The Environmental Protection Agency on Thursday leveled a $27 million fine on a company for violating the agency's renewable fuel program, the largest civil penalty for a company since the agency began its fuel program.
"This settlement delivers on the greenhouse gas emissions reduction goals that Congress envisioned for the Renewable Fuel Standard," said Cynthia Giles, the EPA's head of enforcement, adding a climate change spin to the largest renewable fuel fine in history.
The fine was leveled against Singapore's Chemoil Corp. for holding onto 72 million biodiesel Renewable Identification Number credits, or RINs, longer than it was legally allowed to under the EPA's Renewable Fuel Standard program. The credits, which are generated when a producer makes a gallon of renewable fuel, are used to demonstrate compliance with the standard.
"It's vital that companies retire renewable fuel credits when exporting fuel abroad. Upholding this requirement is a key way EPA is working to maintain program integrity and a level playing field for companies that follow the law," Giles said.
The renewable fuel program requires refiners to blend ethanol, biodiesel and other renewable fuels into the nation's gasoline and diesel supplies. The credits can be sold to refiners like a commodity if a company cannot acquire enough renewable fuel to blend to comply with the Renewable Fuel Standard.
Chemoil exported a large amount of biodiesel, but did not retire the credits as required under the fuel program.
The EPA said not retiring the credits could lead to market distortions and hurt the efficacy of the program by preventing the agency from knowing precisely how much renewable fuel has been blended in a given year.
The EPA and the Department of Justice showed that Chemoil exported at least 48.5 million gallons of biodiesel between 2011-13, "but failed to retire the more than 72 million RINs that were generated for the exported fuel," according to the agency.
"The current market value of the credits — along with an additional 7.7 million renewable identification numbers already retired by Chemoil in the leadup to this settlement — is more than $71 million," it added."Congress adopted the Renewable Fuel Standards program to achieve significant greenhouse gas emissions reductions, reduce the nation's dependence on foreign oil and grow our domestic renewable energy industry," said John Cruden, the head of the Justice Department's environment division.
"By ensuring a level playing field within the industry through vigorous compliance, monitoring and enforcement, we help ensure that these important congressional goals are met," he said.