Fri Dec 21, 2012, 05:38 AM
xchrom (105,436 posts)
The Massive Biofuel Fraud Scandal No One's Talking About
Corporate subsidies, in an era of fiscal-cliff attacks on Social Security and Medicare, have dodged attention despite their magnitude and absurdity.
Take the renewable-fuels subsidy ecosystem—and a train of tankers filled with biodiesel that shuttled back and forth across the US-Canadian border twelve times, without unloading its cargo. It generated millions of dollars in profits.
The mystery train was an outgrowth of the EPA’s Renewable Fuel Standard mandate that requires oil companies to blend (subsidized) biofuels with (subsidized) fossil fuels—or alternatively, purchase Renewable Identification Numbers, or RINs, as offsets.
Each RIN is a serial number for a batch of biofuel, such as biodiesel or ethanol. RINs are generated when the biofuel is produced or imported.
Read more: http://www.testosteronepit.com/home/2012/12/20/the-biofuel-subsidy-scams.html#ixzz2FgKBb5dZ
4 replies, 2042 views
The Massive Biofuel Fraud Scandal No One's Talking About (Original post)
Response to xchrom (Original post)
Fri Dec 21, 2012, 06:13 AM
dipsydoodle (42,021 posts)
1. I guess its a type of carousel fraud
see here for how the scam worked in Europe with a different product : http://en.wikipedia.org/wiki/Missing_trader_fraud#Carousel_fraud.
Off topic : watch what happens out in Mali where substantial amounts of land have been converted to sugar plantations for biofuel production. The is far more to the situation out there than simply "Al Q" in the north.
Response to dipsydoodle (Reply #1)
Fri Dec 21, 2012, 07:28 AM
muriel_volestrangler (73,029 posts)
2. They say it may well not have been illegal
It hinges on getting biodiesel credits every time biodiesel is imported; but, when biodiesel was exported, they had the choice of 'retiring' either biodiesel credits, or the cheaper ethanol credits. So they retired ethanol credits - again and again.
The company that organized the train shipment was Bioversel Trading Inc. of Toronto. Its principal, Arie Mazur, gave CBC a detailed explanation this week explaining that the trip was all about RINs — renewable identification numbers — the credits set up by the EPA to promote and track production and importation of renewable fuels such as ethanol and biodiesel.
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. RINs must be "retired" once the fuel is exported from the U.S., but Bioversel says Verdeo retired ethanol RINs, worth pennies, instead of the more valuable biodiesel RINs. Bioversel claims this was all perfectly legal.
Response to muriel_volestrangler (Reply #2)
Fri Dec 21, 2012, 09:44 AM
dipsydoodle (42,021 posts)
3. To prove fraud
its necessary to prove intent to deceive. I guess its taken as read that a breach of the law is also involved somewhere. If in this case there was no actual breach of the law then I'd assume fraud would be difficult to prove.