Phillips 66 has been accused of improperly processing renewable diesel, Reuters reports.
Regulators alleged the energy company committed the act in a unit at a refinery in Rodeo, California.
The Rodeo refinery began processing small volumes of soybean oil last year.
However, a public agency’s notice of violation said Phillips 66 did not alter an air permit that allows for the same type of processing with petroleum feedstocks.
Phillips 66 issued a statement saying it disagreed with the allegation.
The company claims it submitted an air permit modification request to the Bay Area Air Quality Management District
Environmental groups have also accused Phillips 66 of not obtaining necessary permits.
Regulators said they would issue enforcement action following the conclusion of an investigation.