You don’t have to be Sherlock Holmes to figure out that there’s something going on if a train crosses the US-Canada border 12 times back and forth (24 times across the line) without unloading its cargo. The CBC in Canada looked into it, and they discovered that a Toronto-based company was behind this strange behavior, making several million dollars importing and exporting biodiesel to exploit a loophole in a U.S. green energy program.
Here’s the CBC’s segment on it:
Renewable identification numbers (RINs) are credits set up by the EPA to “promote and track production and importation of renewable fuels such as ethanol and biodiesel.” They are valuable because if an oil company doesn’t have enough, it can buy them from others. In this case, the fraudsters…
Bioversel Trading hired CN Rail to import tanker loads of biodiesel to the U.S. to generate RINs, which are valuable in the U.S. because of a “greening” policy regulating the petroleum industry. The EPA’s “Renewable Fuel Standard” mandate that oil companies bring a certain amount of renewable fuel to market, quotas they can achieve through blending biofuel with fossil fuel or by purchasing RINs as offsets.
Because RINs can be generated through import, the 12 trainloads that crossed into Michigan would have contained enough biodiesel to create close to 12 million RINs. In the summer of 2010, biodiesel RINs were selling for 50 cents each, but the price soon fluctuated to more than $1 per credit.
Once “imported” to a company capable of generating RINs, ownership of the biodiesel was transferred to Bioversel’s American partner company, Verdeo, and then exported back to Canada.
Hopefully this media attention will push legislators to close that loophole, and others, and will bring scrutiny to others who have no doubt been doing the same thing as Bioversel.
You don’t have to be Sherlock Holmes to figure out that there’s something going on if a train crosses the US-Canada border 12 times back and forth (24 times across the line) without unloading its cargo.