UFOP concerned about traders shutting down due to alleged Chinese HVO fraud

In Germany, after the ADAC has withdrawn from the THG quota trading year 2024 at the end of the quota year, another company is leaving this trading business with the opening of the insolvency proceedings of EMOVY GmbH. The Union for the Promotion of Oil and Protein Plants e. V. (UFOP) assesses this and earlier insolvency proceedings of this still young industry as collateral damage to the increasing fraud cases involving imports of biodiesel and HVO from China and most recently in the spring 2025 from a non-existent HVO facility in Dubai.

The economic consequences of the fraud for the German and European biofuel goods chain are dramatically exacerbated, in particular by the double accounting of the amounts of fraud on the GHG quota obligation. The decline in the GHG quota prices to between EUR 80 and 90 per tonne of CO2 is an indicator of the exuberant “offer quantities” whose consequences can be felt down to pricing for oilseeds, emphasises UFOP. The resulting relocation effect leads to export and price pressure for biofuels. Although the statutory greenhouse gas ratio increased from 8.0% to 9.36 % in 2024, the share of physical admixtures from fossil diesel to fossil diesel fuels fell from 2.621 to 2.065 million tonnes over the same period. The main reason for this is the high proportion of biofuels from waste in accordance with Annex IX, Part A of the Renewable Energy Directive (RED II). With the cabinet decision to suspend the THG quota transmission, the former federal government had been able to pull the legal “emergency brake” for two years, but thus shifted the problem to the future. Consequently, the THG quotas collapsed. Companies that generate or generate corresponding GHG odours in the area of e-mobility are mainly affected. This value-added effect was politically wanted at the time as a contribution to the financing of the expansion of the charging infrastructure. This post is now increasingly fading.

Against this background, the UFOP urges that a suspicion of fraud be converted and sanctioned in a timely manner. In addition, the certification systems must also be more strictly monitored or taken into account in order to counteract further cases of fraud and at best to exclude them. This applies in particular to the registration of plants by the certification systems or their certification bodies. The question of observing due diligence obligations must also be examined in the sense of liability law. This concerns both the registration of the plant and the audit of the GHG calculations and raw material origins. The report of the Federal Institute for Agriculture and Food (BLE) shows a questionable GHG reduction of more than 130% for “aglogies biomass” for imported biodiesel from Ethiopian mustard.