Yet another reason to get rid of the Renewable Fuel Standard: So much fraud.

There are any number of reasons that Congress should finally kill the Renewable Fuel Standard, that plague of what was once farcically branded as an “green” mandate that requires refiners to blend an ever-increasing volume of certain politically-determined biofuels into the fuel supply or else purchase special credits to exempt themselves from having to do so. Among them: It incidentally highjacks food and gasoline prices, sending them ever higher; it incentivizes farmers to bring marginal lands into production and is actually counterproductive to environmentalist goals on net evaluation; and, oh yeah, its very existence in the form of a national mandate means that it is little more than corporate pork for agribusiness that injects artificial signals into the free market and is not a cost-effective or efficient mechanism with which consumers would willingly abide.

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Back when Congress first enacted this hot mess of a horrible idea, they blithely assumed that Americans’ gasoline consumption would continue at an indefinitely upward clip, but now that a slowed economy and more fuel-efficient vehicles have more or less flat-lined that demand, that whole “ever-increasing biofuel volumes” part of the RFS equation is blowing up in the industry’s collective face.

Oh, and here comes still one more reason to kill the RFS, via Bloomberg:

The U.S. Environmental Protection Agency said it has invalidated 33.5 million renewable-fuel credits sold by an Indiana company for biofuel it didn’t produce, the fourth time the agency has alleged fraud in the program.

The filing today follows fraud charges filed against the former owners of the Indiana-based E-Biofuels LLC in September. The U.S. Justice Department accused them of falsely claiming its products qualified under government incentives for renewable fuels.

… Before today’s action, the agency had said three companies produced a total of 140 million fraudulent Renewable Identification Numbers, or RINs.

The basic credit for ethanol last sold for 28 cents. At today’s value of about 40 cents each for biodiesel, the RINs affected by EPA’s decision would be worth about $13.4 million.

[Sidebar: Remember that one time, last September, when the Paper of Record pretty much tried to blame Wall Street for — horror of horrors — speculating with RINs and “exploiting” the ethanol market? …Hilarious. Just hilarious.]

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Fortunately, bipartisan aversion to the mandate as it stands is catching on, much to Big Ethanol’s dismay. If even the EPA can kinda’-sorta’, not-quite-but-almost admit they were wrong on this one (they elected to decrease next year’s required biofuels volume last month), maybe Congress can get its act together, too.

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Duane Patterson 11:00 AM | December 26, 2024
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