The UK government is investigating HVO diesel, a rapidly growing “green fuel,” following claims of widespread fraud, according to a report by the BBC.
HVO, which is gaining popularity as a transport fuel and for powering events like music festivals, is touted by its supporters as a solution to reduce carbon emissions by up to 90%. This is due to its production from waste materials such as used cooking oil.
HVO, praised as a low-emissions alternative to diesel, is marketed as being made from waste products like used cooking oil and palm oil production sludge. It can reduce carbon emissions by up to 90% and has seen rapid adoption in sectors like transport and events, with UK consumption rising from 8 million litres in 2019 to approximately 699 million litres in 2024.
However, industry whistleblowers told the BBC that instead of using genuine waste materials, some HVO producers are fraudulently using virgin palm oil, relabelled to qualify for environmental incentives. Virgin palm oil production is linked to tropical deforestation, a major contributor to climate change and biodiversity loss.
One whistleblower, a former biofuels trader, claimed to have purchased large shipments falsely labelled as palm sludge waste, alleging internal resistance to investigating the fraud: “I was told they didn’t want to do anything because the evidence would be burned.”
Data reviewed by the BBC, in collaboration with campaign group Transport & Environment, shows Europe and the UK consumed about two million tonnes of palm sludge waste in 2023 — nearly double the estimated global annual production of just over one million tonnes. The figures suggest that non-waste materials, including virgin palm oil, are likely being passed off as waste to meet biofuel demand.
Dr. Christian Bickert, a German farmer and biofuels expert, explained the difficulty in distinguishing virgin palm oil from sludge waste: “Chemically, the sludge and the pure palm oil are absolutely the same… there’s no paper which proves the fraud, but the figures tell a clear story.”
The credibility of the waste-based biofuel industry relies on independent certification, primarily managed by ISCC (International Sustainability and Carbon Certification). However, oversight in key source countries such as China, Indonesia, and Malaysia is reportedly weak. In China, ISCC inspectors are not allowed on-site and must rely on local partners for verification, raising concerns about transparency.
Construction giant Balfour Beatty has already banned the use of HVO, citing insufficient visibility over the fuel’s supply chain. “We are not able to get any level of assurance that this is truly a sustainable product,” said Jo Gilroy, the company’s sustainability director.
The European Waste-based and Advanced Biofuels Association echoed these concerns, stating that “there is a major certification verification issue that needs to be addressed as a matter of priority,” urging ISCC to strengthen oversight, particularly for non-EU biodiesel sources.
In response to the growing scrutiny, Irish regulators have limited incentives for palm waste-based fuels. Meanwhile, the EU is reportedly considering a two-and-a-half-year suspension of ISCC certification for waste biofuels — a significant move that could disrupt the market.
ISCC said it was “more than surprised” by the EU’s proposed action, defending its reputation as a leader in fraud prevention. “The measure would be a severe blow to the entire market for waste-based biofuels,” it warned.
The UK’s Department for Transport confirmed it is investigating the claims, stating it takes the concerns seriously and is working with stakeholders and international partners to gather more information.
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