Colonial Oil Industries Inc. must pay a $2.8 million civil penalty and purchase and retire more than 9 million renewable identification numbers (RINs) at an estimated price of $12.2 million under a settlement agreement reached with the U.S. EPA and U.S. Department of Justice on April 10 related to the company’s failure to comply with Renewable Fuel Standard and gasoline volatility regulations.&nbsp;According to the EPA, Colonial between 2013 and 2019 excluded certain fuel it supplied to marine vessels from renewable volume obligations (RVOs) in violation of RFS regulations. While fuel intended for use in ocean-going vessels is not required to be included in RVO calculations, not all marine vessels are ocean-going vessels and fuel volumes supplied to non-oceangoing vessels must be included in such calculations. Colonial’s actions resulted in less renewable fuel being used in lieu of gasoline and diesel fuel, causing increased greenhouse gas (GHG) emissions. The company also sold over 1 million gallons of gasoline that failed to meet he applicable volatility standard.&nbsp;“Renewable fuels play a critical role in diversifying our country’s energy mix and reducing greenhouse gas emissions, all while providing good paying jobs and economic benefits to communities across the country,”&nbsp;said Assistant Administrator David M. Uhlmann of the EPA’s Office of Enforcement and Compliance Assurance. “This settlement once more puts gasoline and diesel refiners and importers on notice that they must meet their obligations to reduce climate- and health-harming pollution and that there will be consequences if they do not.”“The creation and use of renewable fuels reduces overall greenhouse gas emissions,”&nbsp;said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “This proposed settlement will hold Colonial to the same renewable fuel requirements that all importers and producers must adhere to.”Under the proposed settlement agreement, Colonial is required within two years to purchase and retire more than 9 million RINs. The EPA estimates the cost of the RINs to be approximately $12.2 million based on the annual price of RINs in calendar year 2023. Colonial will be required to purchase the minimum number of RINs for each RVO category that is consistent with the type of RINs it would have been required to purchase during the years of noncompliance. This includes 95,814 D3 cellulosic RINs, 1.63 million D4 biomass-based diesel RINs, 343,166 D5 advanced biofuel RINs, and 6.94 million D6 renewable fuel RINs.&nbsp;The settlement agreement, lodged in the U.S. District Court of the Southern District of Georgia, is subject to a 30-day public comment period and final court approval. The Justice Department has not yet scheduled the comment period.&nbsp;Additional information is available on the EPA <a href="https://www.epa.gov/newsreleases/colonial-oil-pay-28-million-penalty-failure-meet-clean-air-act-fuels-regulations">website</a>.

2024-04-11 - Colonial Oil Industries to purchase and retire 9 million RINs due to RFS violations (3 publications)

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Colonial Oil Industries Inc. will pay a $2.8 million civil penalty and purchase and retire 9 million RINs at an estimated price of $12.2 million under a settlement agreement reached with the EPA and Justice Department related to CAA violations. 

Colonial Oil Industries to purchase and retire 9 million RINs due to RFS violations

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