LONDON, June 23 (Reuters) - An auditing company empowered by the European Union to verify sustainable fuel has suspended the certification of three Chinese biofuel exporters after an audit found the precise source of their waste products from Malaysia and Indonesia could not be verified.
Germany this month triggered a European Union investigation into a large volume of biofuels imports into Europe from China to assess whether the fuel meets EU sustainability criteria.
The Germany-based International Sustainability and Carbon Certification (ISCC), a company that verifies the sustainability of fuel, suspended the certification of two companies headquartered in the port of Yangpu on China's Hainan Island and another at Zhanjiang nearby on the mainland.
The month-long suspensions mean the companies cannot export to the EU and were detailed in audit reports posted to the ISCC's online database of tens of thousands of biofuel producers and traders worldwide. The suspensions have not previously been reported.
The companies the ISCC suspended were Hainan Hanpu Import and Export Trade, Hainan Bomi Import and Export Trading and Wuchuan Maosheng Bio-energy. The suspensions took effect in early May and June and last for a month. Wuchuan Maosheng Bio-energy's suspension finished at the end of May.
The ISCC said in audit reports that the inaccuracy of records, lack of traceability of sustainable materials and mislabeling of raw materials were the reasons for suspending the companies.
The three companies and the ISCC did not immediately respond to a Reuters request for comment.
EU incentives for biodiesel production made with waste oils and fat to increase renewable energy use have encouraged companies in Asia to mix biofuels with cheaper oils, especially palm oil and export them to Europe, according to top European industry body EWABA.
The European Waste-based & Advanced Biofuels Association warned this month that a flood of potentially "dubious or fraudulent" biodiesel imports into Europe from China could trigger the collapse of the EU's biofuels industry.
The ISCC audit documents for the three suspended firms list their raw materials as coming in part from palm oil from Indonesia or Malaysia.
Palm oil from the two countries is subject to steep European import duties because the EU does not classify palm oil as sustainable.
The Yangpu-based firms are among the largest biofuel blenders on Hainan Island, while the mainland-based company trades in biofuel with those companies, two European trade sources said. (Reporting by Noah Browning in London Editing by Simon Webb and Matthew Lewis)
