With the recent scrutiny over the use of biofuels in Europe, the EC has allegedly considered suspending the recognition of specific certifications by the independent certification company ISCC. On 28 March 2025, the ISCC responded questioning the legal basis of the planned action while also encouraging further dialogue between the parties.

The EC Committee on the Sustainability of Biofuels, Bioliquids, and Biomass Fuels has not released any formal statements although the ISCC press release suggested the plan involved suspension of ISCC EU voluntary scheme recognition for waste-based biofuels for a period of 30 months. The planned action would require Member State approval and is subject to further legal scrutiny.

Why is this important?

For biofuels used to meet renewable targets as part of the Renewable Energy Directive, particularly in transport (Renewable Energy Share in Transport, or RES-T), the EU requires that the claimed volumes of biofuels are recognised as compliant by a voluntary scheme. Voluntary schemes are run privately but are approved by the EU to show the sustainability of sourced fuels. This involves voluntary scheme representatives performing audits of the relevant supply chain, from the origin of the raw materials up to the fuel producer, or trader.

Why waste biofuels?

While crop biofuels are acceptable for the purposes of meeting renewable targets, there are often limitations placed on their usage. In contrast, waste biofuels are seen as more sustainable as there are no concerns about competition for food resources as well as synergies with waste treatment processes. As a result, many Member States restrict crop biofuel claims, often by implementing caps, while waste biofuel is treated favourably including via double counting.

This leads to a preference for waste, and market premiums for waste over crop biofuels. Much of the controversy which has arisen in recent years involves the mislabelling of crop biofuel as waste biofuel; this was one of the factors in the recent EC decision to apply duties to Chinese biodiesel imports, where palm oil feedstocks (crop) were mislabelled as used cooking oil (waste).

The ISCC was the voluntary scheme for many of the offending actors, hence the alleged proposed suspension by the committee. The ISCC countered that they had implemented some of the most strict and effective measures in the market and actively supported the Commission’s investigations of fraudulent biofuel activities.

What is the market scope for this decision?

While there are other voluntary schemes for waste biofuels, ISCC is the dominant scheme for such fuels accredited in the EU. It is not clear other schemes could readily step in to meet demand, a point which the ISCC made clear:

“We do not see alternatives to ISCC EU with better or even comparable market fraud prevention mechanisms. Moreover, other voluntary schemes would not be able to fill the gap” – ISCC

It is difficult to estimate the market share the ISCC has for waste biofuel claimed in Europe. In Ireland, ISCC volumes used in the domestic Renewable Transport Fuel Options (RTFO) scheme in 2023 amounted to 95% of the total claims, although this is for all biofuels and Ireland is likely an outlier. However, given the dominant position of the ISCC in certification, they are expected to be responsible for certifying most of the waste biofuel volumes claimed in Europe.

For the actual amounts of affected biofuels claimed in the EU, we can refer to SHARES data, with the most recent data related to 2023. The feedstocks for waste biofuels comply with the RED Annex IX, both Parts A and B. The biofuels from RED Annex IX feedstocks (referred as ‘Biofuel Annex IX’ below) accounted for approximately 7.5 mtoe, approximately 37% of the renewable energy in transport.

Based on our previous estimate of ISCC covering over half of this market, ISCC certified waste biofuels are expected to have accounted for at least 3.7 million tonnes of renewable fuel claims in the EU in 2023, with 2024 and 2025 numbers likely similar. The monetary value for this amount is expected to be more than EUR 4 billion at the prevailing unit prices.

A possible remedy?

The European Board of Biodiesel (EBB) in February released a set of proposals on how to improve the verification of biofuels and combat some of the fraudulent import practices, including those that led to the EC mulling the ISCC EU suspension. One of the suggestions was a requirement for production facilities to declare capacity and expected output.

This could mitigate the issue of mislabelled feedstocks: as waste feedstocks are limited, a sudden increase in the production of a facility’s production would raise red flags, suggesting the substitution of more common and cheaper crop feedstocks. It is not without drawbacks; primarily placing larger administrative burdens on producers and voluntary schemes.

What about biomethane?

While biomethane can be made from waste, it is not immediately clear whether the proposed suspension would affect biomethane production plants certified by ISCC. Biomethane is considered a biofuel in most contexts; bioLNG meets the biofuel definition of the RED II, while biomethane from waste (regardless of form) complies with the “advanced biofuel” definition.

However, biomethane usage claimed in Europe almost exclusively comes from within Europe whereas most of the misleading claims which have led to suspended accreditations for biofuel have originated from production facilities abroad. It is possible a carve-out could be made in the suspension of certified biomethane facilities. Nevertheless, such an action while niche could raise the ire of the World Trade Organisation as protectionist action.

Future releases from the EC will provide the clarity needed for the biomethane sector.

Market Impact

If the suspension of the ISCC EU goes through, this would restrict the supply of waste biofuels, in particular biodiesel and renewable diesel. This would be bullish for pricing, and for other voluntary schemes such as REDcert and RSB. For waste biofuel facilities currently certified under ISCC EU, it is anticipated that they would be given a grace period to seek accreditation under an alternate scheme. It should be noted that ISCC EU certificate validity is twelve months, and it seems unlikely any transition period will be shorter than this.

Another question mark is whether the other voluntary schemes can ramp up their accreditation capabilities to cover any void left by the potential ISCC suspension. As previously suggested, the ISCC EU scheme is likely responsible for over half of the accredited volumes of waste biofuel used in the EU. While this represents a significant opportunity for alternative schemes, this is potentially a huge burden for the accreditation industry.

The proposed action against the ISCC also reflects general uncertainty in the biofuel sector and with this doubt over ambitious European renewable transport targets. While biofuels are heavily relied upon to meet renewable energy and decarbonisation targets, parallel efforts to promote hydrogen, electric vehicles, and the phase-out of internal combustion engines increasingly frame biofuels as a transitional, temporary solution. This is leading to reluctance of investment in production facilities. Already, there is pressure for REFuelEU aviation targets to be reduced given difficulties ramping up bio-SAF production, a paucity in accreditation services will only add to this.