SNP involved in investigation into allegations of fraud against Chinese climate projects

SHARE POST

Munich, August 19, 2024 – The Berlin Public Prosecutor General’s Office is currently investigating three environmental experts on suspicion of commercial fraud. They are alleged to have been involved in the certification of so-called upstream emission reductions (UER), which were used to deceive the German Emissions Trading Authority (DEHSt), which is part of the Federal Environment Agency.

The DEHSt can issue certificates for certain certified climate protection projects for the amount of CO2 reduction achieved. Oil companies that acquire such certificates can have them offset against their carbon footprint, making it easier for them to meet statutory CO2 reduction targets. The environmental experts are suspected of having drawn up reports for Chinese environmental protection projects that did not exist in the form shown, but were confirmed by the inspection bodies.

The specific investigations are probably just the tip of the iceberg. According to industry reports, false UER certificates, many of which are based on fake projects in China (according to Environment Minister Steffi Lemke, around 40 out of 69 projects are currently suspected of fraud) and fake CO2 applications from Chinese letterbox companies, are causing damage amounting to several hundred million, probably even billions of euros. The German biofuel industry is particularly affected by this, as the oil companies have to buy less German biofuel to meet their greenhouse gas quota thanks to the UER certificates from China. Due to the resulting fall in the price of greenhouse gas reduction quotas, the German biomethane supplier Landwärme, a major player in this market, recently had to initiate so-called self-administration proceedings.

The commercial law firm SNP has been advising and representing Landwärme GmbH, which considers itself to be aggrieved, as a representative of the German biofuel industry in this matter since the first suspicions about UER issues arose in 2023. In addition to strategic issues in relation to the Federal Environment Agency and DEHSt, the focus is on public law, the legal relationships with the certifiers and the conduct of negotiations in many disputed contractual relationships. We also coordinated the extensive investigation of the facts surrounding numerous Chinese UER projects and established contact between the Federal Environment Agency and Chinese whistleblowers.

Advisors Landwärme GmbH
SNP, Munich: Peter Muth (dispute resolution, lead) and Dr. Wolfgang Heinze (international commercial law)
Addleshaw Goddard, Frankfurt: Jörg Bielefeld (commercial criminal law)

SHARE POST