residues, and there aren’t any concerns with potential fraud,” André Paula Santos, EBB public affairs director, told EURACTIV.

“We expect the incoming traceability database – which by the way will be equally applicable to all feedstocks, both EU generated and imported – will help put aside any concerns with fraud and ensure that only sustainable feedstocks are used for biodiesel production in the EU,” he added.

EU Ombudsman corners Commission after denial to unveil used cooking oil data

The European Commission has until February 2022 to comply with the EU Ombudsman’s recommendation to provide data related to the origins of imported Used Cooking Oil (UCO) biofuel in the EU, amid concerns over alleged fraud cases.

[Edited by Frédéric Simon]

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