Feds File RFS Suit

October 22, 2016 02:21 AM

Company agrees to $6 million settlement

The Environmental Protection Agency (EPA) and the Department of Justice are filing a complaint against NGL Crude Logistics and Western Dubuque Biodiesel over alleged violations of the Renewable Fuel Standard (RFS).

The complaint claims NGL and Western Dubuque made transactions that generated about 36 million invalid renewable identification numbers (RINs) in 2011. The RINs act as credits when a company produces qualifying RFS fuel. They can be traded or sold to refineries, importers and other entities to prove compliance with RFS production requirements.

Renewable fuel producers and importers generate RINs for each gallon of renewable fuel produced that meets greenhouse gas emission reduction standards. The program requires refiners and importers to retire a specific number of RINs each year based on the amount of petroleum fuel they produce and import. 

The RFS program was designed to reduce emissions by 138 million metric tons by 2022. The reductions would be equivalent to taking about 27 million vehicles off the road.

Western Dubuque has agreed on a $6 million settlement. That consent decree doesn’t resolve current claims against NGL, which was known as Gavilon, LLC, in 2011.

“These cases uphold the energy independence and greenhouse gas reduction purposes of the law that Congress passed,” says Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “EPA is committed to a level playing field for responsible companies and to ensuring companies that illegally obtain an unfair competitive advantage are held accountable.”

According to U.S. Attorney Kevin Techau for the Northern District of Iowa, the Department of Justice is committed to protecting the integrity of RFS, which incentivizes the production of biofuels, for a stronger, more energy-independent nation. “This $6 million settlement supports that goal,” he says.

The pending complaint against NGL asks the court to require the company to retire 36 million RINs to offset the harm caused by its alleged violations, as well as pay a civil penalty. According to EPA, excess greenhouse gas emissions equivalent to 151,319 metric tons of carbon dioxide were emitted due to these alleged violations. The settlement with Western Dubuque will be subject to a 30-day comment period and final court approval. 

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