The UK government is investigating potential fraud involving HVO (Hydrotreated Vegetable Oil) diesel, a growing green fuel, amid allegations that it may not be made from waste materials as claimed. Sources close to the situation told the BBC that there are concerns over the use of non-waste products, such as virgin palm oil, being falsely labeled as waste.
HVO, which is gaining popularity as a transport fuel and for powering events like music festivals, is promoted for its potential to reduce carbon emissions by up to 90%. Proponents of the fuel claim it is made from waste sources like used cooking oil or palm oil sludge. However, industry whistleblowers have raised alarms, suggesting that large quantities of what are being sold as waste products are actually fresh palm oil, a key ingredient in HVO.
The BBC’s investigation, including data shared with the UK’s Department for Transport, highlights concerns over one of the main components of HVO: palm sludge waste. According to the data, Europe used more palm sludge in biofuels than the world can likely produce. This discrepancy has prompted further questions about the authenticity of HVO’s green credentials.
The Department for Transport has stated it takes these concerns seriously and is working with stakeholders and international partners to gather more information.
HVO is widely regarded as a “wonder-fuel” because it can be used as a 100% substitute for diesel, helping reduce emissions. UK consumption has surged, from 8 million liters in 2019 to an estimated 699 million liters in 2024. Its popularity depends heavily on the assumption that it is made from waste materials, but whistleblowers suggest that virgin palm oil is being used instead.
If this is true, it would have significant environmental consequences. Virgin palm oil is linked to deforestation in tropical regions, which contributes to climate change and threatens wildlife such as orangutans.
One European biofuel manufacturer told the BBC that palm oil is flooding the market, and companies are forced to pretend they are using waste materials to stay competitive. A former biofuel trader also spoke about buying cargoes of virgin palm oil that were incorrectly labeled as palm oil sludge. The trader said attempts to alert company leaders about the issue were ignored.
Data from campaign group Transport & Environment, analyzed by the BBC, suggests that the UK and EU used around two million tons of palm sludge waste for HVO and other biofuels in 2023. However, the world can only produce just over one million tons of this waste annually, further suggesting the use of non-waste palm oil to meet growing demand.
Dr. Christian Bickert, a German biofuel expert, said that palm sludge and pure palm oil are chemically identical. He believes much of the HVO made with these “waste” materials is fraudulent, pointing to the mismatch between production and reported usage figures as evidence.
Biofuel certification systems, such as those managed by ISCC, are supposed to ensure that biofuels are made from legitimate waste sources. However, the certification process is difficult to oversee in countries like Indonesia, Malaysia, and China, where the raw materials for HVO are sourced. Dr. Bickert noted that ISCC inspectors are not allowed to visit China, meaning they rely on local certification companies to verify the supply chain.
Several companies have expressed concerns about the sustainability of HVO. Construction firm Balfour Beatty, for example, has opted not to use the fuel, citing a lack of transparency in the supply chain. Jo Gilroy of Balfour Beatty explained that the company could not gain sufficient assurance that the fuel is truly sustainable.
The European Waste-based and Advanced Biofuels Association, which represents major biofuel manufacturers, has called for urgent improvements in certification and verification processes. In light of these concerns, Irish authorities have recently restricted incentives for fuels made from palm waste, and the EU is considering a two-and-a-half-year ban on ISCC certification for waste-based biofuels.
The ISCC has expressed surprise at the EU’s move, defending its record on fraud prevention and transparency in the biofuels market. The organization warned that the proposed ban could severely impact the market for waste-based biofuels.
As the investigation continues, the future of HVO and its environmental claims remain under scrutiny.
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