I am 100% sure that counts as illegal disposal of haz waste under RCRA regs. You should not be using that fuel. They are dodging the cost of proper handling of waste product by externalizing it into your vehicle and then leaving you to deal with a gunked-up machine. it would be one thing if they recovered it, processed it for contaminants, and then sold it or gave it away but this is just them saving a few bucks by having you burn their garbage for them inside your car. Plus, if they get called out by the EPA or the local environmental authority, litigation on RCRA waste trickles up AND down the chain so it's likely everyone who took it and used it will be implicated in any rulings, if and when the yard gets caught. It's a **** move and the yard should know better. Ask them if they have any free toilet paper in the bottom of their Port-o-Johns, too, while they are at it. Seems to be their idea of a good time.
Also, I don't know about how your state taxes on/off-road petrol product but this seems like a bush-league tax fraud situation, too, even if they are unawares.
Stay away from people who do dumb crap like this because they are going to make trouble for you and everyone with whom they come into contact.
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