EU Scrutinizes Fraud in Certification of Biofuels

April 01, 2025

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(The Maritime Executive) The scrutiny on the use of biofuels in Europe has intensified, with reports emerging last week that the EU is planning to suspend recognition of the ISCC certification of waste-based biofuels. The International Sustainability and Carbon Certification (ISCC) has an EU certification scheme that verifies that biofuels entering the EU market are compliant with the bloc’s sustainability requirements, as set out in the Renewable Energy Directive (RED) II.

The EU Committee on Sustainability of Biofuels, Bioliquids and Biomass Fuels had convened to discuss rising fraud cases of biofuels in the European market. While the deliberations of the committee are confidential, one of the outcomes reportedly is a proposal to the European Commission to suspend recognition of ISCC certifications for waste-based biofuels for 2.5 years. If the 27 member states approve the suspension, EU countries will have the discretion to accept or reject ISCC certificates.

A surge of imports from South-East Asia has raised serious concerns on the compliance of these biofuels with EU market regulations. Market players blame this on lax verification procedures by ISCC, which is the largest feedstock accreditor. Data from fuel regulators in Europe estimate that 1.8 million tons of fraudulent ISCC-certified Palm Oil Mill Effluent (POME) entered the EU in 2023. POME is a byproduct of palm oil processing and is used as a feedstock in production of biodiesel. The biofuel is gaining widespread use in the shipping industry.

“Based on European Commission data published in December, a third of the used cooking oil (UCO) is undoubtedly fake, most likely sourced directly from virgin palm oil,” James Cogan, EU Government Affairs, Industry& Policy Director at biotech firm ClonBio Group, told S&P Global. Virgin palm oil as a feedstock is ineligible for renewable energy incentives under the EU’s RED II initiative. This is based on its alleged contribution to deforestation abroad.

In addition, the EU proposal comes at a time when the shipping industry in Europe has started a journey on use of ISCC certified biofuels, as a measure towards a green transition.

The ISCC system said that it is aware of the EU Biofuels Committee’s discussions, noting that it was surprised by the suspension proposal. READ MORE

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On the Recent Discussions on ISCC EU Certification for Waste-Based Biofuels (International Sustainability and Carbon Certification)
Important Update on the Recent Discussions on ISCC EU Certification for Waste-Based Biofuels (International Sustainability and Carbon Certification)
T&E: Investigating fraud and discrepancies in EU biofuels (Safety4Sea)
Update on the Recent Discussions Around ISCC EU Certifications for Waste-Based Biofuels (International Sustainability and Carbon Certification)

Excerpt from International Sustainability and Carbon Certification: ISCC is aware of the recent discussions by the EU Committee on Sustainability of Biofuels, Bioliquids, and Biomass Fuels concerning future recognition of ISCC EU certification of waste-based biofuels.

According to our current information, the European Commission is considering suspending the recognition of ISCC EU for waste-based biofuels for 2.5 years. This action is said to be subject to further legal scrutiny and will need approval by Member States.

We are more than surprised by this step. ISCC has been a frontrunner in implementing the most strict and effective measures to ensure integrity and fraud prevention in the market for years. It has an undisputed reputation for setting the strictest standards. It comes after we have actively supported the European Commission’s and Member States’ investigation of the alleged frauds and promoted and implemented additional anti-fraud measures in dialogue with the European Commission during the past two years.

Therefore, we are unable to see the rationale of the planned measure, which seems ad hoc and baseless. We do not see alternatives to ISCC EU with better or even comparable market fraud prevention mechanisms. Moreover, other voluntary schemes would not be able to fill the gap. The measure would be a severe blow to the entire market for waste-based biofuels and would seriously jeopardise the ability of the obligated parties to comply with blending mandates.

Also, we see no legal basis for the planned measure. Fundamental procedural and legal rules, such as the right to a prior hearing, have not been observed. The fact that only the ISCC EU recognition for waste-based biofuels is to be singled out discriminates against us.

We are in ongoing and constructive dialogue with the European Commission and will, together with our market partners, do everything in our power to avoid further market disruption. We remain committed to keeping our members, partners, and stakeholders informed as soon as further details become available.

Important Update: For the latest information on this matter, please see the European Commission’s official position on the recent discussions held by the EU Committee on Sustainability of Biofuels, Bioliquids, and Biomass Fuels. READ MORE

Excerpt from International Sustainability and Carbon Certification: In the interest of transparency and timely communication, ISCC is sharing the European Commission’s official position on the recent discussions held by the EU Committee on Sustainability of Biofuels, Bioliquids, and Biomass Fuels:

On 26 March, the Committee on the Sustainability of Biofuels, Bioliquids and Biomass Fuels, established under Renewable Energy Directive, met in Brussels for an in-person meeting. Let us remind that in accordance with the Rules of Procedure of the Committee, its deliberations are confidential.
The purpose of the meeting was to discuss issues related to the sustainable certification and promotion of biofuels, avoidance of double counting, the Union database, and prevention of fraud cases.
The Commission is still working on its examination of an alleged fraud in biodiesel imports from China.
No decision has been made.

We will continue to keep our members, partners, and stakeholders fully informed and supported throughout this process. READ MORE

Excerpt from Safety4Sea: Transport and Environment (T&E) has issued a briefing into the growing concerns surrounding the use of Palm Oil Mill Effluents (POME) in EU biofuels, highlighting potential fraud and discrepancies in reported volumes amidst the shift towards waste-based alternatives.

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A recent report by T&E reveals troubling trends in the use of POME in EU biofuels, suggesting that the reported quantities exceed what is feasible, raising suspicions of fraud.

Impact of the EU’s phase-out of palm oil biofuels

The EU’s shift from palm oil-based to waste-derived biofuels was influenced by the 2018 decision to phase out conventional palm oil biofuels, resulting in an 80% reduction by the end of 2023. Waste materials like POME have become increasingly important, making up 40% of compliant biofuels in 2023. However, the growing demand for POME has led to a significant surge in its consumption, especially in the form of Hydrotreated Vegetable Oil (HVO) for low-emission diesel alternatives. As of 2023, POME accounted for a large share of HVO production, with major oil companies like Eni, Shell, and Total using it extensively. This rapid increase in POME use, particularly in countries like Spain, Italy, Germany, and the UK, has prompted concerns about the authenticity of reported volumes, suggesting the possibility of fraud in the biofuels supply chain.

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Recommendations

Palm oil mill effluent (POME) residues should be prioritised for local decarbonisation efforts in producing countries, especially with emerging uses such as biogas production.
POME should be removed from the Annex IX list of double-counted advanced biofuels in the EU Renewable Energy Directive, considering that several EU member states have recommended limiting the amount of POME-based biofuels that can be counted towards the Directive targets.
A complete review of the certification system is needed, shifting from industry-led voluntary schemes to more stringent EU and national regulations. National governments should establish supervision procedures, such as cooperation frameworks with third countries.
A dedicated EU-level fraud investigation unit that can be triggered by industry whistleblower alerts, suspicious transactions, or suspected market distortions should be established.
These recommendations should be complemented with support for cleaner alternatives, with direct electrification preferred for road transport and hydrogen-based fuels for sectors harder to electrify, such as aviation and shipping. READ MORE

Excerpt from International Sustainability and Carbon Certification: In light of the recent public speculation regarding ISCC EU certifications for waste-based biofuels, ISCC would like to provide clear and factual information following a constructive in-person meeting with the European Commission (EC) on 4 April 2025 in Brussels.

Background

Misrepresented information from a meeting of the EU Committee on Sustainability of Biofuels, Bioliquids, and Biomass Fuels, held on 26 March 2025, has been made public. The meeting’s discussions are confidential, according to its Terms of Reference.

Confirmed current factual situation

In the meeting with the EC on 4 April 2025, the following points were confirmed:

The EU Committee met on 26 March to discuss broader issues concerning the certification and promotion of biofuels. The discussion was triggered by a Member State requesting the EC to examine an alleged fraud case related to biodiesel imports from China. ISCC was mentioned in the context of voluntary certification schemes, yet the main focus remained on strengthening the overall certification framework – not on ISCC EU specifically.
Contrary to claims made by an individual on social media, no vote took place, and no decisions were made during the EU Committee’s meeting. This misinformation was shared by this individual who did not participate to the EU Committee meeting.
Since 2024, ISCC has worked closely with the EC on an action plan of further measures to strengthen certification. These measures go beyond requirements from the EC recognition and were positively acknowledged during our meeting on 4 April 2025. Our collaboration with the EC remains constructive, with both parties committed to restoring market confidence.
The Union Database (UDB) will be a further significant step to prevent noncompliances in the value chain. ISCC EU heavily supports the UDB development and has onboarded over 90% of its system users.
The EC is working on an amendment of the Implementing Regulation 2022/996 to strengthen the overall sustainability system further, and ISCC will provide feedback from practical operations and ideas of what could be done.

Next steps

Looking ahead, EC and ISCC will continue their close collaboration to assess the impact of the measures introduced by ISCC and explore additional possibilities to strengthen the sustainability certification framework and legal scrutiny further.

It should be noted that recent discussions are only related to ISCC EU for waste-based biofuels.

ISCC remains committed to further intensifying cooperation and supporting authorities in their efforts to uphold integrity and compliance. Whenever ISCC receives credible information about potential wrongdoing, the ISCC Integrity Programme triggers a thorough investigation. This programme is managed by an in-house team of experts and is designed to strengthen our system continuously. It applies lessons learned from internal monitoring, market intelligence, whistleblower reports and integrity assessments.

Closing remark

ISCC encourages all stakeholders to rely on verified, fact-based information only and avoid engaging in speculation. ISCC remains steadfast in cooperating with the European Commission, Member States, authorities and industry partners to ensure the integrity of the biofuels sector.

ISCC is confident that it will continue to provide the highest-level certification scheme, and at the same time is committed to implement whatever it takes to further strengthen the scheme in particular in high-risk value chains with special policy incentives. READ MORE

Tags

used cooking oil (UCO) UK (United Kingdom) Transportation Fuels Policy Sustainability Spain Southeast Asia shipping Renewable Energy Directive (RED/RED II/RED III) Renewable Diesel/Green Diesel/HVO/Paraffinic Diesel regulations palm oil mill effluent (POME) palm oil monitoring/measuring reporting verifiction (MRV) market forces Marine/Maritime Bio and Renewable/Sustainable Fuel (SMF) Italy International Sustainability and Carbon Certification model(ISCC) import/export HVO (Hydrotreated vegetable oil) history Germany fraud European Union (EU) environmental policy environmental policy defossilization deforestation certification Biogas Biofuel Crops biodiesel Agricultural Policy China

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