Chevron agrees to pay $1 million civil penalty for RFS violations

The U.S. Department of Justice’s Environment and Natural Resources Division announced a settlement March 11 with Chevron U.S.A. Inc. for violations of the Clean Air Act’s Renewable Fuel Standard program.

Under the agreement, Chevron will pay a civil penalty of just over $1 million and has retired credits worth about $3.6 million to remedy its violations.

In June 2023, Chevron disclosed that, from January 2022 through August 2022, the company invalidly generated over 2.2 million advanced biofuel production credits, known as renewable identification number (RIN) credits, on renewable diesel that had previously been used for RIN generation and sold to third parties.

“Today’s action demonstrates the administration’s commitment to the Renewable Fuel Standard program by ensuring that RINs generated and traded represent actual renewable fuel gallons produced,” said Adam Gustafson, the principal deputy assistant attorney general of ENRD. “The benefits that flow from the RFS program to rural American communities depend on the integrity of program credits, and this action ensures the reliability of RINs in the marketplace.”

Under the RFS program, renewable fuel producers may generate RINs on renewable fuel they produce that is used in the U.S.

RINs may only be generated once on any volume of renewable fuel to prevent the potential double counting.

The RFS program is a national policy that requires a certain volume of renewable fuel be used to replace or reduce the quantity of fossil fuel in transportation fuel, home heating oil or jet fuel.

Refiners and importers, known as “obligated parties,” must acquire and retire a specific number of RINs each year based on the amount of petroleum fuel that they produce and import into the U.S. market.

Obligated parties can acquire RINs by producing renewable fuels themselves and blending that fuel into gasoline or diesel, or by purchasing them from other parties in the RIN market.

Chevron is both a renewable fuel producer and an obligated party because it produces both renewable diesel and petroleum fuels.

Prior to executing the settlement, Chevron retired valid RINs to offset the ones it had generated, worth about $3.6 million.

The success of the RFS program relies on the integrity of the RIN market.

This resolution furthers the goals of, and promotes public trust in, the RFS program.

Attorneys with ENRD’s Environmental Enforcement Section filed the stipulation of settlement with the U.S. District Court for the Southern District of Texas.

The stipulation of settlement is available here.