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Bogus Renewable Energy Credit Sales Help Fuel Opposition to Biodiesel Mandates

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October 12
11:40 AM 2012

The sale of at least $100 million in fraudulent renewable energy credits since 2009 has fueled arguments by oil and gas refineries opposed to their government-mandated purchase of such credits.

The program was initiated by the Environmental Protection Agency to encourage the use of cleaner diesel fuel in engines. Companies that do not use the required amount of biodiesel fuel - fuel made from vegetable and animal fats -- must compensate by buying renewable energy credits, or renewable identification numbers (RINs), from those that do.

Since the start of the program, giants like Exxon, Mobil and Sunoco have all bought fraudulent credits through vendors listed on the EPA's own site, and it's no surprise since the agency estimates that five percent of the total credits sold have been fake, according to an article on the topic published in today's New York Times.   

The EPA announced over the course of the year that three companies sold bogus credits without producing any biodiesel at all, adding, "Now no one is certain how many of the credits are real."

The paper cited the case of Rodney R. Hailey, a Maryland man convicted of selling $9.3 million in fake renewable energy credits to major oil companies, brokers and producers through his company Clean Green Fuel.  In court papers, Hailey claimed he used the vegetable oil from thousands of restaurants in the region to make the clean fuel.

Another man in Texas has been indicted for selling $42 million in fake credits.

To remedy the situation, the EPA has promised to draft a rule to help prevent future bogus sales, and is "scrambling to retool the program," the paper reported. More investigations are currently underway.

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U.S. Struggles to Rescue Green Program Hit by Fraud

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