Get News & Views Updates
Most Popular This Week
Popular content
Today's Top News
Demands For Crackdown On Biofuels Scam
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.
Doug Ward, director of a Scottish biofuel company and British representative on the board, said a full report on the impact of US fuels would be finalised within days. It is expected to recommend that the European commission initiate an anti-dumping action against Washington for the subsidy. "We could have sold our product cheaper if we took it over to the US and brought it back," he said. "No one is doing anything illegal, but environmentally it's a disaster," he said. The cheap cost of shipping makes the trade profitable for those involved.
Ian Waller, a biofuel consultant at the firm FiveBarGate said he visited the southern states of the US last October and spoke to firms about splash and dash.
"You get the subsidy for the act of blending, so people are bringing boats of soy or palm-based biodiesel from Europe and then mixing it with a bit of local biodiesel - or even fossil-fuel diesel - and then shipping it back," he said. US producers worried about the trade also call it the U-boat trade because vessels arrive and then almost immediately return, he said.
Andrew Owens, chief executive of Greenergy, a biofuel supplier part-owned by Tesco, said his company was doing all it could to eliminate the rogue practice. "We are rigorous about our supply chain and careful about where we source bioethanol and biodiesel, but it can always sneak in if we have to buy a one-off cargo in Rotterdam to fill a gap ... We try and avoid splash and dash at all costs," he said.
The European Biodiesel Board has been encouraged to act against subsidised US exports of biofuel because Britain and other European countries have complained that their industries are being destroyed. Producers are concerned the US is flooding the market with subsidised fuel when facilities are standing empty in Germany. D1 Oils, a Teesside-based biofuel business, is considering halving its workforce due to the problems caused by US imports.
A competitor, Biofuels Corporation, was taken off the stock market after suffering its own problems, but BP said it was pressing ahead with a biobutanol plant at Hull in cooperation with Associated British Foods.
In a fortnight Britain will introduce demands that 2.5% of all petrol and diesel is made up of non-carbon fuels. The rules will require companies to provide information about sourcing their biodiesel, potentially cutting out splash and dash.
© 2008 The Guardian
Comments
Note: Disqus 2012 is best viewed on an up to date browser. Click here for information. Instructions for how to sign up to comment can be viewed here. Our Comment Policy can be viewed here. Please follow the guidelines. Note to Readers: Spam Filter May Capture Legitimate Comments...
12 Comments so far
Show AllOne of the many examples of why issues of energy and climate policy can only be effectively administered and enforced by international agreements. Leaving it up to profit-making companies and the governments that do their bidding will never work.
Unbelievable. Where do these scammers hope to spend the profits? On Mars?
Zoya- Why dear, don't you know? They will be able to spend their wealth in heaven after the Rapture...
… RUPTURE
They are not biofuels scams. They are scams involving capitalists (people) and consumers (people). The capitalist offers the opiates and the consumer consumes them without concern about the external costs.
So let's stop deflecting the blame upon inanimate objects - biofuels. Put the blame squarely where it belongs on the PEOPLE who take the ACTIONS without responsibility. If you don't like what the capitalist is doing STOP DOING BUSINESS WITH THE CAPITALIST and focus your activism on reigning in the general racket of enslavement/profit/plunder.
Here's something to look at. At first galnce it looks promising (but I haven't really checked it out yet).
Vertigro: http://www.valcent.net/s/Home.asp
It uses algia growing in a closed system.
Isn't 'splash & dash' a classic example of 'bait & switch'. Why shouldn't this scam be considered illegal? Other more efficient systems than fossil fuels, nuclear, & corn ethanol are proven, yet the funding to move us REALLY forward on energy independence is being squandered on these three.
Galen & namaste, I'd write it, "They will be able to spend their wealth in heaven after the Rapture (rupture)", so these throwbacks will know exactly what I mean.
Zoya, could Cheney have picked a more appropriate front man than DuhBya. George Bush for king...of Mars? Think about it God of war, champion of red staters, beedy eyes & pointy ears, The Great Satan, blood on his hands, torturer, deceptive, compared with Hitler, compulsive liar, greedy, arrogant, while people starve and/or become homeless willing to spend billions to get to Mars...Oh! My! God!...George Bush is the devil!!! No news here folks. Nothing to see...move along now. ;-)
What fascinates me, is analysis of his gaffs as clearly they occur when he's attempting to fit in and act like he cares about people and has real feelings -- which is the utmost of challenges for a psychopathetic loser. Especially his famous avoidance of "shame on me" -- which cannot be uttered because it is not possible -- so he ad libs non-english drek instead.
All indications are that he is clear and precise as a laser cutter when he can open up about killing his enemies, building bigger and better weapons, and torturing "terrorists" -- none of which his handlers would ever allow to see the light of day.
He needs a new wardrobe with a
short leash and
really long sheaves
(with straps on the ends)
Namaste
8 postings and we are not even taking about the topic but personal attacks on GB.
It looks like the laws have to be changed to stop the dumping practice. Again if something is shit the word america is mentioned. Capitalism only works on this level as long as the laws and countries involved allow it. Bio fuel does not have to have to be made from corn but any plant that has chlorophyill in it.
The low costs to produce bio fuels is cheaper than sucking oil out of the ground and this is why this bio fuel scam practice is going on.
The gas industry charges the same rate for a barrel of bio fuel as a barrel of oil. Now a farmer growing sugar cane in Brazil and CUBA ( they don't use corn that is a food) takes the sugar OUT of the cane then uses the rest of the plant to produce alcohol. It is just a big Tennessee moonshine operation. They then add a gallon of gas to the barrel of alcohol and it is called ethanol since it is undrinkable at that point. From all the info I could find ( correct me if I am wrong) it cost about about a ONE dollar to produce a US gallon ( 3.8 litres) of alcohol from cane or just about any clorophill ( green ) plant. PLUS in the USA they use corn that uses MORE fertilisers than sugar cane. Fertiliser is a petroleum based product SO the oil industry still makes a profit there as well.
@rtdrury: that was an astute observation :)
"The love of money is the root of all evil."
The waste of human intelligence on GRQ (Get-Rich-Quick) schams just belies the fact of human intelligence actually being anything like superior.
These fucking idiots should have their mouths duct-taped to exhaust pipes!
'Fat Lady has sung', you are right - the fact that growing corn requires fertilizers that in turn require petroleum as feedstock is not mentioned as much. The enormous amounts of land and water required is also not mentioned. Nor is the fertilizer run off into rivers and other water bodies. There is a simple concept called 'net efficiency' - that is, how much resources were consumed to produce a given amount of product. Biofuels should NEVER be considered as a large scale solution. Apart from diverting corn from food to fuel (raising food prices globally) it also leads to more deforestation. Europeans can pretend all they want that they are taking care that this doesn't happen - but the fact is, it does happen - originally in Brazil, now in Malaysia and Indonesia. If you think about it, all the talk is about the 'supply side' - biofuels, nuclear, clean coal, etc. - how to 'supply' more. Very little consideration is given to 'demand side management' - that is, cutting down on energy use. Investing in efficient and affordable public transportation, for example, can be done with existing technology, will provide jobs, less fuel burned per person per mile, etc. Cutting down or eliminating meat consumption will free up so much resources as well.