The UK government іs investigating the fast-growing green fuel known as HVO diesel, amid claims оf large-scale fraud.
HVO, оr hydrotreated vegetable oil, іs increasingly used іn transport and events like music festivals. It іs promoted as a low-emission alternative tо fossil diesel, cutting carbon emissions by up tо 90% when made from waste such as used cooking oil.
However, industry whistleblowers say they believe virgin palm oil іs being falsely labelled as waste and used іn significant quantities. This would undermine the fuel’s environmental benefits and contribute tо deforestation and climate change.
Whistleblowers Say Virgin Palm Oil Is Being Mislabelled
HVO’s sustainability relies on using waste materials like used cooking oil or palm oil production residues. But insiders claim that virgin palm oil — which is not classified as waste — is being used instead and fraudulently relabelled.
One major European biofuel producer described this palm oil as “flooding the market like cancer,” adding that companies feel pressured to take part in the deception to stay in business.
A former trader described buying several shipments supposedly labelled as palm sludge, but believes they were actually virgin palm oil. When they raised concerns with a board member, they were told not to pursue the matter, as “the evidence would be burned.”
Reported Waste Usage Far Exceeds Global Supply
Data from industry and trade sources casts doubt on the availability of palm sludge waste used in HVO. In 2023, the UK and EU reported using around two million tonnes of this waste in fuels.
But global production of palm sludge waste is estimated at just over one million tonnes per year. The gap suggests that non-waste materials, like virgin palm oil, may be used to meet rising demand for HVO and other biofuels.
Experts note that the two materials are chemically identical, making them difficult to distinguish. Although there is no documented proof of fraud, the numbers strongly indicate inconsistencies.
Certification Systems Under Pressure Over Oversight Limits
Biofuels like HVO rely on independent certification schemes, such as those run by ISCC, to confirm that the raw materials are genuinely waste.
While certification is well-established in Europe, oversight is far more limited in countries such as China, Indonesia, and Malaysia — major sources of feedstock. In some regions, foreign inspectors are not allowed, leaving local auditors to monitor compliance.
These limitations have raised concerns among companies and watchdog groups. Some large firms have opted out of using HVO due to the lack of transparency in its supply chain.
Authorities Consider Measures Amid Industry Pushback
In response to ongoing concerns, Irish authorities have recently restricted incentives for fuels made from palm oil waste. Meanwhile, the EU is expected to propose a temporary ban on the use of ISCC certification for waste-based fuels, potentially lasting two and a half years.
The certification body has pushed back against the proposal, stating that it has long enforced strict standards to prevent fraud. It warned that suspending certification could severely disrupt the market for waste-based biofuels.
