Washakie Renewable Energy, LLC Clean Air Act Settlement

(Washington, DC - March 19, 2015) - The U.S. Environmental Protection Agency and the U.S. Department of Justice today announced a settlement with Utah-based Washakie Renewable Energy, LLC, that resolves allegations that the company generated more than 7.2 million invalid renewable fuel credits worth more than $2 million.  Washakie will pay a civil penalty of $3 million. 

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Overview of Company

Washakie Renewable Energy, LLC (Washakie) is a limited liability company organized under the laws of the State of Utah. The founders of Washakie constructed a biodiesel production facility in Plymouth, Utah, which was completed in 2007.

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Overview of the Renewable Fuel Standard Program

The original Renewable Fuel Standard program (RFS1) was created under the Energy Policy Act of 2005, and established the first renewable fuel volume mandate in the United States. RFS1 required 7.5 billion gallons of renewable fuel be blended into gasoline by 2012.

The Energy Independence and Security Act of 2007 expanded the program, which became known as the RFS2 program. The RFS2 program reduces greenhouse gas (GHG) emissions by setting a national mandate for renewable fuels that meet specific GHG emissions reduction standards. The RFS2 regulations created a market based program to assure that the national mandate will be met. Renewable fuel producers and importers generate renewable fuel credits, known as Renewable Identification Numbers or RINs, for each gallon of renewable fuel that meets the GHG emissions reduction standards. The program requires refiners and importers, known as obligated parties, to retire a specific number of RINs each year based on the amount of petroleum fuel that they produce and import.

The RFS program is expected to reduce GHG emissions by 138 million metric tons when fully implemented in 2022. The reductions would be equivalent to taking about 27 million vehicles off the road.

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Overview of Case/Violations

The settlement resolves an enforcement action by EPA against Washakie for violations of the RFS1 and RFS2 requirements. EPA and the U.S. Department of Justice allege that from January 29, 2010, to October 15, 2010, Washakie generated more than 7.2 million invalid biomass-based diesel RINs. Washakie reported to EPA that the RINs were generated for biodiesel produced by Washakie at its Plymouth, Utah facility. However, at that time, Washakie failed to produce any biodiesel at its Plymouth, Utah facility that could be used to generate biomass-based diesel RINs. EPA and the U.S. Department of Justice also allege a number of related recordkeeping and reporting violations.

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Washakie mitigated the harm caused by its generation of more than 7.2 million RINs between January 29, 2010, and October 15, 2010, by purchasing and retiring from the market an equivalent number of biomass-based diesel RINs that were identified as invalid and used for compliance purposes.

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Pollutant Impacts

EPA estimates that Washakie’s illegal generation of these RINs resulted in excess greenhouse gas emissions of more than 30,000 metric tons of carbon dioxide equivalent emissions. Washakie’s purchase and retirement from the market of an equivalent number of RINs mitigated this harm. 

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Health and Environmental Benefits

In order to ensure the GHG emissions reductions from the RFS program are achieved, and to protect the program's integrity and maintain a level playing field for regulated companies, EPA pursues enforcement actions against renewable fuel producers, such as Washakie, and importers that generate invalid RINs.

Failure to maintain records, and failure to submit required reports to EPA are significant violations because they result in:  (1) a reduced ability by EPA to know whether the renewable fuels meet specific GHG emissions reduction standards; and (2) a negative impact on the integrity of the renewable fuels program.

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Civil Penalty

Washakie will pay a civil penalty of $3 million.

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For more information, please contact:

Tahani Ann Rivers
Air Enforcement Division
U.S. Environmental Protection Agency
1595 Wynkoop Street (8MSU)
Denver, CO  80202-1129
(303) 312-7155

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