Shareholders in biofuels business Green Generation blame Government policy and fraud for the problems that forced it to hand over control to a creditor on Tuesday.
State-owned Irish Strategic Investment Fund (ISIF) appointed Shane McCarthy and Cormac O’Connor of accountants KPMG as receivers to Clonbio Green Gas Ltd, trading as Green Generation, at the company’s invitation.
The business, which employs more than 50 people, owes the State investor €12 million, which is secured against its assets.
Receivers can keep companies in their charge trading if they believe this is in the creditor’s interest. The ISIF gave no indication of its plans on Tuesday.
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Speaking after the news emerged, Billy Costello, director and co-founder, said Green Generation found it increasingly difficult to compete against cheap biofuel imports from China and southeast Asia, which many in the industry warn are probably fraudulently labelled.
Green Generation produces biomethane gas from farm waste, but businesses seeking to comply with Government regulations, including the renewable transport fuel obligation, opt for the cheaper imports.
Mr Costello explained that imported biofuel costs plunged 60 per cent between 2022 and last year. “Nobody can keep up with that class of a drop,” he said.
Government policy has aggravated the problem, according to Mr Costello.
Transport fuels rules oblige suppliers to ensure that 25 per cent of the petrol and diesel they supply is renewable, but that falls by two thirds if they use reprocessed waste oil, making imports more attractive.
Darragh O’Brien, Minister for Transport, has pledged to review this.
[ Eamon Ryan to raise fears of biofuel import fraud with EU committeeOpens in new window ]
Manufacturers fear that biofuel suppliers from China and other Asian countries are passing virgin palm oil off as reprocessed waste in breach of EU regulations
Palm oil is not classed as sustainable as its production requires large scale deforestation.
Huge growth in processed, waste cooking oil from the region have sparked suspicions of fraud and led European certifying bodies to refuse to endorse some Asian producers.
Mr Costello pointed out that Indonesia used to produce just 300,000 tonnes of waste oil every year.
“But for the last two years, they have been exporting five million tonnes,” he said.
“The Indonesian government now says they have a shortage of palm oil in the country.”
Mr Costello argued that it the only conclusion to draw was that exporters were substituting palm oil for waste.
Grain processor Clonbio, a 50 per cent shareholder in Green Generation, said “fraudulently described biofuels being imported and dumped in large volumes into the EU, including Ireland”, continued to challenge the industry here.
Mr Costello warned that the Republic was missing out on a “huge opportunity” to use biomethane to meet its energy needs.
He also pointed out that the State itself is failing to support what could be a domestic energy industry.
“Not one Government department or State agency buys even one litre of biogas,” he said.
