[anigbrowl]

Biodiesel and ethanol are not chemically identical. Ethanol is an alcohol, biodiesel is an ester (a compound of a fat molecule aka a lipid with alcohol). I'm no chemist, but I'm pretty sure you can't just pour ethanol into a diesel vehicle and expect it to function properly.

I have not researched the EPAs classification rules, so possibly there was scope for administrative confusion. But given that Verdeo managed to track the railcar in question well enough to safeguard their property interest and claim the import credits, surely they must have been aware that it was coming on the same railcar every time, a coincidence which strains belief.

As for the last point, the distinction is not between two batches of identical chemical, it's between two different methods of production. I don't care for ethanol subsidies at all because they distort the market in pernicious ways, but I think you're being rather disingenuous here. Given that the subsidy exists, it's entirely possible to develop a functional administrative framework for the correct allocation of the subsidy. Wasteful? Certainly - but that's a policy problem, not a legal one.