Biofuel fraud a threat to decarbonisation
Certification through the IMO will be crucial to avoid greenwashing
17 Feb 2025 News Declan Bush @Declan_LL declan.bush@lloydslistintelligence.com
Biofuel bunker fraud risks undermining shipping decarbonisation. The coming rush for supplies creates opportunities for unscrupulous suppliers, sources said
SHIPPING’S coming rush for biofuels opens the door to bunker fraud, sources have warned.
Green regulations from the EU and the International Maritime Organization are expected to increase demand for biofuels, the only drop-in option yet available to reduce emissions from diesel ships.
But not all biofuels are created equal or green. Sources said fraud could hold back the green transition.
“It’s a risk for the whole market because what can happen is you can end up with an artificially low decarbonisation cost,” said Daniel Gent, energy & sustainability manager at United European Car Carriers.
Gent said overstating or misrepresenting sustainability information on a biofuel’s feedstock could let suppliers sell at a discount.
“We would certainly welcome tighter regulations on it,” he added.
Clarksons head of green transition Kenneth Tveter said biofuel fraud was “going to be a huge problem”.
“If you look at the bio market and the supplies that we now see coming out of China, it’s biofuels that we didn’t know existed and we didn’t think was possible to be produced.
“The volumes are really, really increasing. And when you’re incentivised, when the economics are there, then people will of course do this.
“And it’s very, very difficult to distinguish between green and gray; the molecules look the same.”
Tveter said proper vetting and certification were needed.
The International Bunkering Industry Association is supporting a proposal (ISW-GHG 18/2/7) by Brazil, Japan, Singapore and shipping industry bodies for an IMO sustainable fuel certification framework.
The framework would take the form of a Marpol Annex VI amendment, to be worked out alongside the IMO’s mid-term greenhouse gas measures.
“It’s a very critical part of the governance regime that’s going to be needed,” IBIA IMO representiative Edmund Hughes said in an interview.
“It’s got to be done in theory on a global basis, and that’s a huge challenge.”
Hughes said failing to get on top of fraud risk would see the IMO’s credibility “shot to pieces”.
“There will be huge distortions in the market introduced because of the differential costs of these fuels,” he said.
Hughes, a former head of air pollution and energy efficiency at the IMO Secretariat, said the regulator needed a way to recognise and verify biofuel certification bodies like the ISCC.
The document is among those put forward at this week’s intersessional working group on GHG emissions. But it may not get much discussion time given the IMO’s bulging workload.