High demand for used cooking oil is raising the risk of fraud, writes European NGO Transport & Environment (T&E) in a press release.

Among other industries, the shipping sector is increasingly fueling its vessels with biofuel which may be produced on the basis of used cooking oil from restaurants or hotels.

This is to comply with the new decarbonization rules by the EU and IMO taking effect from January 2024.

But as a growing volume of the cooking oil used by European companies is imported from a number of Asian countries like China, Indonesia and Malaysia, the risk of fraud also rises according to T&E..

”Virgin oils like palm are suspected of being mislabelled as ‘used’ to take advantage of the inflated value of supposedly green fuels. Several countries, including Germany and Ireland, are launching their own official investigations into fraud risks. The European Commission also promised to investigate fraudulent Indonesian biodiesel potentially transiting through China and the United Kingdom to circumvent taxes,” writes the organisation.

Europe currently imports 80% of the used cooking oil that is repurposed as fuel for cars, trucks and planes, a new analysis from T&E shows. The vast majority (60%) of these imports come from China.

The shipping sector is expected to increase its use of biofuels substantially over the coming years in parallel with the tightening of the climate rules. Biofuels are used to replace fossil fuels.