By Bruce Pasfield and Elise Paeffgen (April 30, 2013)

Over the last year, the Department of Justice and the Environmental Protection Agency’s Office of Criminal Enforcement have been paying close attention to allegations of fraud in EPA’s renewable fuel standard (RFS) program. Before then, EPA seemed largely unaware of several large schemes that defrauded companies that believed they were purchasing legitimate renewable diesel fuel when in fact they were purchasing “phantom” fuel. To help remedy this problem, EPA recently proposed rules outlining a quality assurance program (QAP) for purchases of renewable diesel fuel. Taken together, EPA's current enforcement actions and rule changes should have a salutary effect on the market for renewable diesel fuel and over the next year, and stabilize the market from the effects of the fraud.