Committee Leaders Press EPA on Management of RIN Fraud

February 3, 2012

WASHINGTON, DC - Republican Leaders of the House Energy and Commerce Committee today pressed the Environmental Protection Agency over its implementation of the Renewable Fuel Standard. EPA has discovered that tradeable fuel credits, known as Renewable Identification Numbers (RINs), are being fraudulently sold, and the agency's response may be adding to the problems.

Energy and Commerce Committee Chairman Fred Upton (R-MI) and Energy and Power Subcommittee Chairman Ed Whitfield (R-KY) wrote to Margo Oge, Director of EPA's Office Transportation and Air Quality, requesting detailed information on the fraudulent program and a briefing for committee staff on the agency's current investigations.

EPA's investigation initially focused on suspect activities by the company Clean Green Fuel LLC, which allegedly sold $9 million in fraudulent biodiesel RIN's online. After discovery of this infraction, EPA sent buyers of these invalid RINs Notices of Violation (NOVs) requiring them to replace the illegal credits with valid ones. EPA's management of the situation appears to have made a bad situation worse and is punishing innocent participants who fell victim to the fraudulent actors within the program.

Upton and Whitfield wrote: 

"As a result, the risk of unknowingly buying problematic RINs is great and so the renewable fuels marketplace is in turmoil.   Further compounding an already difficult situation are settlement agreements EPA sent in January to NOV recipients in the Clean Green matter. The Committee understands that additional NOVs resulting from other investigations were issued this week, roiling the RIN markets further. Many market participants - including small biofuel producers whose continued existence is possibly jeopardized through no fault of their own - have been adversely impacted. The costs of this turmoil ultimately will be borne by consumers. These fraud and abuse issues in the RFS, and our understanding of EPA's related enforcement practices, may lead to a need for Congressional action.

"Given current statutory mandates for renewables in the nation's fuel supply, eliminating uncertainty and restoring the proper functioning of RIN markets is vital for a competitive fuels marketplace -an essential ingredient to ensure consumers have ample and affordable fuel. We want to be sure restoring functional RIN markets is done expeditiously and in an equitable manner."

For a full copy of the letter, click here.

###