Europe’s focus on green fuels has helped spawn an industry in China that collects, recycles and ships waste such as used cooking oil, but this influx of biofuels is now threatening European producers and raising fears of fraudulent exports, Bloomberg reports.

European Union manufacturers are worried they are being outclassed by Asian companies that mix fuels with cheap raw materials and mislabel them to qualify for incentives under the bloc’s renewable energy programs.

These concerns are highlighted by the explosion of Chinese biodiesel exports to the EU. In parallel, China’s imports of palm residues from Indonesia and Malaysia have increased, which according to some industry sources are far too high, generating concerns that these imports could also include other ingredients. Deliveries to the EU affect biodiesel prices and operating margins for local producers, so some are forced to stop production, according to Agerpres.

The delivery of biofuels in the EU is an attractive business as fuels produced from residues are sold at higher prices than those produced directly from agricultural crops. The problem is that it is difficult to check the biodiesel mix.

In the case of “an already refined product, which has been chemically transformed into biodiesel, it is practically impossible to know which raw material was used,” says the secretary general of the European Biodiesel Board (European Biodiesel Board), Xavier Noyon. “You have massive inputs of premium products that arrive on the EU market at very low prices. Probably also because they are not produced from real raw material. At least we suspect so,” added Xavier Noyon.

EBB represents approximately 70% of the biodiesel market and its members include companies such as Cargill Inc., Bunge Ltd. and Neste Oyj.

Supply-side pressures in Europe have caused some biofuel plants to partially or totally stop production and there is even the threat of insolvencies, according to the European Advanced and Waste-Based Biofuels Association (EWABA).

“Both big and small players are suffering. Markets always have ups and downs but what is happening now is unprecedented,” says EWABA General Secretary Angel Alvarez Alberdi.