Genscape says it will fight EPA move to boot it from biofuels program

NEW YORK (Reuters) - Industry energy intelligence company Genscape said it will fight the Environmental Protection Agency’s efforts to revoke the company’s authority to verify biofuels compliance credits under the U.S. renewable fuels program.

The U.S. agency informed Genscape last week that it was seeking to penalize the company for failing to detect a massive fraud perpetrated by companies it was monitoring as part of its Quality Assurance Program, or QAP.

But Genscape disagreed in a written statement last week, saying it would oppose the EPA order.

“Genscape believes it acted responsibly by investigating concerns identified through the implementation of its approved QAP plan, by turning over the results of that investigation to EPA, and by assisting the DOJ (Department of Justice) in its successful pursuit of a series of criminal convictions,” Genscape said.

U.S. regulators discovered that Louisville, Kentucky-based Genscape verified millions of renewable fuel compliance credits that were fraudulently generated in 2013 and 2014 by two companies, Gen-X Energy Group Inc and Southern Resources and Commodities LLC.

Several people have been sentenced to prison and fined for the fraudulent schemes. No one from Genscape has been charged.

The EPA requires U.S. refiners to either blend biofuels such as ethanol into gasoline or buy credits - known as Renewable Identification Numbers (RINs) - from biofuel producers or blenders that are generated for every gallon of renewable produced.

Genscape, part of DMG Information, a division of Daily Mail and General Trust plc, tracks crude oil movements via pipeline and supply disruptions at refineries. It also verifies the authenticity of credits under the U.S. renewable fuel program.

Reporting by Jarrett Renshaw; Editing by Phil Berlowitz