Loopholes and scams dog ‘green’ energy

1st April 2008
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Green energy is coming under pressure to clean up its act after severe criticism of the Government’s attempts to change the rules on how renewable energy is calculated and further condemnation of the ‘splash and dash’ trading scam in biofuels.


As The Ecologist revealed in March last year, most biofuels are neither green nor efficient. Yet they are subject to US subsidies that have helped support the industry’s growth and push up grain prices worldwide. These subsidies are the cause of a trading scam that is believed to be affecting up to 10 per cent of biofuel exports from the US to Europe.

The scam, dubbed ‘splash and dash’, involves shipping biodiesel from Europe to the US where a ‘dash’ of fuel is added. This allows traders to claim 11p per litre of US subsidy for the entire shipment (a litre costs between 15p – 80p to produce depending on the price of the crop). The fuel is then shipped back to the EU and sold for low prices that undercut the domestic market.

Although this process is not illegal it is in clear contradiction to the aim of the subsidy and the additional shipping adds considerable pollution, exploiting a process designed to reduce it. The EU has been asked to take action as British, German and Spanish producers are in financial trouble at a time when biodiesel prices remain high.

Renewables loophole

Meanwhile the British government has suggested that UK funded wind farms built outside the UK should count towards the UK’s renewable target.

The move, announced by business minister Lady Vadera at a closed session of the energy council is being seen as a way of diluting the UK’s commitment to renewable energy generation and promoting nuclear energy. The two forms of electricity generation are in competition for government support and infrastructure. 

John Sauven, director of Greenpeace, was reported in the Guardian as saying: ‘This would allow a UK minister to lay the foundation stone of a power station in China and say it counts as our contribution to European renewable energy targets.’

It is unclear if the government wants their idea to cut both ways. If so foreign funded windfarms such as those planned by E.on in Cornwall would count towards German renewable targets rather than UK ones.

This article first appeared in the Ecologist April 2008


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