30 companies settle with EPA over fraudulent credits

Source: Amanda Peterka, E&E reporter • Posted: Tuesday, April 24, 2012

Thirty companies that purchased millions of fraudulent renewable-fuel credits from two biodiesel producers have reached a settlement agreement with U.S. EPA.

Administrative settlement agreements signed Wednesday and released Friday by EPA show the companies have 30 days to collectively pay the government $3.75 million. Several oil companies — including BP PLC, Citgo Petroleum Corp. ConocoPhillips Co. and Sunoco Inc. — have agreed to pay more than $200,000 apiece.

“EPA made these settlement offers to help restore certainty in the market, resolve the violations and ensure that the goals of Congress are met,” the agency said in a statement emailed to Greenwire.

EPA said the companies all purchased fake credits, identified by unique renewable identification numbers (RINs), for biodiesel that was never produced by companies Clean Green Fuels LLC and Absolute Fuels LLC. Together, the credits amounted to approximately $70 million.

Fraud in the market has upset the biodiesel industry, prompting oil companies to steer clear of buying credits from smaller producers (Greenwire, March 12).

According to the settlement agreements, BP and Citgo will both pay $350,000. BP purchased more than 4 million fraudulent RINs, while Citgo purchased more than 7 million.

Sunoco has agreed to pay $311,100, while ConocoPhillips and George E. Warren Corp. have both agreed to pay $250,000. Exxon Mobil Corp., which purchased 1.65 million credits, will pay $165,407.

The companies named in the settlement purchased the credits to comply with biodiesel requirements under the renewable fuel standard. They have not admitted any fault; their supporters have previously criticized EPA for targeting companies that did not know they were purchasing fake credits.

EPA has maintained a “buyer beware” principle in the credit-trading market.

“Congress adopted the Renewable Fuels Standard program to reduce the nation’s dependence on foreign oil and help grow the nation’s renewable energy industry,” EPA said in its statement. “When fuel credits are used that do not represent actual renewable fuel, regardless of a company’s good faith belief that the RINs were valid, it undermines Congress’ goals in creating the program, creates market uncertainty and is a violation of the standard.”

Three additional companies did not agree to the settlements, EPA said.

 

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