Europe’s Green Fuel Fraud Problem

China's booming biofuels industry is flooding the European market with cheap, fraudulent products.

Global incentives to slash fossil fuel usage have inflated demand for biofuels, but there aren't enough feedstocks—e.g., vegetable oils, animal fats, and waste products—to ramp up output. Thus, the biofuel demand boom is incentivizing fraud across the supply chain.

These fraudulent products are undermining the effectiveness of Europe's green fuel policies, which incentivize fuels made from waste products. The European Biodiesel Board (EBB) is also sounding the alarm about the fraud, which has begin to hurt European producers.

“The EBB represents about 70% of the market and members include Cargill Inc., Bunge Ltd. and Neste Oyj. The group is among those concerned about the surge in imports into Europe,” reports Bloomberg. “The supply pressure in Europe means some biofuel plants have partially or totally halted output, and there’s even the threat of bankruptcies, according to the European Waste-Based & Advanced Biofuels Association, known as EWABA.”

Scrutiny over biodiesel supplies increased as Chinese exports to the EU spiked since late 2022. The International Sustainability & Carbon Certification (ISCC) provides certification for materials and fuels, including requirements for compliance with EU rules. The organization recently said that signs point to "a potentially dubious or fraudulent origin of these trade flows."

The EBB and the European Waste-Based & Advanced Biofuels Association (EWABA) are calling for immediate action from authorities.

Southwest Power Pool’s New Reliability Standard

A working group at the Southwest Power Pool (SPP) is studying the development of a new reliability standard that includes requirements for at least two seasons.

The study has been approved and launched, with results expected back in September. It is based on Expected Unserved Energy (EUE), a metric used in the electricity industry to measure the amount of energy consumers are expected to need, which cannot be fulfilled by the grid due to a shortfall in available capacity. EUE accounts for various factors such as the mix of generation resources, weather patterns, and demand forecasts.

The SPP Resource and Energy Adequacy Leadership team (REAL) will also consider universal accreditation of both renewables and thermal resources, which has been hotly debated. “FERC’s March decision [to initially reject the study] was made on procedural grounds but Commissioner Allison Clements echoed the concerns of renewables advocates and said SPP’s accrediting proposal was discriminator,” reports Utility Dive.

“It would cut the capacity accreditation of wind and solar resources based on historic performance, but failed to account for non-performance of other resource types,” she wrote in her concurrence.

Clements is one of the most vocal FERC chairs in regards to climate, which she believes will cause extreme weather events that will hazard the grid. She also vocalizes vocal about her support for weather-dependent resources and the use eminent domain to expand America’s transmission system to achieve green policy goals.

Based on the results of its study, the REAL team will assign responsibilities for reliability given the expected shortfalls in capacity.

Biden Admin Delays Biofuel EV Decision

The US government may delay a decision on offering tradable credits to electric vehicle (EV) manufacturers under the Renewable Fuel Standard (RFS), insiders told Reuters. They say legal challenges are a concern.

“The plan would have given EV automakers such as Tesla credits for charging vehicles using power generated from renewable natural gas, or methane collected from sources such as cattle or land fills,” reports Reuters. “The Environmental Protection Agency (EPA) last year recommended adding EVs to the U.S. Renewable Fuel Standard (RFS), which requires oil refiners to blend biofuels into the fuel they produce or buy credits from other refiners that do. Most credits generated under the RFS are for blending liquid fuels such as ethanol made from corn into gasoline. Adding credits for power generated from renewable gas and then used for charging EVs would take the program in a new direction.”

But the government now wants to split the two to avoid legal challenges to EV inclusion and avoid delaying the issuance of the next round of quotas for RFS biofuels. Those quotas are due to be finalized next month.

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Conversation Starters

1. California ditches diesel trucks. “California became the first state in the United States to approve regulation of ending diesel truck sales by 2036,” reports the Washington Examiner. “The California Air Resources Board approved the regulation called Advanced Clean Fleets on Friday, continuing Gov. Gavin Newsom's (D) plan to decrease pollution in the state. The phasing out of medium and heavy-duty diesel truck sales by the year 2036 ties into the governor's plan of having all such trucks travel in California producing zero emissions by 2045, according to a statement from the governor's office.”

2. Warm weather in western Europe worsens drought. “Spain and other parts of western Europe are expected to face unusually warm temperatures next month, offering little relief from drought risks.

   Long-range forecasts point to hotter conditions across the region, and Seville, Spain, is seen entering the month with highs well above 30C,” reports Bloomberg. “On Thursday, Spain recorded its hottest temperature ever for April, hitting 38.8C at the Cordoba airport in southern Spain, its meteorological service said. Europe already faced its worst drought in centuries last year and saw prolonged periods without rain over the winter, which was the second-warmest on record.”

3. A fire at a compressor station has reduce flows in the Gulf of Mexico region. “Last Friday morning around 1 am, storms moved through Alcorn County, Mississippi. Lightning struck a “vertical gas pipe” at the Columbia Gulf Transmission Corinth natural gas compressor station, releasing and igniting natural gas,” reports Marcellus Drilling. “One local news station characterized it as a ‘massive gas fire’ that ‘prompted county-wide response.’ The fire burned for over four hours until firefighters could put it out. Some 2.2 billion cubic feet per day (Bcf/d) of Marcellus/Utica molecules flow through that compressor station on their way to the Gulf Coast.”

Crom’s Blessing