In mid-July, searches were conducted in Bavaria and North Rhine-Westphalia at companies specializing in environmental audits related to the controversial certificates, with investigations against 17 individuals for suspected commercial fraud.

The UBA has engaged an international law firm to assist in investigating the suspected fraud cases, which is also active on-site in China.

The financial impact remains unclear, but experts warn that the issue could lead to increased fuel prices for consumers, with the rejected carbon credits valued at approximately 18 million euros.

This scandal is considered one of the most significant crises in German climate policy.

The German Federal Environment Agency (UBA) has denied climate certificates to German companies due to suspected fraud in eight climate protection projects in China.

These eight projects represented a claimed reduction of 215,000 tons of carbon dioxide, which the companies intended to account for in their climate balance.

The fraud was facilitated by a mechanism allowing German mineral oil companies to achieve legally mandated climate targets through financing emission reduction projects in China.

Currently, 40 out of 69 projects in China are under suspicion of fraud, prompting the Federal Environment Minister to halt all new applications since early July.

Concerns first arose over a year ago regarding the actual existence and compliance of some of these projects with required standards.

Minister Steffi Lemke described the situation as 'serious environmental crime' and pledged thorough investigation, leading to the suspension of a UBA employee responsible for the relevant area.

Criticism has emerged from biofuel producers who argue they have been unfairly harmed by cheaper but questionable UER projects.

The UBA emphasized the challenges of verifying compliance and detecting misuse from a distance, highlighting the need for on-ground investigations.