Chevron Corp. is putting workers on furlough at a German biodiesel plant that has been out of operation because of oversupply in the market.

The biodiesel plant in Oeding, in northern Germany, has been idled for a few months, a spokesman said by phone.

“This decision was made in response to a challenging margin environment, primarily caused by alleged fraud and dumping of Chinese biodiesel flooding the market,” the company said in an email.

The move is the latest twist as a surge in Chinese biodiesel exports to the Europe Union has come amid increasing concerns that producers in the bloc are being undercut by companies in Asia that are mixing fuels with cheaper feedstocks and mislabeling them. Selling biofuels in the EU is attractive because of incentives there, with fuels made from waste products fetching higher prices than those made directly from crops, as it’s more sustainable. 

The Chevron facility, which produces fuel from waste ingredients such as used cooking oil, had recently been upgraded to allow it to handle other feedstocks, including brown grease and a product from the palm industry known as Pome. 

The European biodiesel industry has long complained about mislabeling of feedstocks, such as palm oil, that come into Europe. The European Biodiesel Board, which represents the industry, raised the issue of Chinese imports in a letter to European Union policymakers last month. 

Workers at the Chevron plant, run through its Renewable Energy Group unit, will stay at home from Aug. 1, with part of their salaries covered by a German government program that’s intended to avoid redundancies. Chevron calls on Germany to introduce a US-style accreditation system for producers, the spokesman said.