Chevron U.S.A. Inc. has agreed to a settlement with the Justice Department’s Environment and Natural Resources Division (ENRD) following a string of violations involving the Clean Air Act’s Renewable Fuel Standard (RFS) program.
As part of the deal, the energy giant will shell out a civil penalty exceeding $1 million and has already retired credits valued at roughly $3.6 million to make up for the compliance slip-up.
The issue traces back to a disclosure Chevron made in June 2023. The company admitted that between January and August of 2022, it had invalidly generated more than 2.2 million advanced biofuel production credits.
These credits, known in the industry as Renewable Identification Numbers (RINs), were generated for renewable diesel that had already been used to generate previous credits and sold to third parties.
The RFS program acts as a national mandate to swap out traditional fossil fuels for renewable alternatives in transportation, home heating, and jet fuel. Under these rules, credits can only be created once per gallon to prevent “double-counting.”
Because Chevron both produces renewable diesel and imports petroleum, it functions as an “obligated party” that must collect and retire these credits annually.
“Today’s action demonstrates the Administration’s commitment to the Renewable Fuel Standard program by ensuring that Renewable Identification Numbers generated and traded represent actual renewable fuel gallons produced,” said Principal Deputy Assistant Attorney General Adam Gustafson of the ENRD. He noted that the program’s benefits to rural American communities rely heavily on the integrity and reliability of these credits in the open market.
To fix the imbalance before the settlement was finalized, Chevron retired a batch of valid RINs to offset the 2.2 million invalid ones. Federal officials stated that this resolution is intended to maintain public trust in the credit market, which serves as the backbone for the nation’s renewable fuel goals.
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