The Central Criminal Police and Estonian Environmental Board are investigating in a criminal probe whether fuel seller AS Olerex has knowingly submitted false information to the Tax and Customs Board in order to avoid complying with the biofuel requirement stemming from the Liquid Fuel Act.
Pursuant to the Liquid Fuel Act, fuel retailers are obliged to ensure that at least 7.5 percent of the fossil fuel sold to consumers in a year is renewable energy-based fuel, or biofuel. The Environmental Board determined last summer that Olerex is unlikely to successfully fulfill this requirement within the calendar year. The company was notified of this on multiple occasions. However, as of Dec. 20, 2022, Olerex's biofuel compliance rate was only about 1 percent.
On Dec. 30, 2022, a tanker carrying fuel for Olerex arrived in Estonia, and the Tax and Customs Board took a sample of the fuel. Based on the sample, it was determined that it was regular winter diesel fuel. Two weeks later, Olerex provided the Tax and Customs Board with information that the tanker had brought hydrogenated vegetable oil (HVO) based biofuel, which would have fulfilled Olerex's biofuel requirement by 7.51 percent.
Currently, no charges have been lodged, and investigators are gathering evidence to establish whether, at whose orders, and why the company provided false information.
Prosecutor at the Southern District Prosecutor's Office Gerd Raudsepp said that the collected evidence indicates that Olerex has provided false information, but the precise circumstances of the act need to be clarified in the criminal proceedings.
«We have reason to believe that Olerex wanted to demonstrate that they had fulfilled the biofuel requirement with the fuel that arrived on the penultimate day of the year, but based on the collected evidence, there is suspicion that false information was provided. If this proves to be true, it would be a crime. Since the company had been repeatedly warned, Olerex was aware that failure to meet the requirement could result in a fine of up to 10 million euros. Therefore, the motive for providing false information may have been to avoid possible penalties, but we will investigate this in the criminal proceedings,» Raudsepp said.
Director General of the Estonian Environmental Board Rainer Vakra said that possible environmental crimes deserve serious attention as they violate a shared property -- a good living environment.
«That is why every such suspicion needs to be thoroughly investigated,» he said. «The purpose of the biofuel requirement is no less than mitigating climate change. It is the large companies, those who profit from the sale of fossil fuels, who owe society the contribution of implementing more environmentally friendly solutions. Neglecting this obligation would come at the expense of the quality of life for all of us in the future and would be unfair to competitors, consumers, and society as a whole,» Vakra emphasized.
Leho Laur, head of the corruption crimes bureau at the Central Criminal Police, explained that it is important for the police to ensure a fair business environment and equal conditions for all market participants.
«If there is a possibility that someone has gained an unfair advantage compared to their competitors, it is our duty to investigate such suspicions. Unfair tactics result in a direct loss for other market participants, but ultimately, the effects also reach consumers if honest merchants have to leave the market as a result. In this case, since the biofuel requirement was established by the European Union, such a violation could lead to sanctions, the costs of which would ultimately be borne by all taxpayers,» Laur said.
The criminal investigation is being conducted by the Central Criminal Police and the Estonian Environmental Board and led by the Southern District Prosecutor's Office.
Olerex hints at information operation re criminal probe
According to the company, the whole affair could be a targeted information operation against Olerex.
According to Olerex, a meeting took place at the company's office on Wednesday with representatives of the Environmental Board, where the latter were provided with additional explanations about the origin of the fuel batches imported by Olerex to Estonia and were given an opportunity to once again familiarize themselves with the related documentation.
«The Environmental Board has confirmed to us that these explanations were exhaustive. Prosecutor Raudsepp, whom the media quoted today, has not clarified the substantive side of his statements to us. On the other hand, there have been hints from various sources that this may be an information operation targeted against the leader of the Estonian fuel market,» Olerex stated on Thursday afternoon.
«We have all the necessary information at our disposal, both Olerex and the Environmental Board, to refute misleading accusations. We will continue to import fuel to Estonia through all our contractual suppliers. The Estonian fuel market remains stable and well-supplied,» the fuel seller affirmed.