The UK government is currently investigating allegations of fraud involving a popular “green fuel” known as HVO (hydrotreated vegetable oil) diesel, the BBC has learned.
HVO diesel is growing in popularity as a transport fuel and for powering events like music festivals. Advocates claim it can reduce carbon emissions by up to 90% because it is made from waste materials such as used cooking oil. However, whistleblowers within the industry have raised concerns, suggesting that large quantities of the materials used to make HVO are not waste at all but instead virgin palm oil, which is being falsely labeled.
BBC-compiled data shared with the UK’s Department for Transport (DfT) raises further doubts about one of HVO’s key ingredients, a substance known as palm sludge waste. Analysis shows that Europe used more palm sludge waste for biofuels in 2023 than is believed to be globally available.
In response, the Department for Transport stated that it “takes the concerns raised seriously” and is working with stakeholders and international partners to gather more information.
HVO has been lauded as a “wonder-fuel” in recent years, praised for its ability to serve as a 100% substitute for diesel and reduce emissions linked to global warming. UK consumption of HVO has skyrocketed from 8 million liters in 2019 to an estimated 699 million liters in 2024, according to provisional government data.
The green credentials of HVO rely on it being sourced from waste materials, particularly used cooking oil or palm oil sludge. However, whistleblowers have told the BBC they believe that significant quantities of virgin palm oil, along with other non-waste materials, are being used instead.
This practice could be damaging to the environment, as the production of virgin palm oil is linked to deforestation in tropical regions, contributing to climate change and threatening endangered species such as orangutans.
One whistleblower, a large European biofuel manufacturer, described how palm oil “floods the market like cancer,” adding that to stay in business, companies must pretend to use waste materials. Another whistleblower, a former biofuel trader, claimed to have purchased multiple shipments of virgin palm oil that had been misclassified as palm oil sludge.
Further investigation by the BBC, alongside data from the campaign group Transport & Environment, reveals that the UK and EU used approximately 2 million tonnes of palm sludge waste for biofuels in 2023, based on data from Eurostat and the UK Department for Transport. However, global production of palm sludge waste is estimated at just over 1 million tonnes per year, suggesting that non-waste fuels like virgin palm oil are being used to meet Europe’s growing demand for biofuels.
Dr. Christian Bickert, a German farmer and biofuel expert, believes that much of the HVO made from these supposed waste products is fraudulent. “Chemically, the sludge and pure palm oil are the same because they come from the same plant,” he explained. “The figures tell a clear story.”
HVO’s sustainability claims rely on an independent certification system, primarily managed by ISCC (International Sustainability and Carbon Certification). This system ensures that biofuels are genuinely made from waste materials, but supervision in countries like Indonesia, Malaysia, and China—key suppliers of raw materials—is challenging.
Dr. Bickert noted that in countries like China, ISCC inspectors are not allowed to verify the authenticity of biofuels, leading to concerns about the integrity of certification processes.
The BBC also spoke with Balfour Beatty, a major construction company, which said it avoids using HVO due to sustainability concerns. Jo Gilroy of Balfour Beatty explained, “We just are not able to get any level of visibility over the supply chain of HVO to assure us it’s a sustainable product.”
The European Waste-based and Advanced Biofuels Association, which represents major biofuel manufacturers, has also raised alarm over the certification system, calling for “much more” to be done to ensure that non-EU biodiesel is accurately labeled.
In response to growing fraud concerns, Ireland has recently limited incentives for biofuels made from palm waste. The European Union is reportedly planning to propose a ban on ISCC certification of waste biofuels for two-and-a-half years. However, this move would allow individual member countries to decide whether to accept such certifications.
ISCC, in response to the EU’s potential action, expressed surprise, defending its role as a leader in implementing strict measures to prevent fraud in the biofuels market. The organization warned that the EU’s proposal would severely impact the entire market for waste-based biofuels.
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