Fuel fraud perpetuates further harmful auto emissions and increased fuel consumption

OECD Observer Business brief

Safe international trade is essential for the economic growth governments are currently seeking, but is threatened by the ever-evolving asymmetrical threat of fraud and illicit activity.

In accordance with Articles 4 and 12 of the United Nations Framework Convention on Climate Change, countries that are parties to the convention submit national greenhouse gas (GHG) inventories to the Climate Change secretariat. The measures are aggregated in CO2 equivalent.

In a recent study1 the Asian Development Bank concluded that fuel fraud, on top of robbing nations of much needed fiscal revenue, “perpetuates extensive secondary effects such as harmful auto emissions, increased fuel consumption, disrupted supply chains, and loss of confidence in national governance systems. While fuel-marking systems have been in use since the 1950s, recent developments in marker technologies, coupled with advances in analytical capacity, now provide the technical foundation for extremely accurate and effective fuel-marking programs”.

These programs help governments to raise revenue, combat smuggling and improve the environment.

SICPA is now integrating in its platform fuel marking and monitoring technology to support the environment

The fuel marking and monitoring system ensures the authentication of the original legal fuel supply from authorised sites to the end user. By applying efficient fuel marking and monitoring the government can both increase revenue from fuel taxes and verify that original legal high-quality fuels are distributed.

By meeting these two main targets, the effect on the environment is fourfold:

1. Only high grade/quality fuels are distributed. This assures clean engine emissions with a direct impact on the environment, by preventing the release of poisonous elements into the atmosphere and water sources.

2. It also prevents damage to engines and the operation of the catalytical inverters.

3. Some use of non-robust dyes as a marking solution may create large amounts of waste when criminals wash out the dyes. For example, Japan is suffering from huge amounts of waste created by washing out quinizarin used to dye fuels. The same problem exists in Ireland, which has led to an enquiry about the use of cleaner marking technologies. With this in mind a robust marker is critical to the solution.

4. The marker itself should be proven to be environmentally friendly when added to the fuels. This requires emission and engine tests of marked fuels to meet environmental standards and engine compatibility.

Safe international trade is essential for the economic growth governments are currently seeking, but is threatened by the ever-evolving asymmetrical threat of fraud and illicit activity. These crimes, be they through sale of counterfeits, contraband, tax evasion, avoidance of quality controls or theft of intellectual property, damage governments’ revenues, undermine policies and put public health and citizens’ well-being at risk.

The work of international organisations such as the OECD in promoting co-operation and best practice between governments is crucial to tackling the issue. So is direct action by national governments to reinforce their own capabilities and build robust systems which can be linked across borders to build an interoperable international network.

SICPA is at the forefront of those in the private sector investing in developing up-to-date tools for governments so that they can meet these challenges now and in the future.

Our SICPATRACE® platform is designed to accommodate numerous products, to protect licit industries and help promote the conditions suitable for economic development and investment.

Our approach builds on our long experience in providing security inks and security features to protect bank notes and in working in partnership with governments. SICPA has developed a modern toolbox which can be implemented in a modular way and adapted to take account of national needs. At the core of our approach is secure track and trace which provides transparency and control for governments across the length of complex supply chains which criminals are so adept at exploiting.  

1Asian Development Bank. The Governance Brief. “Fuel-Marking Programs: Helping Governments Raise Revenue, Combat Smuggling, and Improve the Environment” Issue 24. 2015.





©OECD Observer No 304, November 2015 


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