WASHINGTON, Sept. 29, 2016 - A major biodiesel retailer has agreed to pay a $27 million fine and retire renewable fuel credits worth $71 million to resolve alleged violations of the Renewable Fuel Standard program. The penalty is the largest in the history of EPA’s fuels programs.

In court papers filed today, EPA and the Justice Department said that Chemoil exported at least 48.5 million gallons of biodiesel from the U.S. in 2011, 2012, and 2013, without retiring the approximately 72.7 million biomass-based diesel Renewable Identification Numbers (RINs) for that fuel. The company also did not file its required annual reports with its biomass-based diesel Renewable Volume Obligations for those same years.

RFS regulations allow biodiesel producers and importers to generate 1.5 RINs for each gallon of qualifying biodiesel that they produce or import. EPA said it discovered the alleged violations as a result of tips from RFS program participants.

San Francisco-based Chemoil, which is owned by multinational commodity trading and mining company Glencore Ltd., sells marine, aviation, diesel, renewable fuels and residual oil products.

Biodiesel is a biodegradable fuel manufactured domestically from vegetable oils such as soybean oil, animal fats, or recycled restaurant grease.

“The RFS program requires exporters to retire RINs for renewable fuel like biodiesel, because the fuel exported is no longer available for blending into United States’ fossil fuel supply and, for that reason, cannot be used to meet the renewable fuel volume mandate established by Congress,” EPA and DOJ said in a news release.

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“If exporters fail to retire the appropriate number and type of RINs associated with the exported fuel, as the United States alleges happened here, it artificially inflates the volume of renewable fuel available for blending in this country and the number of RINs available to meet the renewable fuel volume mandate,” the two agencies said. “Ensuring exporters comply with the regulations for RIN retirement is critical to the proper functioning and integrity of the RFS program.”

EPA estimated that Chemoil’s violations “resulted in a failure to achieve a reduction of (greenhouse gas) emissions equivalent to 305,579 metric tons of carbon dioxide in the United States.”

Chemoil did not immediately respond to a request for comment.

The consent decree in the case is here. The complaint is here.


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