Demands for crackdown on biofuels scam

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Demands for crackdown on biofuels scam

 

_http://www.guardian.co.uk/environment/2008/apr/01/biofuels.energy_

 

US 'splash and dash' loophole undermines climate change fight_Terry

Macalister_ (http://www.guardian.co.uk/profile/terrymacalister) _The Guardian_

(http://www.guardian.co.uk/theguardian) , Tuesday April 1 2008

 

 

 

 

Trucks are loaded with sugar cane, which will be used to produce biofuels,

in Brazil. Photograph: Paulo Whitaker/Reuters

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.

_http://www.guardian.co.uk/environment/2008/apr/01/biofuels.energy_

(http://www.guardian.co.uk/environment/2008/apr/01/biofuels.energy)

 

 

Deborah Elaine Barrie

4 Catherine Street

Smiths Falls, On

Canada

K7A 3Z8

(613)284-8259

_deborah_ (deborah)

_http://www.noccawood.ca_ (http://www.noccawood.ca/)

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