Colonial Oil to Pay $2.8 Million Penalty for Failure to Meet Clean Air Act Fuels Regulations

Colonial Oil to Pay $2.8 Million Penalty for Failure to Meet Clean Air Act Fuels Regulations

Enforcement action is the first case involving the definition of ocean-going vessel under the Renewable Fuel Standard regulations

April 10, 2024

"Renewable fuels play a critical role in diversifying our country's energy mix and reducing greenhouse gas emissions, all while providing good paying jobs and economic benefits to communities across the country," said Assistant Administrator David M. Uhlmann of the EPA's Office of Enforcement and Compliance Assurance. "This settlement once more puts gasoline and diesel refiners and importers on notice that they must meet their obligations to reduce climate- and health-harming pollution and that there will be consequences if they do not."

Between 2013 and 2019, Colonial excluded certain fuel it supplied to marine vessels from its renewable volume obligations calculations in violation of the RFS regulations. Fuel intended for use only in ocean-going vessels is not required to be included in renewable volume obligation calculations. But not all marine vessels are ocean-going vessels, and volumes supplied to non-oceangoing vessels must be included in such calculations. Colonial's actions resulted in less renewable fuel being used in lieu of gasoline and diesel fuel, causing increased greenhouse gas emissions.

"The creation and use of renewable fuels reduces overall greenhouse gas emissions," said Assistant Attorney General Todd Kim of the Justice Department's Environment and Natural Resources Division. "This proposed settlement will hold Colonial to the same renewable fuel requirements that all importers and producers must adhere to."

Under the RFS program, refiners or importers of gasoline or diesel fuel are required to either blend renewable fuels into transportation fuel or purchase credits known as Renewable Identification Numbers (RINs) to meet their renewable volume obligations. Between 2013 and 2019, Colonial failed to purchase and retire enough RINs. The settlement requires Colonial to purchase and retire over 9 million RINs within two years at an estimated cost of approximately $12.2 million. The RIN purchase and retirements is estimated to result in over 18,300 metric tons of carbon dioxide equivalent reductions which equates to powering 2,386 homes' energy use or 4,355 gasoline cars for a year.

Colonial also sold over a million gallons of gasoline that failed to meet the applicable volatility standard which is intended to reduce evaporative emissions during the summer season from gasoline that contributes to smog and to reduce the effects of ozone-related health problems such as asthma, emphysema and chronic bronchitis.

The proposed settlement, lodged in the U.S. District Court for the Southern District of Georgia, is subject to a 30-day public comment period and final court approval.

Additional Information

For more information about today's settlement, please visit the Colonial Oil Clean Air Act Settlement webpage.

Information on submitting comments is available on the Justice Department's website.