NEW YORK, N.Y. (Reuters)— The U.S. Environmental Protection Agency granted a bankrupt Philadelphia refiner a temporary reprieve from complying with the nation’s renewable fuel laws, according to a settlement agreement filed March 12.
The refiner, Carlyle Group-backed Philadelphia Energy Solutions (PES), filed for bankruptcy protection in January and asked a judge to waive some US$350 million in compliance costs under the U.S. Renewable Fuel Standard (RFS).
The EPA and PES agreed that the refiner would have to pay only about half of the costs but would fall under stricter compliance guidelines moving forward, court documents showed.
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The RFS requires refiners to either blend biofuels like ethanol into their fuel or buy credits from those who do. PES, which lacks blending facilities and a marketing network, entered into bankruptcy owing 467 million credits from 2016 and 2017, and only 210 million credits in hand, the filing showed.
PES blamed its financial woes on the cost of buying credits.
Reuters reported that other factors may also have played a role in the bankruptcy, including the withdrawal of more than $590 million in dividend-style payments from the company by its investor owners.
The EPA said PES can use its available credits to comply with the program but does have to buy more to satisfy the requirements, a huge win for the refiner.
Neither EPA nor PES immediately responded to requests for comment.
