The 10 Strangest Bioeconomy Storylines of All Time

3. You’re Riding on the RIN Train to Nowhere

Editor’s Note: RINs – the renewable energy credits at the heart of the US Renewable Fuel Standard compliance — are always controversial and rarely out of the news. But never more so than in cases of RIN fraud. Although the “perps” are invariably caught and do some astonishing prison time, while the frauds go on there is money to be made, and Madoffesque profits to be made while the going is good. Not long ago, we had three that particularly caught our attention. In one case, a fraudster managed to buy himself a used Patton tank and a personal jet; in another opera bouffé, a mystery train made repeated border crossings from Canada to the US to register, but never actually deliver, the same batch of fuel.

RIN fraudster. In Texas, court records show that the CEO of Absolute Fuel, one of the companies indicted for selling false RINs, used more than $30 million in revenues to buy a wide variety of luxury goods ranging from a $1.6 million Jetstream personal jet to several homes, and of course, $355,000 on a demilitarized Patton tank.

Train to Nowhere. This story is still unfolding, but here are the essentials. A company is under investigation for transporting the same shipment of biodiesel across the US border 24 times in a compressed period of time, in order to generate renewable fuel credits (RINs). Once the fuel was “imported”, it was “re-exported” back to the US.

The catch, from a RIN-point of view? The company in question, Verdeo, said it was perfectly legal to generate (at the time, $1) biodiesel RINs in the import process and retire (at the time, worth pennies) ethanol RINs in the export process. Total value of the scheme is suspected to run as high as $288 million in RIN credits — the EPA, which is investigating, isn’t saying much at this point.

In Canada, the controversy surrounding US and Canadian biodiesel trade is mounting with the Canadian Broadcasting Corp. revealing documents that CN Rail earned more than $2 million in 2010 for transporting biodiesel back and forth across the border that was never even unloaded.