Production in China - Farmers are swindling with Palm Oil imports for Biodiesel
The German Farmers' Association and other organizations are complaining about fraudulent business practices in Biodiesel imports from China. "We are experiencing how the German market is being flooded with supposedly advanced Biodiesel from Chinese production, which apparently comes from unlabeled Palm Oil," said Bernhard Krüsken, the Secretary-General of the Farmers' Association, to the "Augsburger Allgemeine". The Union for the Promotion of Oil and Protein Plants (Ufop) also expressed criticism over the developments, which have been causing unrest among German farmers and oil producers since the beginning of last year. The German market is being "flooded" with "advanced Biodiesel" from China, without it being possible to control whether it is actually a permitted fuel blend, said Ahrens of the German Press Agency.
The Federal Ministry of the Environment responded to inquiries by stating that there is no confirmation of such suspicions so far. Market participants repeatedly raise the suspicion that "fraudulently declared Biodiesel from Chinese production is being brought onto the market at dumping prices" and thus lowering prices. However, neither the Federal Government nor the EU Commission has any confirmation of such suspicions.
Ministry observes suspected fraud cases
The ministry spokesperson also clarified: "We reject the allegation that the Federal Government sees no urgent need for action in this matter." The office of Steffi Lemke (Greens) is closely observing the suspected fraud cases on the Biofuel market.
The Secretary-General of the Farmers' Association, Krüsken, sees significant damage for the domestic industry. Mineral oil companies could be using questionable certificates for the doubtful import biofuels multiple times in their CO2 balance - while buying correspondingly less domestic Rapeseed oil or Bioethanol for the prescribed addition in Diesel and Gasoline.
Background is the suspicion that Mineral Oil Companies are importing favorable biofuels from China and reusing these multiple times on their Climate Protection Balance - although the fuel does not actually meet the conditions to be reused in this way. For the multiple accounting on the so-called Greenhouse Gas Reduction Quota (GHG Quota) in this case, it must be about advanced biofuels that consist of waste, residues or wood chips. The accounting of pure Rapeseed, wheat or Palm Oil is not allowed.
Farmers' Association sees indications of fraud
The German Farmers' Association and German suppliers of advanced biofuels see indications of fraud in the large quantities of such imports from China and in the lacking control mechanisms on site. The Union Ufop refers to EU statistics data and assumes several hundred thousand tons per year in 2023.
To a investigative proceeding, there has not come about in connection with a complaint from the Federal Agency for Agriculture and Food (BLE) in Germany yet. The public prosecutor's office in Bonn stated that the facts did not meet the requirements for a criminal offense, and therefore rejected the procedure, according to the spokesperson of the Environment Ministry. As soon as new insights arise, they will be immediately forwarded to Bonn, it was further stated. However, the EU Commission - the body responsible for recognizing companies that issue certificates for the sustainable production of fuels - holds the greatest legal leverage.
Brussels and Antidumping Procedures
The problem of possibly falsely declared biofuels exists throughout the EU internal market and not only in Germany, emphasized the ministry. It is welcome news that the Commission has announced the initiation of an antidumping procedure for the import of biodiesel from the EU. This concerns fuels from China, "which are allegedly imported into the EU at a price below their normal value and thus significantly harm EU producers," as stated further.
UFO business manager Ahrens demands that the recognition of the THG quota, and consequently the climate balance of corporations, should only be allowed if the production of fuels in the respective country can be independently monitored. This is not the case in China.
Criticism also came from the Union. "European and national control systems must be significantly improved," urged the environmental policy spokesperson of the Union faction, Anja Weisgerber. The federal government is acting much too cautiously. The affected parties are "German biofuel producers and the owners of electric cars, who have to accept lower earnings for their climate protection contribution in the form of THG quotas due to Chinese oversupply," she explained.
Suspected Fraud in Climate Protection Projects
In the past few weeks, an affair about suspected fraud in climate protection projects in China caused a stir. According to the Federal Environment Agency, German mineral oil companies are alleged to have had a contribution to their CO2 balances recognized, which went back to projects in China that probably did not exist. Environment Minister Steffi Lemke (Greens) spoke of "serious environmental crime."
Overall, according to Lemke, there are currently 40 of 69 projects in China under suspicion of fraud. There is no direct connection between these events and the suspected cases of biodiesel imports and the cases examined by the UBA. What both cases have in common: A reliable control of processes that take place directly in China is hardly possible.
- Bernhard Krüsken, the Secretary-General of the German Farmers' Association, expressed concern over suspected fraudulent Biodiesel imports from China, claiming unlabeled Palm Oil as a potential source.
- The Federal Ministry for the Environment has not confirmed the suspicions of fraudulent Biodiesel imports from China, but market participants continue to raise concerns.
- Steffi Lemke's office, a member of the German Parliament from the Greens, is closely observing suspected fraud cases on the Biofuel market.
- Krüsken sees significant damage for the domestic industry due to the alleged importation of favorable biofuels from China, which could be used multiple times in their CO2 balance.
- The EU Commission holds the greatest legal leverage in addressing the issue of falsely declared biofuels, as it is responsible for recognizing companies that issue certificates for the sustainable production of fuels.
- Brussels has announced the initiation of an antidumping procedure for the import of biodiesel from the EU, which allegedly harms EU producers.
- Ahrens, the business manager of the Union for the Promotion of Oil and Protein Plants (Ufop), demands that the recognition of the THG quota should only be allowed if the production of fuels can be independently monitored.
- The Chinese government has not addressed these concerns directly, and reliable control of processes that take place in China is hard to establish.
- The chairman of the German Farmers' Association, Bernhard Krüsken, called on the Federal Government and the European Commission to act more decisively against suspected fraud in Biodiesel imports from China.
- The German Press Agency reported that the Chinese case of suspected fraud in climate protection projects has raised concerns about the reliability of data and certifications in the global Biofuel industry.
