Calif. company agrees to pay $100M for RFS violations

Source: Amanda Reilly, E&E reporter • Posted: Friday, September 30, 2016

Chemoil Corp. has agreed to pay nearly $100 million to resolve violations of the renewable fuel standard, U.S. EPA and the Department of Justice said today.

The proposed settlement includes a $27 million civil penalty, the largest ever against a company in the biofuel program. Chemoil has also agreed to retire fuel credits worth more than $71 million.

The renewable fuel standard (RFS) requires refiners to blend biofuels into petroleum gasoline and diesel each year. Fuel producers and importers generate credits for each gallon of qualifying biofuel.

California-based Chemoil sells marine, aviation, diesel, renewable fuels and residual oil products in the Golden State. Chemoil is a subsidiary of Glencore PLC’s Chemoil Energy Ltd. As part of its business, the company blends and sells biodiesel, which is made from soybean oil, animal fats and used cooking grease.

DOJ and EPA said Chemoil exported 48.5 million gallons of biodiesel in 2011-13 without retiring approximately 72.7 million fuel credits linked to that fuel.

Under the RFS, biodiesel exporters must retire their credits — known as Renewable Identification Numbers, or RINs — because the exported fuel cannot be used to meet U.S. blending requirements.

EPA discovered Chemoil’s alleged violations thanks to tips from others involved in the RFS program.

“The failure to retire RINs threatens the [greenhouse gas] emissions reductions Congress sought to achieve by requiring that the renewable fuel be used in the United States,” EPA said.

According to the government, Chemoil has already retired 7.7 million biodiesel RINs. The proposed settlement agreement requires the retirement of 65 million more credits.

The agreement was lodged in the U.S. District Court for the Northern District of California. It is subject to a 30-day comment period.

Chemoil did not respond to a request for comment.