The UK Government has launched an in-depth investigation into the environmental and commercial validity of so-called green diesel following claims of widespread fraud. Several operators are allegedly misrepresenting high-emission fossil fuels as environmentally sustainable alternatives, raising questions over regulatory loopholes and enforcement failures within the renewable transport fuels sector.
Green Diesel: Definition, Claims, and Regulatory Oversight
Green diesel, often confused with biodiesel or hydrotreated vegetable oil (HVO), is marketed as a sustainable, lower-carbon alternative to traditional diesel. Unlike first-generation biofuels, it is typically derived from waste oils or synthetic processes with the goal of reducing lifecycle CO₂ emissions.
Currently, green diesel is subject to Renewable Transport Fuel Certificates (RTFCs), a UK government incentive scheme. Under this framework, producers can trade RTFCs for revenue, providing a financial motivation to certify their fuel as renewable. However, insufficient auditing and a lack of robust traceability are creating vulnerabilities ripe for exploitation.
The Alleged Fraud Mechanism
Insiders have reported multiple cases where regular fossil diesel or virgin palm oil is being fraudulently passed off as green diesel to claim RTFCs. This manipulation not only undermines climate goals but also distorts the fuel market by allowing non-compliant operators to undercut legitimate suppliers.
Key components of the suspected fraud include:
- False Documentation: Certificates of origin and sustainability declarations forged or duplicated.
- Blending Deception: Low-percentage biofuel blends labelled as 100% renewable diesel.
- Shell Company Chains: Complex supply chains involving intermediaries to obscure the true origin of fuel batches.
Industry-Wide Implications for Fleets and Fuel Buyers
Hauliers, logistics companies, and fleet managers relying on green diesel as part of their decarbonisation strategy are now facing reputational and regulatory risks. Purchasing fuel with falsified credentials could result in penalties and undermine Scope 3 emissions reporting credibility.
Fleet operators are advised to:
- Audit Suppliers: Demand transparent supply chain documentation and third-party verification.
- Use RTFO Registers: Verify if suppliers are listed in the Renewable Transport Fuel Obligation supplier register.
- Adopt In-House Fuel Monitoring: Track emissions performance to detect anomalies that may indicate fuel mislabelling.
A Department for Transport spokesperson said: “We take the concerns raised seriously and are working with stakeholders and international partners to gather further information.
“Fuel regulated under our schemes is subject to robust checks. If evidence of fraud or non-compliance is found we have powers to withhold or revoke certificates, issue civil penalties and, where appropriate, refer the matter to the relevant authorities.”
Risks to Net Zero Targets and Policy Integrity
The exposure of fraudulent green diesel practices threatens to derail the UK’s legally binding carbon budgets. Road transport is one of the largest contributors to UK greenhouse gas emissions, and fake emission reductions through counterfeit fuels may result in significant shortfalls.
Unless corrective measures are implemented swiftly, investor confidence in renewable fuel markets may erode, deterring innovation and jeopardising the transition to cleaner transport solutions.
Recommendations for Transparent Fuel Procurement
To safeguard compliance and environmental integrity, fleet and procurement managers should adhere to the following best practices:
Legislative Momentum and Future Enforcement Outlook
Policy amendments are expected in the 2025 revision of the Renewable Transport Fuel Obligation. Likely updates include digital certificate management, stricter fuel chain audits, and new offences targeting intermediary misrepresentation.
The DfT has signalled that non-compliant actors may face criminal charges, including fraud under the Fraud Act 2006. Additionally, a new licensing requirement for renewable fuel traders is under consideration to provide better scrutiny of actors entering the market.
Statement from AFC Energy: “The recent launch of a UK Government investigation into the real materials within HVO diesel is a concern.
“It backs up what we have been hearing from partners in the construction industry that companies are shying away from using the fuel source.
“HMO can be used as a substitute for diesel and is often touted a cleaner alternative given it is made from waste materials like cooking oil.
“However, industry whistleblowers have said that large amounts of these materials are in fact virgin palm oil, falsely labelled – which throws up its own climate and environmental concerns – and this is now being investigated by Government.
“AFC has long said that the construction industry needs a viable and cost-effective solution to decarbonise polluting diesel generators.
“Our new Hy-5 product, launched by @Hyamtec does just that – providing the industry with the world’s first containerised, portable, ammonia cracking module capable of producing up to 500kg/day for delivery from 2026.”
The green diesel fraud allegations expose systemic weaknesses in the UK’s renewable fuel regulation. If left unchecked, these practices will distort climate reporting, threaten genuine decarbonisation efforts, and penalise ethical suppliers. A rapid, coordinated response from government, industry, and enforcement bodies is imperative.
Operators must act now—through diligent fuel sourcing and transparent emissions tracking—to remain compliant, competitive, and environmentally accountable in the face of increasing regulatory scrutiny.
