Tuesday, April 01, 2008

Biofuels scam: the "splash and dash" loophole

The phrase "splash and dash" loophole is enough to perk the interest of this blogger.

The phrase relates to an ongoing "biofuels" scam that "that exploits US agricultural subsidies and undermines the fight against global warming."

So who is exploiting who? The Guardian investigates. A quick read should anger as it soon becomes clear that the "scam" makes a mockery of a scheme intended to help the fight against climate change, not make it worse, by increasing shipping fuel use considerably.

Demands for crackdown on biofuels scam [Guardian]

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.


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