Biofuel fraud is a potentially huge business: but the US Environmental Protection Agency has moved quickly to snuff out one of the most extensive examples of fraud to date.
The EPA has invalidated 33.5million renewable fuel credits that were sold by an Indiana company for biofuel it did not produce. The filing follows fraud charges being held against the Indiana-based E-Biofuels LLC in September when the US Justice Department suggested it was falsely claiming products qualified for government incentives as renewable fuels.
Now, the clampdown by the EPA looks set to put pressure on refiners such as Exxon and Valero to meet government renewable-fuel requirements. Under US law they must blend ethanol or other biofuels into their mix: with rules allowing them to buy credits from other producers to meet their obligations.
It is not the first time that the EPA has struck: it claims that it had already exposed three companies that have produced 140million fraudulent renewable identification numbers. At today's value of 40 cents for biodiesel, the RINs could be worth in the region of $13.4billion.
Last year, federal prosecutors accused Clean Green Fuels LLC of selling 32million fraudulent certificates; while in February, Absolute Fuels LLC received a violation for selling 48million bogus certificates. Then there was a third case involving Green Diesel LLC, with the EPA reaching administrative settlements with the likes of Valero and Exxon - the latter paying a penalty for $165,407.
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