Unannounced integrity audits have been carried out at several biodiesel and hydrotreated vegetable oil plants in China following reports of potential biofuel fraud.
There have been unusual trade volumes of biodiesel made from waste and residues coming from China since early 2023, the International Sustainability and Carbon Certification system (ISCC) said.
The increase of up to half a million tonnes of biodiesel from China caused a “dramatic fall” in biodiesel prices in European markets, according to the ISCC.
Seven certificates have been withdrawn or temporarily suspended so far. However, the ISCC said that this did not conclusively indicate criminal behaviour of these economic operators in China.
The ISCC is a voluntary certification system which covers sustainable agricultural biomass, biogenic wastes and residues, non-biological renewable materials, and recycled carbon-based materials.
Biofuels
Fraudulent behaviour by economic operators, for example, could include falsely declaring fresh produced biofuel feedstocks as wastes or residues, the ISCC said.
The ISCC strengthened its auditing procedures over the last few years to control and mitigate such relabeling, and will continue to tighten the requirements for residue and waste-based biofuels.
While a certification system can detect and sanction cases of non-compliance, it is not a law enforcement authority that can legally identify and sanction fraudulent activities, the ISCC said.
Biofuels are liquid or gaseous transport fuels, such as biodiesel and bioethanol, made from biomass. The EU is working on the transition towards advanced biofuels made from sustainable livestock.
The revised EU Renewable Energy Directive reinforces the sustainability criteria of bioenergy, and considers the negative direct impact that biofuel production may have due to indirect land use change.
Biofuel production typically takes place on cropland that was previously used for agriculture to grow food or feed. Thus, indirect land use change may cause the release of carbon dioxide (CO2) stored in trees and soil.