Demands for crackdown on biofuels scam

Written by  //  April 5, 2008  //  Agriculture & Food, Biofuels, Europe & EU, Trade & Tariffs  //  Comments Off on Demands for crackdown on biofuels scam

More on Biofuels

April 05, 2008
Scammers see green dollars
Scam artists can smell a fad. They feed on naive enthusiasm. In the green movement, they’ve found enough naive enthusiasm to sustain them for years.
(The Ottawa Citizen) Many consumers are learning, slowly, not to be dupes. They’re figuring out how to detect the same old polluting products dressed up in green logos, or not to sink their money into dubious offsetting schemes. Consumer activism is important and useful, but only if it’s informed.
Governments, though, are still easy marks. The most embarrassing example of this is the “splash and dash” biofuels scam.
The biofuels market is largely created by governments, especially in the developed world, who are mandating that certain percentages of fuel must come from renewable sources. (Canada’s government has mandated five per cent renewable content in gasoline by 2010, and two per cent in diesel and heating oil by 2012.)
Governments create the demand, and then they encourage the supply, by subsidizing the producers.
The United States government has long been funnelling public money into agriculture subsidies, which wreak havoc on global markets. The green image of biofuels has given politicians one more reason to subsidize — and given farmers the world over one more reason to cut down forests. It has also been one factor in the frightening rise in food prices.
Depending on how they’re produced, with what use of land and fertilizers, some biofuels might not be any greener than fossil fuels.
2 April 2008
(The Guardian) US ‘splash and dash’ loophole undermines climate change fight
The EU is being urged to take action to stop a biofuel trading scam that exploits US agricultural subsidies and undermines the fight against global warming.
Up to 10% of biofuel exports from the US to Europe are believed to be part of the rogue scheme reaping big profits for agricultural trading firms.
The “splash and dash” scam involves shipping biodiesel from Europe to the US where a dash of fuel is added, allowing traders to claim 11p a litre of US subsidy for the entire cargo. It is then shipped back and sold below domestic prices, undercutting Europe’s biofuel industry.
The trade is not illegal, but flouts the spirit of producing green fuel by transporting it needlessly across the Atlantic at a time when campaigners are voicing concern about emissions from global shipping.
The producers’ body, the European Biodiesel Board, has uncovered the trade as part of its investigation into why British, German and Spanish producers are in financial trouble at a time when biodiesel prices remain high. The board will call for retaliatory action against the US over subsidies for its leading biofuel.
Biofuels are plant-based oils from crops such as soy and corn. They are expensive to produce but have become relatively cheaper as the price of crude oil has risen to more than $100 a barrel. It is estimated that 10% of the 1m tonnes of biodiesel exported from the US to Europe is part of the splash and dash trade.

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