In a bid to combat biofuels fraud, the European Biodiesel Board (EBB) has unveiled a comprehensive and forward-looking proposal to revise the verification rules for sustainable biofuels. The EBB, which represents EU producers of HVO and FAME from various feedstocks, is pushing for changes aimed at enhancing the verification system’s strength and ensuring fair competition with non-EU economic operators.
The rise in imports from Southeast Asia since 2022, which has led to the collapse of the EU market, has sparked significant concerns about the compliance of some imports with the Renewable Energy Directive (RED). These concerns are fueled by the unusual surge in both biodiesel production and the availability of waste feedstocks. As the EBB raised alarms on this issue, more industry stakeholders have voiced their support for action. In May 2024, Member States at the Energy Council meeting called for the European Commission to implement “strong corrective actions” to prevent fraudulent biofuels from entering the European market. Additionally, an environmental NGO focused on transport has also called for immediate action, while both Indonesia and Malaysia have started taking steps to prevent tax fraud related to exported palm oil waste feedstocks.
Re-evaluating Biofuels Verification Rules
The European Commission is currently reassessing the verification rules governing biofuels in the EU market. The 30-page document published by the EBB today proposes immediate amendments to these rules. One key recommendation is that the verification standards applied to domestic producers should be equally enforced for biofuels imported into the EU. For example, the proposal suggests that systematic on-site audits of production facilities outside the EU should become standard practice, mirroring current practices within the EU.
The proposal also emphasizes that before biofuels can count toward the RED target, Member States must authorize the quantities, capacities, and feedstock use of biofuels produced from raw materials listed in Annex IX. This step is already in place in some countries.
Furthermore, the EBB recommends strengthening the Union Database for Biofuels (UDB) by including additional information and documentation to facilitate better verification. It also advocates for stricter sanctions against non-compliance, including retroactive withdrawal of certificates, ensuring that only genuinely sustainable biofuels contribute to meeting RED objectives.
Urgency in Addressing Fraud
Xavier Noyon, Secretary General of the European Biodiesel Board, commented on the proposal: “We understand that the ambitious reforms we are proposing will require additional effort and resources from EBB members, the broader industry, verification schemes, Member States, and the Commission. However, this is the price we must pay. Fraud poses an existential threat to our industry, undermines the RED verification process, and jeopardizes the EU’s climate goals.”
