A resort island off southern China, best known for its balmy weather and sandy beaches, has become the unlikely focus of Europe’s growing concerns over a booming waste-oil industry.
On the edge of the South China Sea, Hainan has become a green-fuel hot spot over the past year, accounting for nearly a third of the country’s biodiesel exports. The catch is that China’s answer to Hawaii has no capacity to convert used cooking oil, the most obviously compliant feedstock, into biodiesel.
According to producers, traders and analysts who held conversations on the sidelines of a conference in Singapore last week, it suggests the island may instead be serving as a transshipment hub, facilitating efforts to mix fuels with cheaper feedstock, then mislabeling the product in order to qualify for European green incentives.