The EPA runs a program that is supposed to ensure 36 billion gallons of biofuels are blended into the gasoline supply by 2022. Every gallon produced earns something called a renewable identification number, or RINs, which are then sold to and traded among refiners and other “obligated parties” to help meet their annual biofuel quotas. …

Nor was it alone. In the biodiesel market—whose size is second only to corn ethanol—the EPA itself estimates that some 140 million RINs are fraudulent or otherwise invalid, and the true number may amount to as much as 12% of the biodiesel “supply.”

The EPA, however, maintains a “buyer beware” policy that says refiners are responsible for ensuring they buy good RINs, even if they are purchased in good faith from companies certified by the EPA. After the EPA’s enforcement gumshoes raided Clean Green Fuels and deduced that it was a fraud, they did not notify the companies buying these credits for 15 months.