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Wants restrictions on “substances that are very dangerous”: Environment Minister Lemke (Greens). © Georg Wendt/dpa
Fraud cases in the renewable energy sector are causing billions in damages. Despite the allegations, oil companies are still allowed to use their controversial certificates.
Berlin – Green Environment Minister Steffi Lemke has been facing allegations of fraud in the renewable energy sector for months. At the heart of the allegations are the so-called upstream emission reduction projects (UER), which oil companies use as a means of achieving legal climate targets in the transport sector. Most of these projects, certified by the Federal Environment Agency (UBA), aim to reduce greenhouse gas emissions from oil production. In return, the companies receive certificates that they can offset against their own CO₂ emissions.
Climate fraud leads to bankruptcies – Environment Minister wants to clarify
However, studies by the ZDF Frontal in May 2024, it emerged that some of the certified projects apparently never existed. Since then, the ministry and the UBA have been trying to clarify the allegations. Meanwhile, Environment Minister Lemke describes the case as one of “serious environmental crime”.
The damage has already occurred for many companies. Companies in the renewable energy sector have lost investments, 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.
Zoltan Elek, managing director of the insolvent company Landwärme GmbH, made serious accusations against politicians when their insolvency became known: “It is important to me to stress that this procedure could have been avoided if politicians and authorities had pursued and combatted the alleged cases of fraud in biodiesel and UER projects more consistently.”
New trouble: Oil giants are still allowed to use false climate certificates
What is now causing discontent 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.
A spokesman for the Federal Ministry for the Environment (BMUV) confirmed in response to a request from IPPEN.MEDIA 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.
Lawyer counters: Ministry of the Environment wants to avoid lawsuits from oil giants
According to the UBA, 40 of 69 projects are suspected of fraud. The alliance of affected companies, which met this week to Initiative “Stop Climate Fraud” joined forces 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 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?
Ministry of the Environment does not want to lose trust in climate protection
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.”
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.”
Rosneft Germany does not want to use false climate certificates
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 reported by ZDF Frontal on Friday (30 August) and which 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.
