The European green oil industry is concerned about massive and potentially fraudulent imports of biofuels from Asia. This fraud consists of importing so-called “used cooking oil biofuels” which are in fact biofuels made from virgin palm oil.
Jean-Philippe Puig is the CEO of Avril
Have you ever heard of the cobra effect? It is the threatening name used by specialists to describe an unintended economic phenomenon, whereby a public policy produces effects that are precisely the opposite of what it was designed for. The cause : the opportunistic reactions of economic players to the new mechanism.
Where does this venomous name come from? During the British Empire, India was infested with cobras. The colonial administration, in favour of using economic incentives, proposed a reward to anyone who brought back dead snakes.
The measure was initially a success and the local population developed an interest in hunting. After a few months, however, the number of cobras increased sharply again: motivated by the reward, some cunning inhabitants began breeding cobras to trade them. The reward was suspended, some of the reptiles were released, it was a disaster. The “cobra effect” was born.
A boom in biofuels
Today, the circular economy is an absolute necessity. Sustainability requires us to view yesterday’s waste as co-products, and to recycle everything that can be . Avril, like many other actors, has long been committed to this approach. However, this new economic situation is producing side effects that we can no longer ignore.
The latest example is used cooking oils. The oil collected from restaurants is deemed to be carbon neutral, according to European regulations, since it has already been used for frying. Fuels made from this raw material should therefore be encouraged. This is understandable: while this oil was destined for waste , we are giving it a new life as an energy source.
Used oils are sold at a very high price since they make it possible to produce fuels that are, on paper, even more sustainable. This is precisely the threat of the cobra : when selling the used product becomes more attractive than selling the virgin product, what is the point of respecting its normal life cycle?
This is what is happening with oils coming from Asia, which are falsely labelled as used, and which have seen a staggering increase in imports into Europe in recent months. Palm oil is being disguised as used oil so that it can be counted towards the European and national renewable energy targets .
This mechanism makes it possible to bring unsustainable raw materials, that we no longer want to use, into Europe: used oil is the disguise of palm oil, and the true face of fraud.
When will the European authorities realise the scale of the problem? When will they apply safeguard procedures to curb this economic and ecological disaster?
It is high time that the Commission, which has told us it has been investigating this issue for several months, take concrete measures to put an end to this fraud. It must suspend imports and sustainability certificates for fraudulently imported raw materials and biofuels. We must also put a stop to the double- counting of used oils, which makes it possible to achieve decarbonisation targets artificially, while encouraging fraud. The integrity and credibility of European policy in the fight against climate change depend on it.
Meanwhile, the cobra is spreading its powerful venom into the global oil markets, driving down the prices paid to European farmers for their oilseeds. It is high time to mesmerize the snake.