Growing doubts over imported UCO

21 Apr 2021

London (Quantum Commodity Intelligence) - New research questions again the environmental impact of rising imports of used cooking oil (UCO) into Europe and warns the double-counting of emission credits generated from the product will entice fraud.

Such is the demand for waste oils in Europe that imports now account for more than half of the UCO that's made into fuel.

To boost the consumption of supposedly lower-carbon biofuels, many countries, such as the Netherlands and the UK, allow double-counting of credits generated from displacing fossil fuel with used cooking oil products.

Since these feedstocks are not made directly from crop products such as rapeseed, soybean or palm oil they are deemed more environmentally friendly, especially bearing in mind the potential indirect effects of economic incentives to clear carbon sink peatlands and rainforest to create new cropland.

But the study from Transport and Environment warns the criteria of sustainability is hard to prove, chiefly because of concerns the imported UCO is really a waste product, which will vary from region and country.

“UCO is also used in other industries such as oleochemical and outside of Europe for animal feed, such as in China and the US,” the study points out.

“There is only so much volume of UCO that can be generated on the basis of how much vegetable oil people and industries consume.”

“More than half of the UCO used in Europe is imported, but producing countries also need to decarbonise, if all countries are to meet the objectives of the Paris agreement.”

Steep rises in carbon-cutting targets to raise demand

Europe imported 1.5 million mt of UCO from China, the US, Malaysia and Indonesia in 2019.

China supplied over a third (34%) of Europe’s UCO imports while almost a fifth (19%) came from major palm oil producers Malaysia and Indonesia combined.

By 2030, European demand for UCO could more than double from the current demand of 2.8 million mt to between 6.1 and 6.4 million tonnes as EU countries strive to meet targets for renewable fuels in transport, according to analysts group CE Delft.

“Provided the difficulties to fully guarantee the sustainability or the veracity of the UCO batches (and the complexity increases if the feedstocks are produced outside of Europe, as it is harder to track and trace), it is not possible to conclude that all the UCO used in Europe is sustainable.”

The double-counting of credits could entice fraud, with suppliers artificially increasing the volumes of UCO available to the market by mixing it with virgin vegetable oil.

Former employees of the producer Biodiesel Kampan are currently under investigation in the Netherlands, suspected of forging the sustainability certificates, Transport and Environment point out.

Concerns of diluting UCO to boost volumes were identified by the European Court of Auditors in 2016.

New schemes seek to improve the reliability of certification 

The European Commission has asked for an EU-wide scheme to provide improved tracking and certification for biofuel and feedstock supply chains to be in place by the end of 2022.

One such scheme is Bioledger, set up by former Greenergy head of sustainability compliance Patrick Lynch, which hopes to leverage blockchain and GPS tracking technology to close the gaps allowed by current certification systems.