First RIN Fraud Case Prosecuted


A Maryland man has been found guilty in the first ever criminal prosecution associated with fraudulently generating renewable identification numbers (RINs) under the United States (US) Environmental Protection Agency’s (EPA’s) Renewable Fuel Standard (RFS). On June 25, 2012, a jury in the US District Court quickly convicted Rodney Hailey, owner of Clean Green Fuels, LLC of 42 criminal counts stemming from the sale of more than 32 million fraudulent RINs worth $9.1 million. Specifically, he was found guilty of wire fraud, money laundering, and violating the Clean Air Act. Sentencing is scheduled for mid-October. According to the US Attorney’s Office, Hailey faces up to 20 years in prison for each of eight wire fraud counts, 10 years each for 32 counts of money laundering, and two years each for two Clean Air Act counts.

Hailey’s acts first became public in October 2011 when EPA filed charges against him for selling biodiesel RINs and registering Clean Green Fuel as a producer of biodiesel, despite never actually producing any of the alternative fuel. The issue gained further attention when EPA issued notices of violation against gasoline and diesel refiners, blenders, and importers who used the fraudulent RINs generated by Hailey in order to comply with their obligations under the RFS.

The 32 million RINs generated by Hailey were only a portion of the fraudulent RINs EPA asserts have been generated to date. In total, since October 2011, EPA has invalidated more than 140 million biodiesel RINs generated under the RFS at a cost of more than $100 million to gasoline and diesel refiners, blenders, and importers. At this time, the federal government has not pressed criminal charges against the other alleged fraudulent RIN generators.

However, this case and two other pending cases nationwide have unveiled problems with the program and led to calls in Congress for a review by lawmakers. EPA has stated they are reviewing the program to make changes that will reduce the potential for future fraud.

BDI Building Waste Oils Biodiesel Plant in France

BDI – BioEnergy International AG has been commissioned to build a multi-feedstock biodiesel plant in the port of Le Havre, France. The order amounts to 16.4 million euro and involves the entire biodiesel process as well as the assembly and installation of the plant. What will eventually be the biggest multi-feedstock biodiesel plant in France will produce high-quality biodiesel exclusively from locally collected animal fats that are not approved for human consumption and used cooking oil instead of from rapeseed oil, which has been the primary raw material used in France. The plant will have a capacity of 75,000 metric tons (20 million gallons) of biodiesel per year.

The plant will be operated by EcoMotion France, a subsidiary of Saria and of Intermarché, one of the largest supermarket chains in France. The biodiesel produced will be marketed via the fuel station network of Intermarché.

BDI has built biodiesel and biogas plants for Saria Group companies in the past and also constructed biodiesel plants for EcoMotion Germany in Lünen and Malchin. EcoMotion France will enjoy an additional benefit with this new facility because biodiesel made from waste materials counts double in calculating achievement of the national targets for renewable energies in France, like in many other European Union countries.

Biodiesel Technician Training Program Accredited

Biodiesel took a leap forward in becoming fully integrated into the education that diesel mechanics receive when the National Automotive Technician Education Foundation (NATEF) officially awarded the Automotive Service Excellence (ASE) accreditation to the National Biodiesel Board’s (NBB’s) Biodiesel for Diesel Technicians curriculum. NATEF is the body responsible for accrediting schools and curriculum nationwide.

“We are delighted to have the National Biodiesel Board as an accredited training organization – it is important to have good technical information to educate the next generation of diesel technicians in advanced biofuels,” said Dave Milne, president of the Automotive Training Managers Council, a division of ASE.

NBB’s Biodiesel for Diesel Technicians curriculum is intended to provide technically sound information to mechanics and overcome misconceptions.

“Educating diesel technicians early is critical to its mission of increasing public acceptance of biodiesel, a relatively new fuel,” said Rachel Burton, a diesel technician who leads the NBB program. “Knowledge is power.”

The NBB program has had a partnership with Universal Technical Institute (UTI), a leading provider of entry-level technicians, since 2009. Burton has led over 300 instructors through the biodiesel curriculum at UTI’s 10 campuses nationwide. Now, schools like UTI, Lincoln College of Technology, and Ivy Tech can officially use this biodiesel program as core curriculum for diesel technicians and offer a biodiesel class that counts for credits towards a degree or for continuing education units (CEUs). Many established technicians request CEUs for certified professional development or ASE certification, which many employers require. 

The Iowa Biodiesel Board was an early partner with NBB, implementing the Biodiesel for Diesel Technicians curriculum with more than 1,000 students at community colleges in Iowa since 2009. Before taking a course in biodiesel led by instructors trained under the program, just 33 percent of students felt “fairly knowledgeable” or “very knowledgeable” about biodiesel. After the course, 74 percent classed themselves in those categories.

California Dishes Out Millions for Green Projects

In two separate actions, the California Energy Commission recently approved $58 million in funding to projects that will accelerate the development of green fuels and technology in the state. The awards were made through the Energy Commission’s Alternative and Renewable Fuel and Vehicle Technology Program, which provides approximately $100 million annually to encourage the development and use of new vehicle technologies and alternative fuels to help the state fulfill its climate change policies. Twenty-five projects were chosen, with the largest award, $14.5 million, going to demonstrate medium- and heavy-duty vehicles using advanced technology and alternative fuels. Another $10 million was given as a share of cost to install 101 new ethanol fueling facilities at existing gas fueling stations statewide.

Three biodiesel projects were awarded, including $758,200 to Springboard Biodiesel, LLC, which will develop and build a pilot biodiesel production facility in Chico, CA, where the company is based. The facility is expected to provide low-cost biodiesel in rural Northern California, where such fuel options are not widely available. Used cooking oil and other waste oils will be used to produce up to 1,000 gallons of biodiesel a day to be used locally. The project is expected to create 12 permanent jobs.

North Star Biofuels, LLC was awarded $500,000 to develop a commercial-scale blending facility at a biodiesel production plant in Watsonville, CA, that uses waste oils, including used cooking oil, as a feedstock. The blending technology will create a fuel of more consistent quality than fuel produced using older processes. The blended fuel at this facility will have a carbon intensity that is 75 to 85 percent less than that of conventional diesel.

Whole Energy Pacifica, LLC will receive $125,274 to design, build, and install a fuel-blending system at an existing biodiesel terminal in Richmond, CA. The new system will provide accurate, uniform blending of diesel and biodiesel. The biodiesel at this facility is predominantly made from used cooking oils.

Under the Energy Commission’s Public Interest Energy Research program, Biodiesel Industries of Ventura, CA, was awarded a $1.8 million grant to pioneer new technologies for the production of advanced biofuels at the company’s 10 million gallon facility at the National Environment Technology Demonstration Site at Naval Base Venture County in Port Hueneme, CA. Biodiesel Industries, a subsidiary of Biodico, will operate the new plant, which is expected to be online by Spring 2013. The facility will use waste cooking oil, algae oil, castor oil, and brassica oil as the primary feedstocks, depending on season and location.

Canadian Airline Makes First Biofuel Flight

Air Canada successfully operated its first flight with biofuel in mid-June to highlight the airline’s commitment to the environment. The flight was a normal revenue flight operated with an Airbus A319 aircraft using a 50/50 mix of regular jet fuel and biofuel derived from recycled cooking oil. This blend produced by SkyNRG has been recertified to normal jet fuel standards and can be safely used without modifying the aircraft’s systems.

The flight from Toronto, ON, Canada, to Mexico City, Mexico, generated at least 40 percent fewer emissions by using jet fuel derived from recycled cooking oil and other fuel-saving measures, making it the most environmentally-friendly flight ever flown by Air Canada. The flight was supported by Airbus and was part of an environmental demonstration by the International Civil Aviation Organization to coincide with the Rio +20 United Nations Conference on Sustainable Development.

Enterprise Increases Biodiesel Use at Airports

Enterprise Holdings, owner and operator of the Enterprise Rent-A-Car, National Car Rental, and Alamo Rent A Car brands, is converting even more of its airport shuttle buses to 20 percent biodiesel (B20) and exploring other clean fuel options for its buses. The company has converted its fleet of buses to biodiesel in more than 50 North American markets. 

The company converted all of its shuttle buses to biodiesel at airport locations within five miles of a biodiesel fueling station. Overall, more than 70 percent of its buses now run on biodiesel, with approximately 50 percent using five percent biodiesel, and more than 20 percent using B20. By the end of the year, the company’s older buses will be replaced with new B20-compatible models and more than 80 percent of its total shuttle bus fleet will run on biodiesel. 

“We are steadily converting our shuttle fleet as biodiesel becomes accessible to more and more of our airport locations,” said Lee Broughton, head of corporate sustainability, Enterprise Holdings. “We made this commitment to biodiesel with the understanding that it must make economic and environmental sense in each airport market where we operate. We’re encouraged by the increasing access to this cleaner burning fuel, and look forward to additional conversion when it’s readily available in even more markets.” 

Enterprise also supports renewable fuels research. Since 2006, Enterprise’s owners, the Taylor family, have given $35 million to the Donald Danforth Plant Science Center and its Enterprise Rent-A-Car Institute for Renewable Fuels. At the Enterprise Institute, scientists are researching and developing new and sustainable methods of creating next-generation biofuels from nonfood crops such as camelina, switchgrass, and algae.

EPA Awards Grant for Trap Grease Project

The US Environmental Protection Agency (EPA) has awarded an $87,000 People, Prosperity, and the Planet (P3) grant to a team of faculty, students, and staff from the University of Cincinnati (UC) and the Metropolitan Sewer District of Greater Cincinnati (MSD) to turn sewer grease into biodiesel.

The team competed against 300 college and university innovators from across the country in the 8th Annual National Sustainable Design Expo at the National Mall in Washington, DC, in early June. The EPA’s P3 award competition was held at the expo.

MSD’s Ting Lu, PhD, an environmental engineer, has been working with faculty and students from UC and Bluegrass Biodiesel of Falmouth, KY, to clean and treat waste cooking oil from UC’s campus eateries to make biodiesel and create energy to power several residence halls.

The P3 grant money will allow the team to develop a community-scale biodiesel production system that would convert trap grease collected from the Greater Cincinnati area into biodiesel. Trap grease is grease restaurants trap before it goes into the sewer. The project, slated to begin in September, will also include pilot demonstrations and a 100-gallon pilot treatment facility.

REG Awarded Again to Provide Biodiesel to Hawaiian Electric

Hawaiian Electric Company received approval in May from the Hawaii Public Utilities Commission for an additional three-year biodiesel contract with Renewable Energy Group (REG), the largest biodiesel producer in the United States.

This is REG’s third awarded contract for biodiesel for Hawaii Electric’s 100-megawatt combustion turbine generator at Campbell Industrial Park Generating Station. The new contract took effect in July 2012 when the previous contract ended and states that REG must conform to environmental guidelines for sustainable production and use of biofuels that were developed by Hawaiian Electric in partnership with the Natural Resources Defense Council.

Under the new contract, REG will continue supplying three to seven million gallons of high-quality biodiesel processed from used cooking oil and animal fats annually for the generating station. The plant is the country’s first utility-scale combustion turbine run on 100 percent biodiesel.

Hawaii Welcomes New Facility

In early July, Pacific Biodiesel Technologies unveiled its newest project and the first biofuel refinery to be built in Hawaii since 2000, Big Island Biodiesel, LLC located near Keaau, on the Big Island. The grand opening celebration featured speeches from United States (US) Senator Daniel Inouye, Hawaii Governor Neil Abercrombie, and others representing various government divisions such as the US Department of Agriculture, Environmental Protection Agency, and Department of Energy.

It has been 12 years since Pacific Biodiesel began operations at its Sand Island refinery on Oahu. Big Island Biodiesel will utilize recently developed zero-waste, super-efficient processing technology and will play a significant role in helping Hawaii reach its energy independence and sustainability goals. The facility will utilize used cooking oil from across the state, vegetable oils, animal fats, and jatropha from a nearby farm to produce up to five million gallons of biodiesel per year. Fuel for commercial sale could be available as early as September. The plant increases the state’s biodiesel production capacity 500 percent, to 5.5 million gallons per year.

Speakers were followed by a traditional Hawaiian blessing of the refinery by Kahu Kimo Pihana, who has been present at each of Big Island Biodiesels’ blessings from the very first land blessing in January 2010 and groundbreaking event later that year to the recent grand opening.

Saskatchewan Mandate Kicks In

Saskatchewan’s renewable diesel mandate went into effect July 1, 2012, establishing an average of two percent renewable content in diesel fuel sold in the Canadian province.

Renewable diesel is a diesel fuel substitute made from renewable materials that include vegetable oil, waste cooking oil, animal fats and fish oil, or feedstock from agricultural or forest biomass. The use of renewable diesel in Saskatchewan has the potential to reduce greenhouse gas emissions equivalent to taking 5,000 cars off the road annually.

“The new mandate was developed in consultation with the industry,” Economy Minister Bill Boyd said. “To support the mandate, our government introduced the renewable diesel program in the 2011-2012 budget that provides incentive for the production of renewable diesel in the province.” He added the mandate ensures participation and counts toward compliance under Canada’s national directive.

The mandate is an average-based system with a compliance period that extends until December 31, 2014. The mandate does not apply to diesel marketed in Northern Saskatchewan or to aviation fuel.

Weber Appointed to Biomass Committee

Alan Weber, who has served as a consultant on new resources for biodiesel for the National Biodiesel Board (NBB) and vice president of Missouri-based MARC-IV Consulting, has been appointed to serve on the United States Department of Agriculture’s (USDA’s) and Department of Energy’s (DOE’s) Biomass Research and Development Technical Advisory Committee. The all-volunteer committee helps USDA and DOE in meeting important goals of a healthier rural economy and improved national energy security. Weber will advise the agencies on overcoming technical challenges through research and development that will lead to a greatly expanded bio-based industry.

Weber has been involved with biodiesel for more than 20 years, helping establish NBB’s Washington, DC, office. He’s a master’s graduate of the Agricultural Economics program at the University of Missouri, where he served as a program director for industrial uses from renewable resources.

Website Touts Effects of RFS

A new website was launched in late June to raise awareness about the economic, environmental, hunger, and engine performance implications of the current biofuels policy in the United States.

SmarterFuelFuture.org is supported by a number of organizations, including the National Chicken Council and American Meat Institute, which have and will continue to voice concern about the negative effects of the Renewable Fuel Standard (RFS) and other biofuel policies. The groups are calling on lawmakers to revisit the RFS and enact policies that take into account their collective concerns.

SmarterFuelFuture.org’s mission statement states that Americans deserve a policy framework where:
• goals and outcomes are informed by markets, not mandates;
• natural resources are used strategically and efficiently;
• America’s crops and cropland are dedicated to providing food and feed, not fuel;
• consumers’ right to safety and value come first;
• the success of policies and programs are evaluated on real-world performance, and are not vulnerable to fraud and manipulation.

Other organizations involved in the project are the National Turkey Federation, National Council of Chain Restaurants, American Fuel and Petrochemical Manufacturers, Boat Owners Association of the United States, National Marine Manufacturers Association, Competitive Enterprises Institute, and the National Taxpayers Union.


August 2012 RENDER | back