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Federal Environment Minister Steffi Lemke is under pressure (archive) © Peter Gercke/dpa-Zentralbild/dpa
Oil companies can achieve climate targets through UER projects. But some of these projects do not appear to exist. Nevertheless, the companies are still allowed to count their certificates.
Berlin – For months, allegations of fraud in the renewable energy sector have been putting pressure on Environment Minister Steffi Lemke (Greens). The allegations concern so-called upstream emission reduction projects (UER). These are an opportunity for oil companies to achieve legal climate targets in the transport sector. Most of the projects certified by the Federal Environment Agency (UBA) are about reducing greenhouse gas emissions from oil production. In return, the companies receive certificates that they can offset against their own CO₂ emissions.
But some of the certified projects apparently never existed. This has been shown by research by the ZDF Frontal in May 2024. Since then, the ministry and the UBA have been trying to investigate the allegations. Environment Minister Lemke, meanwhile, speaks of a case of “serious environmental crime”.
Climate fraud drives companies into bankruptcy – oil giants are allowed to continue using certificates
But the damage has already been done for many companies. Companies in the renewable energy sector have lost out on investments, and according to an alliance of affected companies, the damage amounts to 4.4 billion euros. The insolvency of one of the companies that actually makes money from trading these certificates has caused a stir throughout Germany. This also includes possible cases of fraud in biodiesel, which are also currently being investigated. Research by the Time had already suggested over a year ago that fraud was also taking place with biodiesel. According to the Ministry of the Environment, there is still no clear evidence of this.
The managing director of the insolvent company, Zoltan Elek of Landwärme GmbH, made politicians aware of their insolvency hence also serious accusations: “It is important to me to stress that this procedure could have been avoided if politicians and authorities had Alleged fraud in biodiesel and UER projects pursued and combated more consistently.”
Another source of anger is the fact that the oil companies that had the fraudulent UER projects certified are allowed to continue to count these towards their greenhouse gas reduction quota until 2025. Although it is clear that at least some of the projects never existed, the companies are allowed to continue to pretend that they have contributed something to CO₂ reduction.
Ministry of the Environment confirms: Already certified UER projects must be approved
Upon request from IPPEN.MEDIA A spokesperson for the Federal Environment Ministry (BMUV) confirms this approach. “It is correct that the full crediting of UER is still possible this year. For legal reasons, projects that have already received approval must be allowed to be completed.” However, since the BMUV has stopped the UER projects since July 1, 2024 and therefore no new applications may be submitted, this is only an exception.
The spokesperson continued that it is possible to withdraw the certification of the projects “in individual cases”. “However, to do this, it is necessary to prove to a quota-obliged party that they knew that the certificates they had obtained were unlawful.” In other words, the UBA and the ministry would have to decide that the oil companies in question knew that the projects were not real. Proving this would certainly be difficult.
According to the UBA, 40 of 69 projects are suspected of fraud. The alliance of affected companies, which came together this week to form the “Stop Climate Fraud” initiative, has identified 68 suspected cases based on its own research. Certificates are to be withdrawn for eight projects, the UBA further announced. The rest are being investigated.
Lawyer argues against this: Law allows more scope for revoking CO₂ certificates
Lawyer Wolfgang Heinze contradicts the assessment of the Ministry of the Environment in an interview with our editorial team. He represents the insolvent Landwärme GmbH as a partner in the SNP law firm. “It is true that knowledge of the companies affected is essential, but the law in Section 48 Para. 2 VwVfG [Verwaltungsverfahrensgesetz, Anm. d. Red.] “There are exceptions, particularly in cases of fraudulent conduct,” he says. “But with regard to possible claims for damages by the oil companies under paragraph 3, it also plays a role how carefully the authorities have proceeded with the audit.”
§ 48 Revocation of an unlawful administrative act
An unlawful administrative act which grants a one-off or ongoing cash benefit or divisible benefit in kind or which is a prerequisite for this may not be revoked if the beneficiary has relied on the existence of the administrative act and his trust is worthy of protection when weighed against the public interest in revocation. The trust is generally worthy of protection if the beneficiary has used up the benefits granted or has made a financial disposition which he can no longer reverse or can only reverse at unreasonable expense. The beneficiary cannot invoke trust if he
1. the administrative act was obtained by fraudulent deception, threats or bribery;
2. obtained the administrative act by providing information that was incorrect or incomplete in a material respect;
3. knew of the illegality of the administrative act or was unaware of it due to gross negligence.
The question is therefore: Did the oil companies and the responsible authority, i.e. the Federal Environment Agency, check carefully enough to be sure that the oil companies provided correct information to the best of their knowledge and belief? Or was there enough evidence to suggest that the oil companies may have been grossly negligent in selecting the projects?
Experts are sure: Ministry of the Environment is avoiding legal proceedings and is thus protecting oil giants
From the perspective of lawyer Heinze, the Ministry of the Environment deliberately decided to interpret this paragraph in such a way that the oil companies could still have their allegedly fraudulent certificates taken into account. “Because if they were to withdraw the decisions, then some would certainly go to court. They are obviously afraid of these possible legal proceedings,” is his assessment.
In his opinion, it would ensure more justice and trust within the renewable energy industry if the authorities were to face the complaints. “Through legal proceedings, everything would be examined again.”
Ministry of the Environment counters: Trust of oil companies is important for climate protection
The Ministry of the Environment also sees this differently, as the spokesperson’s statement further shows. According to the statement, it is now important to regain the trust of all affected companies, including oil companies. “If market participants could no longer trust the legality of acquired, state-controlled certificates, a very high barrier to investment would be created, which would be particularly damaging for the ramp-up of green hydrogen or advanced biofuels.”
But there are also cases in which the oil companies have decided on their own initiative not to count the projects towards their CO₂ balance. One such company is Rosneft Germany. Internal documents, which were first made public by the ZDF Frontal on Friday (30 August) and the IPPEN.MEDIA are also available, show that Rosneft Germany would rather take the financial loss estimated at 50 million euros than damage its image. Rosneft Germany is currently managed under the trust of the Federal Network Agency.
