A Maryland man is awaiting sentencing for what may seem an unusual crime:
selling bogus renewable energy credits and using the $9.3 million in
illicit proceeds to buy jewelry and a fleet of luxury cars. In a similar case in Texas, a man has been indicted for selling a whopping $42 million in counterfeit credits. He bought real estate, a Bentley and a Gulfstream jet. As a result of such cases, the Environmental Protection Agency is scrambling to retool a program
that relies on such credits to encourage the use of cleaner diesel fuel
in engines. The refining industry has meanwhile seized on the schemes
to argue that government fuel mandates don’t work and the rules should be relaxed or scrapped. Under the E.P.A. program, initiated in 2009, a producer who makes diesel
fuel from vegetable oils and animal fats receives renewable energy
credits for every gallon manufactured. The producer can then resell the
credits to refiners, who pay millions of dollars for them under a
government mandate to support a minimum level of production. The credits can also be resold, a commonplace activity in the arena of
corporate compliance with federal environmental rules. The problem is that at least three companies were selling bogus credits without producing any biodiesel at all, the E.P.A. has said in announcements over the last year. Agency officials declined to comment for this article. Now no one is certain how many of the credits are real. So far, more
than $100 million in fraudulent credits have been identified, the
refining industry estimates. That amounts to roughly 5 percent of the
credits issued since 2009, but the percentage could rise as current
investigations of other producers progress...more
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