Billions in damage caused by fake climate protection projects in China

2024-09-06 14:21:39

The renewable energy transport industry is sounding the alarm. Biofuel producers in particular have been making huge losses for months. The company shares some of the blame with Environment Minister Steffi Lemke (Greens): The Ministry of the Environment and the Federal Environment Agency (UBA) are frustrated with fraudulent climate protection subsidies from China, he said. Up to 9 million of CO₂ savings would have occurred. Fake climate protection projects and false biodiesel advertising caused a total damage of almost 8 billion euros.

Here are the results: the ramp-up of e-mobility is in danger; Dozens of investment projects in e-mobility such as hydrogen and biofuel companies in Germany are already on hold. The Ministry of Environment rejected the accusations as “absurd”. In addition, there is no basis for a serious assessment of financial damage and the lack of CO₂ reductions.

The warning calls come from a new initiative “Stop Climate Fraud”. About a dozen interest groups from the field of renewable energies and 40 companies have gathered whose business model is very dependent on politicians who want to promote the use of renewable energies in the transport sector. The central tool for this is the greenhouse gas reduction ratio (GHG ratio), which is mandatory for the mineral industry to reduce the CO₂ emissions of its fuels.

Against the use of dubious biofuels

To do this, fuel suppliers can use different options, such as the use of sustainable fuels and proof of greenhouse gas reduction in oil and gas production abroad. However, the credit of the so-called UE certificates will be possible until 2025; new UE projects have not been approved since July of this year.

The Lemke company made decisions from an alleged fraud involving climate protection projects in China. The Federal Environment Agency, which is responsible for monitoring, now suspects that fraud involving German inspectors is involved in 40 of 66 Chinese UE projects. On Friday, UBA announced that eight ongoing climate protection projects in China would not be activated due to “identity irregularities”. There are 215,000 tons of CO₂ for which no climate protection certificates are coming to the market. UBA continues inspections, but this is made more difficult by the fact that project sponsors have sometimes refused inspection visits to Chinese territories.

The “Stop Climate Pyramid” coalition called it “dismayed” that so far only eight projects have been evaluated in the end. It is surprising that the Environment Agency and UBA “couldn’t prevent billions in damage due to a lack of coordination with industry,” a spokesman said. The group’s opposition also focused on the way politicians and authorities are dealing with questionable oil imports from China. There is a suspicion that large quantities are not made from waste and residues, as we have said, but from fresh vegetable oil.
The Ministry of the Environment says that the Federal Government has decided to have a better prevention of fraud in the certification of biofuels at the EU level. Until now, however, we have been dealing with unconfirmed “suspected cases”. Therefore, the damage caused cannot be calculated. The figures mentioned are “at least doubtful and in some cases incorrect”.

Local transport companies are also involved

The company’s foundation estimates that 4.4 billion euros in capital are withdrawn from German companies that have invested in climate protection for transportation. The reason for this is the dramatic cost reduction in GHG share trading. The discussion of climate protection measures has led to a significant supply of GHG quotas. Here are the consequences for everyone who relies on the sale of GHG shares and thus receives a quarter of the original price.

Local transport companies that need money from the GHG quota to buy electric buses are also affected. Owners of electric vehicles sometimes record a reduction in income of 80 percent due to the reduction in the price of the GHG share. Since the lack of money for investments in the transformation of road transportation, there is also a loss in corporate income tax of about 1.3 billion euros. As another item of damage, the joint action indicates fines of 2.2 billion euros that will actually have to be paid due to the lack of CO₂ savings as a result of the fraud.

Companies and associations are demanding, among other things, that a “compensation” must be created for the lack of CO₂ savings by having the gasoline industry fill the gap by using electricity, for example. The Ministry of Environment says that certificates can only be revoked if the oil supplier knows that the certificates are fake or that they have been done with gross negligence. The investigation by the UBA and the prosecutor’s office is ongoing.