Canada probes scheme to exploit U.S. energy program
A train carrying biodiesel crisscrossed the Canada-US border repeatedly without unloading its cargo, exploiting a loophole in a US green energy program, Canada’s public broadcaster reported Wednesday.
The Canadian Broadcasting Corporation, citing sources who knew of the scheme, said authorities here are investigating Toronto-based Bioversel Trading Inc. which allegedly organized the shipments made in 2010 in order to collect credits under the US Renewable Fuel Standard program.
The US Environmental Protection Agency mandates that oil companies must bring a certain amount of renewable fuel to the US market. They can achieve quotas through blending biofuel with fossil fuel or by purchasing credits as offsets.
When biofuel is exported, any earned credits should be retired, but Bioversel’s American partner Verdeo instead retired an equivalent number of credits generated from ethanol production that were worth pennies compared to biodiesel credits that traded as high as one US dollar apiece when it turned the train around.
A dozen back-and-forth railway trips across the border reportedly cost Can $2.6 million but would have generated biodiesel credits worth US $12 million.
The Canada Border Services Agency and the US Environmental Protection Agency, which administers the market-based credit system, are now investigating, said CBC.