European Commission vows action after concluding probe into Chinese biofuel imports

The European Commission (EC) has wrapped up its probe into suspected fraud involving Chinese biodiesel imports flagged by Germany two years ago, uncovering certain systemic flaws and vowing corrective action.

Specifically, the EC said that it has unearthed some weaknesses in the way certification audits have been conducted, which is why the commission plans to address these issues.

As stressed by the EC, however, the evidence collected so far is not enough to confirm the existence of any fraud, due to which German authorities are encouraged to carry out further checks or investigations, should they choose to do so.

Upon obtaining a notification from German authorities in March 2023 of the purported fraud in biodiesel imports from China, the European Commission conducted an assessment of the situation, as mandated under Article 30(10) of the Renewable Energy Directive, under which the EC is obligated to decide whether a country that requests an examination request can still count that fuel toward its national renewable energy goals.

As disclosed, working together with German officials, the EC gathered input from a number of stakeholders and reviewed audit reports from the voluntary certification framework that validated the economic operators in question.

To address the risk of fraud in the biofuels market, the commission has decided to conduct a set of actions in the short and medium term, especially in areas where the Implementing Regulation on sustainability certification (EU/2022/996) can be ‘bolstered’ further.

The European Commission has reportedly also launched a working group with EU member states under the Committee on the Sustainability of Biofuels, Bioliquids and Biomass Duels to explore changes to the current legislation. As informed, the group has made solid progress on new measures aimed at strengthening fraud prevention, with a finalized legal text anticipated to see the light of day in early 2026.

What is more, according to the EC, discussions are being held with EU member countries regarding the timeline for the full mandatory deployment of the Union biofuel database. The EU global traceability system is said to already be functional and used by a growing number of operators. That said, its mandatory systemic use by all relevant businesses is described as a pre-condition for its success.

The commission has revealed that technical work on fraud prevention will continue as well as the effective sustainability certification to support the voluntary schemes with the implementation of the existing rules. As elaborated, the rules are projected to be able to tackle many of the identified cases if certification bodies apply them in a “correct and harmonious” manner.

With shipping industry off to the races to decarbonize, biofuels have emerged as a readily deployable alternative to fossil fuels. As they are compatible with existing vessel engines and infrastructure, they are seen by many as an appealing stopgap solution while zero-emission technologies like green ammonia or e-methanol remain commercially constrained.

According to Norway’s energy research and business intelligence company Rystad Energy, maritime demand for biofuels could soar to 140 million tonnes of fuel-oil equivalent by 2028.

Nevertheless, Rystad Energy has cautioned that even under ‘perfect’ conditions, total biofuel production capacity is not anticipated to peak over around 120 million tonnes, which could drop sharply to just 40 million tonnes when sustainability criteria (prioritizing cleaner, second-generation biofuels) are applied.

But, while demand presses on, maritime industry stakeholders have urged against the inclusion of biofuels from the International Maritime Organization’s (IMO) Global Fuel Standard, arguing that their environmental as well as social costs are too high.

As a coalition of 69 NGOs warned in February 2025, many first-generation biofuels rely on crops such as soy and palm oil, which are associated with deforestation, land grabs, and increased lifecycle emissions through land-use change. The NGOs, thus, underscored that including these fuels in future regulations could entrench harmful practices under the guise of sustainability.

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