
Vertex Energy settlement resolves environmental obligations
Vertex Energy, Inc., a Houston, Texas-based refining company, has reached a landmark settlement with the United States Environmental Protection Agency (EPA) as part of its ongoing Chapter 11 bankruptcy proceedings. The agreement, approved by the U.S. Bankruptcy Court for the Southern District of Texas, resolves compliance obligations under the Clean Air Act and Renewable Fuel Standards (RFS).
Central to the settlement is the commitment by Vertex Energy to retire more than 18 million renewable identification numbers (RINs) by March 31, 2025. RINs are credits used to track compliance with the RFS program. Refiners like Vertex must either blend renewable fuels into their products or purchase RINs to meet their quotas. By retiring RINs, Vertex Energy ensures that these credits cannot be reused or traded, thereby fulfilling their RFS compliance requirements for the specified years.
This action addresses the company’s obligations for both the 2023 and 2024 compliance periods. Vertex Energy, alongside its subsidiary Vertex Refining Alabama LLC, operates a refinery in Mobile, Alabama, with a capacity of 88,000 barrels per day, producing gasoline, ultra-low sulfur diesel, and jet fuel.
The agreement with the EPA resolves past compliance issues under two major U.S. environmental regulations:
- The Clean Air Act: Governs air pollution and includes standards for emissions from industrial facilities like refineries.
- The Renewable Fuel Standards (RFS): Requires refiners and importers to blend renewable fuels, like ethanol or biodiesel, into their fuel supply or to purchase Renewable Identification Numbers (RINs) to meet compliance obligations.
The settlement reflects collaborative efforts to harmonise bankruptcy and environmental law, ensuring continuity in operations while fulfilling federal regulatory requirements. Following the court’s approval, Vertex Energy is set to emerge from bankruptcy under new ownership by early 2025, with the settlement paving the way for a recapitalisation plan.
This resolution underscores the increasing scrutiny on energy companies to meet environmental standards, even amid financial restructuring, and highlights the significance of maintaining compliance with federal laws to ensure operational viability.