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Ethanol Renewable Identification Numbers (RINS)

 

The Environmetal Protection Agency (EPA), under the Energy Independence and Security Act of 2007 is responsible for revising and implementing regulations to ensure that gasoline sold in the United States contains a minimum volume of renewable fuel. The Renewable Fuel Standard program will increase the volume of renewable fuel required to be blended into gasoline from 9 billion gallons in 2008 to 36 billion gallons by 2022. The new RFS program regulations are being developed in collaboration with refiners, renewable fuel producers, and many other stakeholders

Prior to the Energy Independence and Security Act of 2007, Congress directed EPA in the Energy Policy Act of 2005 to design a program that requires the blending of renewable fuels into our nation’s motor-vehicle fuel supply. This program is called the Renewable Fuel Standard. 

At the time, the RFS program requires increasing the use of renewable fuels every year through 2012. For 2007, a minimum of 4% of fuel dispensed to U.S. motorists shall come from renewable sources (a floor of 4.7 billion gallons). By 2012, at least 7.5 billion gallons of renewable fuel must be blended into motor-vehicle fuel sold in America. After 2012, renewable fuel use is required to grow in volume as gasoline demand grows. In 2006, American refiners, blenders, and importers used 5.4 billion gallons of renewable fuel -- almost 25% more than was required for that year.

 

 

Got RINs?

RINs, an environmental "currency" created by the EPA, may play a large role in increasing the use of renewable energy.
by John Gelbard, RINXchange

In an effort to decrease consumption of oil in the United States, Congress tasked the Environmental Protection Agency (EPA) to "promulgate regulations to ensure that gasoline sold or introduced into commerce in the United States, on an annual average basis, contains the applicable volume of renewable fuel" (1501 Energy Policy Act 2005).

This in turn led to the Renewable Fuels Standard (RFS), which became effective September 1, 2007. The RFS raises the amount of renewable fuels to be used in gasoline in the United States from 8 billions barrels in 2008 to 36 billion by 2022.

The Birth of RINs

In order to monitor this mandated increase in renewable energy production, the EPA required that each gallon of renewable fuel produced have a unique serial number attached to it. These "Renewable Identification Numbers (RINs)" are then turned into the EPA each year by petroleum refiners to prove that they have blended the required amount of renewable fuel into their gasoline. However, refiners can get around blending renewables into gasoline themselves by purchasing excess RINs from refiners who have used more renewable fuel than was required of them.

Further, anyone who is registered with the EPA can buy and sell RINs, which means that RINs function as somewhat of a currency.

Technical Difficulties

Conceptually, RINs are a simple idea, but the technical aspects of the RINs can be intricate and complex.

A RIN is a 38-digit number that contains the entire DNA of the fuel it identifies (year of production, producer ID, facility ID, equivalence value, batch number, cellulosic/non-cellulosic, etc.) This 38-digit number can also represent any volume of fuel from 1 gallon to 99,999,999 gallons. So where one RIN may represent 5 gallons of ethanol, another RIN may represent 50,000 gallons of biodiesel. (Click the link at the bottom of this article to see a chart that explains the makeup of RINs.)

Each transfer of ownership (first the unassigned RINs with their respective fuel, and later the transfer of separated RINs among market participants) requires submitting long sequences of these 38-digit numbers to the EPA. A typical transaction representing 500,000 gallons of renewable fuel might involve as many as 100 individual RINs.

Submitting so many long and unwieldy numbers means that the system is fraught with potential errors.

Additionally, there is no available database that allows buyers to verify and validate RINs. Even if there were such a database, the information would not be available until after each quarterly filing deadline. Market participants may therefore be unnecessarily exposed to counterparty risk.

To help highlight the complexity, think of it this way: What if the IRS demanded the individual serial numbers of dollar bills from merchants every time they sold items for cash? Simple transactions would require cumbersome bookkeeping and accounting tasks to be performed on a routine basis.

The selection of 38-digit numbers to monitor compliance represents a deliberate choice by our previous administration. The rest of the world may prefer to regulate emissions via cap and trade systems, but the U.S. refused to sign the Kyoto Protocol in 1997 and has been unwilling to embrace carbon credit programs of any kind.

It is hoped that this shortcoming will be addressed by upcoming revisions to the RFS program in 2009.

Other Possibilities

In addition to the meeting the requirements of the RFS, RINs could be turned into an instrument for other advancements of the U.S.'s environmental policy by using them as a government sanctioned "currency."

Congress could, for example, sponsor legislation to issue RINs to encourage and reward the building of power plants and factories with reduced greenhouse gas emissions. RINs might also be issued to encourage fleet conversion to Flex-Fueled Vehicles and to manufacturers of electric vehicles and lawn mowers. Solar power and wind power could also qualify for RIN credits. The choices are limitless.

Additionally, the purchasing of RINs could become an attractive strategy for corporate public relations campaigns. To demonstrate their commitment to sustainability and the neutralization of their "carbon footprints" corporations could purchase RINs and retire them. This gesture would remove a given amount of RINs from circulation, decreasing supply in the market. Since motor fuel refiners and importers continue to have to submit RINs to be compliant with the Renewable Fuel Standard, more renewable fuels would have to be produced to bring necessary supply back into the RIN markets.

Purchasing RINs for the PR value would present an attractive alternative to the increasingly common purchase of Carbon Credits by corporate entities for the same purpose. After all, RINs are regulated in the United States by the EPA and readily identifiable with unique serial numbers. Currently, the same cannot be said of Carbon Credits.

It should be noted however, that these novel applications of the original RIN concept are not without risks. Should the delicate balance between supply and demand become unhinged, price pressures could easily push the value of RINs to levels where compliance with the RFS would cause RIN (and motor fuel) prices to rise significantly. In such a scenario, political pressures might then be brought to bear on the EPA to lower the renewable fuel standard thereby reducing fuel prices, similar to what happened this summer, when crude oil and crop price spikes prompted several states (led by Texas) to petition the EPA to relax the RFS for 2008. Folowing several months of dddeliberation this request was turned down.

One of the most compelling components of the RIN program is the unrestricted ability to freely trade RINs among EPA registered entities. The EPA expressly permitted non-stakeholders to buy and sell RINs, provided they are registered with the EPA and file quarterly reports. Since being listed on an electronic exchange, (RINXchange) there has been significant interest in trading RINs, not only by "stakeholders" (blenders, marketers and producers of renewable energy), but also from participants in the financial markets.

A Look Ahead

While the RIN market is currently liquid and groups like RINXchange are bringing much needed price discovery to the marketplace, RIN trading does not yet permit selling "short," an important functionality in any financial market. It is expected that short selling will soon enter into the RIN markets offering all participants greater liquidity and additional hedging opportunities.

Many in Washington, including the Obama administration have stressed the importance of reducing the country's dependence on foreign oil and reducing green house gas emissions. It will be interesting to see how RINs and the RFS will impact these goals. Already in 2009, the RFS will require that 11.1 billion barrels of produced and consumed, 3.1 billion more barrels than in 2008.

John D. Gelbard is the co-founder and CEO of the RINXchange, an online marketplace for the buying and selling of RINs. He is also Senior Vice President of I.A.Englander & Co., one of the largest independent derivatives brokerage firms in the United States. Mr. Gelbard has been a member of the American Stock Exchange since 1977. He is the former Chairman of The Option Market Makers Association, has served on the Nominating Committee of the Amex Board of Governors, and was instrumental in the development and implementation of strategic new products at the Exchange. He has also been a member of the COMEX, the CBOE, and the NYFE.

RINMARK™ Launches First Renewable Fuels Credit Trading
Exchange

Contact: 212-943-1400 FOR IMMEDIATE RELEASE
info@rinmark.com


New York, NY, January 15, 2008 - Answering the Nation’s call for dramatic increases in renewable fuel use over the next 10 years, Renewable Trading Services, LLC announced today the launch of RINMARK™, an Internet based exchange platform for the purpose of trading RIN credits in the United States. The RINMARK™ exchange addresses each of the trading
requirements established in the EPA’s final rule for the Renewable Fuel Standard (RFS), first implemented on September 1, 2007 and since expanded with the passage of the 2007 Energy Bill.


Trading will begin January 30, 2008, following a web based conference (RIN Trading Webinar) on January 16, 2008. The next phase of electronic trading will commence by the end of the first quarter of this year. The RIN Trading Webinar will be hosted by the RINSTAR™ Renewable Fuel Registry and will serve to introduce participants from all over the industry to the new
exchange and the economic factors which will drive the market.

Registration for the webinar is offered on a first-come first-served basis at www.RINMARK.com. “This state-of-the-art RIN Exchange platform has been designed by Belzberg Technologies Inc., with both business and the
financial institutions in mind. By working with the Renewable Fuel Registry we are able to deliver verifiable RINs to the marketplace, day-in and day-out”, said Stephen Tobias, president of Renewable Trading Services, LLC.

The Renewable Fuels, Consumer Protection, and Energy Efficiency Act of 2007, has been the legislative vehicle of choice for reducing the carbon footprint of motor fuels on the environment in the United States. With a new CAFÉ standard of 35 mpg and a Renewable Fuel Standard
(RFS) that increases previously mandated levels by over 300%, the new laws effectively serve to drive industry towards more environmentally responsible alternatives.

At the heart of the RFS is a credit trading program based upon the Renewable Identification Number (RIN). RINs are serial numbers assigned to ethanol and other bio-fuels when originally manufactured or otherwise introduced into the U.S. marketplace by producers or importers. Companies throughout the renewable fuel and petroleum supply chain are participating on the RINSTAR™
Renewable Fuel Registry, where RIN numbers are registered and validated before transferring title to another party. “We have already handled 39,321 individual transactions on RINSTAR™, accounting for validation of over 600 million gallon-RINs in the first 4 months of operation”, said
Clayton McMartin, president of the Clean Fuels Clearinghouse – developer and administrating company of the RINSTAR™ Renewable Fuel Registry. The independent 3rd party registry provides the industry with its patent pending validation service, delivering the confidence that environmental credit traders require when executing strategic business plans built upon this emerging market.


Renewable Trading Services, LLC is being formed by AgriFuels, LLC, Belzberg Technologies (USA) Inc., I.A. Englander & Co. Inc. and Freedom Group Inc. delivering an electronic environmental credit exchange platform open to all parties interested in trading RINs. RINSTAR™ Renewable Fuels Registry is a product of Clean Fuels Clearinghouse, a company formed in 2001 for the purpose of delivering business solutions for cleaner fuels.

 

EPA Keeps Biofuels Levels in Place after Considering Texas’ Request

Release date: 08/07/2008, Contact Information: Jonathan Shradar, (202) 564-4355 / shradar.jonathan@epa.gov

(Washington, DC – August 7, 2008) Following extensive analysis, U.S. Environmental Protection Agency (EPA) Administrator Stephen L. Johnson today announced his decision to deny a request submitted by the State of Texas to reduce the nationwide Renewable Fuels Standard (RFS). As a result, the required total volume of renewable fuels, such as ethanol and biodiesel, mandated by law to be blended into the fuel supply will remain at 9 billion gallons in 2008 and 11.1 billion gallons in 2009.

“After reviewing the facts, it was clear this request did not meet the criteria in the law,” said EPA Administrator Stephen L. Johnson. “The RFS remains an important tool in our ongoing efforts to reduce America’s greenhouse gas emissions and lessen our dependence on foreign oil, in aggressive yet practical ways.”

Current law authorizes EPA to waive the national RFS if the agency determines that the mandated biofuel volumes would cause “severe harm” to the economy or the environment. The agency recognizes that high commodity prices are having economic impacts, but EPA’s extensive analysis of Texas’ request found no compelling evidence that the RFS mandate is causing severe economic harm during the time period specified by Texas.

The Energy Policy Act of 2005 established the RFS program – and included amendments to the Clean Air Act to set strict criteria for RFS-related waivers. RFS nationwide volume mandates were increased in the Energy Independence and Security Act, which was signed into law in December 2007.

EPA conducted detailed analysis, consulted closely with the Departments of Energy and Agriculture, and carefully considered more than 15,000 public comments in response to the Texas request.

This is the first RFS-related waiver request. In a Federal Register notice, EPA is publishing a detailed rationale that will also serve as a framework for any future waiver considerations.

About RINXchange

RINXchange is an online marketplace for buyers and sellers of Renewable Fuel Identification Numbers (RINs). The goal of RINXchange is to provide an efficient, fast and neutral platform for improved price discovery, overcoming the inherent limitations of the predominately broker driven RIN trading process currently used. RINXchange is open to all parties registered with
the EPA under the Renewable Fuel Standard (RFS) program, including producers, importers, blenders, marketers, petroleum refiners, brokers and investors.


What Are RINs? Renewable Identification Numbers were devised by the EPA as a way to ensure compliance with the RFS program, which mandates an average annual minimum percentage of renewable fuel that must be in each gallon of gasoline and diesel fuel. For 2008, the EPA has mandated that all gasoline and diesel fuel sold for road-based motor vehicles be made up of 7.8% renewable fuel. To ensure this level is reached, refiners and
importers are obligated to submit to the EPA 7.8 RINs (representing 7.8 gallons of renewables) for every 100 gallons of petroleum-based fuel they produce or import.

RINs, which act as renewable fuel credits, are assigned for each batch of renewable fuel entering the US fuel supply chain. One to 2.5 RINs are created for each gallon of renewable fuel (the exact number is based on a rather complex calculation designed to encourage production of different renewable fuel types).

The RIN Marketplace - Under the 7.8% RFS mandate, RINs represent a $500 million market, with almost 30 million new RINs created each day and an estimated 8 to 9 billion RINs projected for 2008. When biofuels are blended with standard gasoline or diesel fuel, blenders are required to
separate their associated RINs, at which time they can be bought and sold independent of the blended fuel.

The RIN market has three primary participants:
• Refiners and Importers. Termed by the EPA as obligated parties, these companies must submit RINs equal to 7.8% of motor fuel refined or imported. They may find it more cost effective to buy mandated RINs rather than transport and blend renewable fuels, or they might need additional RINs to meet their mandated levels. Conversely, obligated parties that accumulate more RINs than they need may sell them to other RIN market participants for a meaningful new revenue stream in an industry with very slight margins.

• Blenders and Marketers. Any party which adds renewable fuels to gasoline or diesel fuel and must strip the RINs from the underlying fuel and sell them into the marketplace, thereby reducing their cost and monetizing the RINs value.

• Speculators and Hedgers. Buyers also may be entities trying to predict the direction of RIN prices, energy prices, carbon credit values and other energy markets, or those hedging positions in these same markets. In addition, as RINs gain traction, it is expected that sustainability-driven corporate entities, as well as political or environmental organizations may purchase RINs to remove them from the marketplace, forcing increased production of renewable fuels.

Founding Companies - RINXchange was developed with the complementary expertise of biofuel, trading and technology firms of AgriFuel, I.A. Englander and Belzberg, respectively.

Media Contacts David Carlson Josh Inglis
dcarlson@strategicsinc.com jinglis@strategicsinc.com
312-346-2006 312-346-2007
RINXchange John Gelbard, CEO
55 Broad Street, 28th Floor, New York, NY 10004
212-841-4439
www.rinxchange.com

 

EPA RIN Registration Information

Before selling fuel, producers must register first with Fuel and Fuel Additives Registration (FFARS) program then the RFS program. The FFARS program is a completely separate program from the RFS program, each having its own separate registration process.

More information about FFARS may be found at http://www.epa.gov/otaq/additive.htm. The FFARS registration forms may be found at http://epa.gov/otaq/regs/fuels/ffarsfrms.htm.


For the RFS program, ethanol producers must register their company and each facility at which they produce ethanol [40 CFR 80.1150(b)]. The registration forms can be found at http://www.epa.gov/otaq/regs/fuels/fuelsregistration.htm.


Ethanol producers are required to fill out one 3520-20A for the company and one 3520-20B for each facility. On form 3520-20A, ethanol producers are required to select “RFS” for question 7 and “RIN Generator” for question 8. On form 3520-20B, ethanol producers need to select “RIN generator.” After the forms are received, EPA will provide the ethanol producer with its Company and Facility IDs for the RFS program. (Remember that registration numbers discussed above for FFARS are not the appropriate registration numbers to be utilized in the RFS program and the generation of RINs, as discussed below.)

RIN Generation - RINs refer to Renewable Identification Numbers. Producers and importers of renewable fuel must generate RINs to represent all the renewable fuel they produce or import. The point in time when RINs must be generated is flexible, but no later than when the renewable fuel is transferred to another party [40 CFR 80.1126(e) (2)]. Total number of “gallon-RINs” that can be generated is determined from both the volume of fuel and its equivalence value. For ethanol, the equivalence value is
1.0 [40 CFR 80.1115(b)(2)]. For other renewable fuels, the equivalence value is set forth in the RFS regulations, and reflects the difference in BTU value as compared to ethanol. For more information on the structure of a RIN, see 40 CFR 80.1125.


Transfer RINs: Moving RINs With Fuel and Selling Ethanol. All renewable producers/importers that sell only the fuel that they create or import must transfer RINs with fuel to the next party at the equivalence value. For ethanol, that is 1 RIN per gallon sold to the next party. RINs can only be transferred to parties registered for the RFS program; therefore renewable producers/importers that sell only the fuel they create or import can only sell to registered parties. [40 CFR 80.1128(a)(6)]. Renewable producers and importers that sell a volume of renewable fuel in addition to their own may sell between zero and 2.5 RINs to any party [40 CFR 80.1128(a)(4)]. RINs may only be sold to registered companies, but any company may purchase ethanol without RINs.


Product Transfer Documents - All parties that transfer renewable fuel must follow the Product Transfer Document (PTD) regulations per 40 CFR 80.1153. Every product transfer document must have the following information: Name and address of the transferor and transferee; The transferor’s and transferee’s company registration number; The volume of fuel transferred; The date of transfer.

A list of RINs assigned to the volume [40 CFR 80.1153(a)(5)]; alternatively, assigned RINs may be transferred on a separate document to the same party on the same day. If a separate document is used to transfer the RINs, the PTD that transfers ownership of the fuel must state the number of “gallon-RINs” transferred and reference the document used to transfer the RINs.
If no assigned RINs are being transferred with renewable fuel, the PTD which is used to transfer ownership of the fuel shall state “No RINs Transferred.”


Blending - Blenders of renewable fuel that create motor vehicle fuel (for example by blending ethanol with gasoline to produce E-85 or E-10), must separate RINs associated with the volume of renewable fuel [40 CFR 80.1129(b)(2)]. In addition, renewable fuel producers may, upon agreement with their customers, separate RINs from fuel in situations where customers are “splash blending.”

Blenders of renewable fuel with assigned RINs, must separate the RINs and change the first digit (K code) of the RINs from 1 to 2 during the compliance quarter when the blending took place and before transferring those RINs to another party.


Exporting - Any company that exports renewable fuel in its neat form or blended with gasoline or diesel outside of the lower 48 states [40 CFR 80.1126(a)] (and after January 1, 2007, Hawaii) has a Renewable Volume Obligation (RVO). The RVO for exporters is determined by retiring RINs equal to the volume of fuel exported times the equivalence value, plus any prior year deficit. A producer that exports renewable fuel, must generate RINs for that volume, and upon export, separate those RINs [40 CFR 80.1129(b)(3)]. At the end of the compliance year, the exporter must determine its RVO [40 CFR 80.1130(b)]. In the event that an exporter does not have enough separated RINs to cover their RVO, they must acquire separated RINs to meet the RVO [40 CFR 80.1130(a)].


Non-Road Use of Fuel - EPA believes that most fuel that can be used as motor vehicle fuel and which otherwise meets the definition of “renewable fuel” (such as biodiesel and ethanol) will ultimately be used as motor vehicle fuel. Therefore, producers and importers of such products can assume that they meet the definition of “renewable fuel” and can assign RINs to them without tracking their ultimate use. However, if fuel with assigned RINs is actually blended into gasoline or diesel that is known to be destined for use in a nonroad application, such as agricultural equipment, the presumption that led the fuel producer/importer to assign RINs to the product is no longer valid. Such fuel cannot be considered a motor vehicle fuel and thus is not in fact a “renewable fuel” that is valid for RFS compliance purposes. In such cases, the blender should treat the RINs associated with the blended fuel in the same way as for fuel with assigned RINs that is used in a heater or boiler.
If a producer/importer is transferring a volume of fuel to a party and knows the fuel is going off-road, then the producer/importer should not generate RINs for that volume.


Recordkeeping Requirements - Renewable producers and importers, obligated parties and owners of RINs who are neither renewable producers/importer nor obligated parties have several record keeping requirements. 40 CFR 80.1151(e) states records must be kept for 5 years.
Renewable producers and importers are required to report on a quarterly basis to the EPA (40 CFR 80.1152). The reporting templates are located at: http://epa.gov/otaq/regs/fuels/rfsforms.htm . All renewable producers and importers are required to fill out three of these reports quarterly; RFS Activity Report (RFS0100), RFS RIN Transaction Report (RFS0200), and RFS RIN Generation Report (RFS0400). Exporters of renewable fuel and obligated parties must also use the annual RFS Obligated Party Annual Compliance Report (RFS0300).

RFS Activity Report (RFS0100): Two reports required quarterly. One report for attached RINs and one report for separated RINs. Producers must indicate how many RINs they generated in the quarter and how many they transferred, in addition to any other RIN activities that apply.

RFS RIN Transaction Report (RFS0200) One report submitted per transaction.

RFS RIN Generation Report (RFS0400) One report submitted per batch.
All reports must be submitted via EPA’s Central Data Exchange (CDX). CDX is an online portal that encrypts and sends reports to the EPA. In order for companies to use CDX they must register users well in advance of the reporting deadline.


CDX registration is based on individual users rather than corporate accounts. Responsible corporate officers of a company may register themselves or delegate the ability to submit reports to another person. Responsible corporate officers are still responsible for their delegates’ submissions.


Attest Engagements
- All producers must perform an “attest engagement” of the reports submitted to EPA. The attest engagements must be performed by a Certified Public Accountant or Certified Internal Auditor as per the regulations and they must mail a copy to the EPA.

 

RIN Details

Renewable Identification Numbers (RINs).
Each RIN is a 38 character numeric code of the following form:


KYYYYCCCCFFFFFBBBBBRRDSSSSSSSSEEEEEEEE

 


(a) K is a number identifying the type of RIN as follows:
(1) K has the value of 1 when the RIN is assigned to a volume of renewable fuel pursuant to §§ 80.1126(e) and 80.1128(a).
(2) K has the value of 2 when the RIN has been separated from a volume of renewable fuel pursuant to §80.1126(e)(4) or §80.1129.


(b) YYYY is the calendar year in which the batch of renewable fuel was produced or imported. YYYY also represents the year in which the RIN was originally generated.


(c) CCCC is the registration number assigned according to §80.1150 to the producer or importer of the batch of renewable fuel.


(d) FFFFF is the registration number assigned according to §80.1150 to the facility at which the batch of renewable fuel was produced or imported.


(e) BBBBB is a serial number assigned to the batch which is chosen by the producer or importer of the batch such that no two batches have the same value in a given calendar year.


(f) RR is a number representing the equivalence value of the renewable fuel as specified in §80.1115 and multiplied by 10 to produce the value for RR.


(g) D is a number identifying the type of renewable fuel, as follows:
(1) D has the value of 1 if the renewable fuel can be categorized as cellulosic biomass ethanol as defined in §80.1101(a).
(2) D has the value of 2 if the renewable fuel cannot be categorized as cellulosic biomass ethanol as defined in §80.1101(a).


(h) SSSSSSSS is a number representing the first gallon-RIN associated with a batch of renewable fuel.


(i) EEEEEEEE is a number representing the last gallon-RIN associated with a batch of renewable fuel. EEEEEEEE will be identical to SSSSSSSS if the batch-
represents a single gallon-RIN. Assign the value of EEEEEEEE as described in §80.1126.


How are RINs generated and assigned to batches of renewable fuel by renewable fuel producers or importers?


(a) Regional applicability.
(1) Except as provided in paragraph (b) of this section, a RIN must be assigned by a renewable fuel producer or importer to every batch of renewable fuel produced by a facility located in the contiguous 48 states of the United States, or imported into the contiguous 48 states.
(2) If the Administrator approves a petition of Alaska, Hawaii, or a United States territory to opt-in to the renewable fuel program under the provisions in §80.1143, then the requirements of paragraph (a)(1) of this section shall also apply to renewable fuel produced or imported into that state or territory beginning in the next calendar year.


(b) Volume threshold. Renewable fuel producers located within the United States that produce less than 10,000 gallons of renewable fuel each year, and importers that import less than 10,000 gallons of renewable fuel each year, are not required to generate and assign RINs to batches of renewable fuel. Such producers and importers are also exempt from the registration, reporting, and recordkeeping requirements of §§80.1150-80.1152. However, for such producers and importers that voluntarily generate and assign RINs, all the requirements of this subpart apply.


(c) Definition of batch. For the purposes of this section and §80.1125, a "batch of renewable fuel" is a volume of renewable fuel that has been assigned a unique RIN code BBBBB within a calendar year by the producer or importer of the renewable fuel in accordance with the provisions of this section and §80.1125.
(1) The number of gallon-RINs generated for a batch of renewable fuel may not exceed 99,999,999.
(2) A batch of renewable fuel cannot represent renewable fuel produced or imported in excess of one calendar month.


(d) Generation of RINs.
(1) Except as provided in paragraph (b) of this section, the producer or importer of a batch of renewable fuel must generate RINs for that batch, including any renewable fuel contained in imported gasoline.
(2) A producer or importer of renewable fuel may generate RINs for volumes of renewable fuel that it owns on September 1, 2007.
(3) A party generating a RIN shall specify the appropriate numerical values for each component of the RIN in accordance with the provisions of §80.1125 and this paragraph (d).

yyyyyyyyyyyyyyyyyyyyy


What are the recordkeeping requirements
under the RFS program?

 


(a) Beginning September 1, 2007, any obligated party (as described at §80.1106) or exporter of renewable fuel (as described at §80.1130) must keep all of the following records:
(1) Product transfer documents consistent with §80.1153 and associated with the obligated party’s activity, if any, as transferor or transferee of renewable fuel.
(2) Copies of all reports submitted to EPA under §80.1152(a).
(3) Records related to each RIN transaction, which includes all the following:
(i) A list of the RINs owned, purchased, sold, retired or expired.
(ii) The parties involved in each RIN transaction including the transferor, transferee, and any broker or agent.
(iii) The date of the transfer of the RIN(s).
(iv) Additional information related to details of the transaction and its terms.
(4) Records related to the use of RINs (by facility, if applicable) for compliance, which includes all the following:
(i) Methods and variables used to calculate the Renewable Volume Obligation pursuant to §80.1107 or §80.1130.
(ii) List of RINs used to demonstrate compliance.
(iii) Additional information related to details of RIN use for compliance.


(b) Beginning September 1, 2007, any producer or importer of a renewable fuel as defined at §80.1101(d) must keep all of the following records:
(1) Product transfer documents consistent with §80.1153 and associated with the renewable fuel producer’s or importer’s activity, if any, as transferor or transferee of renewable fuel.
(2) Copies of all reports submitted to EPA under §80.1152(b).
(3) Records related to the generation and assignment of RINs for each facility, including all of the following:
252
(i) Batch volume in gallons.
(ii) Batch number.
(iii) RIN number as assigned under §80.1126.
(iv) Identification of batches meeting the definition of cellulosic biomass ethanol.
(v) Date of production or import.
(vi) Results of any laboratory analysis of batch chemical composition or physical properties.
(vii) Additional information related to details of RIN generation.
(4) Records related to each RIN transaction, including all of the following:
(i) A list of the RINs owned, purchased, sold, retired or expired.
(ii) The parties involved in each transaction including the transferor, transferee, and any broker or agent.
(iii) The date of the transfer of the RIN(s).
(iv) Additional information related to details of the transaction and its terms.
(5) Records related to the production or importation of any volume of renewable fuel that the renewable fuel producer or importer designates as motor vehicle fuel and the use of the fuel as motor vehicle fuel.


(c) Beginning September 1, 2007, any producer of a renewable fuel defined at §80.1101(d) must keep verifiable records of the following:
(1) The amount and type of fossil fuel and waste material-derived fuel used in producing on-site thermal energy dedicated to the production of ethanol at plants producing cellulosic biomass ethanol through the displacement of 90 percent or more of the fossil fuel normally used in the production of ethanol, as described at §80.1101(a)(2).
(2) The amount and type of feedstocks used in producing cellulosic biomass ethanol as defined in §80.1101(a)(1).
(3) The equivalent amount of fossil fuel (based on reasonable estimates) associated with the use of off-site generated waste heat that is used in the production of ethanol at plants producing cellulosic biomass ethanol through the displacement of 90 percent or more of the fossil fuel normally used in the production of ethanol, as described at §80.1101(a)(2).
(4) The plot plan and process flow diagram for plants producing cellulosic biomass and waste derived ethanol as defined in §80.1101(a) and (b), respectively.
(5) The independent third party verification required under §80.1155 for producers of cellulosic biomass ethanol and waste derived ethanol.


(d) Beginning September 1, 2007, any party, other than those parties covered in paragraphs (a) and (b) of this section, that owns RINs must keep all of the following records:
(1) Product transfer documents consistent with §80.1153 and associated with the party’s activity, if any, as transferor or transferee of renewable fuel.
(2) Copies of all reports submitted to EPA under §80.1152(c).
(3) Records related to each RIN transaction, including all of the following:
(i) A list of the RINs owned, purchased, sold, retired or expired.
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(ii) The parties involved in each RIN transaction including the transferor, transferee, and any broker or agent.
(iii) The date of the transfer of the RIN(s). (iv) Additional information related to details of the transaction and its terms.


(e) The records required under this section and under §80.1153 shall be kept for five years from the date they were created, except that records related to transactions involving RINs shall be kept for five years from the date of transfer.


(f) On request by EPA, the records required under this section and under §80.1153 must be made available to the Administrator or the Administrator’s authorized representative. For records that are electronically generated or maintained, the equipment or software necessary to read the records shall be made available; or, if requested by EPA, electronic records shall be converted to paper documents

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What are the reporting requirements
under the RFS program?

(a) Any obligated party described in §80.1106 or exporter of renewable fuel described in §80.1130 must submit to EPA reports according to the schedule, and containing the information, that is set forth in this paragraph (a).
(1) An annual compliance demonstration report for the previous compliance period shall be submitted every February 28, except as noted in paragraph (a)(1)(x) of this section, and shall include all of the following information:
(i) The obligated party’s name.
(ii) The EPA company registration number.
(iii) Whether the party is complying on a corporate (aggregate) or facility-by-facility basis.
(iv) The EPA facility registration number, if complying on a facility-by-facility basis.
(v) The production volume of all of the products listed in §80.1107(c) for the reporting year.
(vi) The renewable volume obligation (RVO), as defined in §80.1127(a) for obligated parties and §80.1130(b) for exporters of renewable fuel, for the reporting year.
(vii) Any deficit RVO carried over from the previous year.
(viii) The total current-year gallon-RINs used for compliance.
(ix) The total prior-years gallon-RINs used for compliance.
(x) A list of all RINs used for compliance in the reporting year. For compliance demonstrations covering calendar year 2007 only, this list shall be reported by May 31, 2008. In all subsequent years, this list shall be submitted by February 28.
(xi) Any deficit RVO carried into the subsequent year.
(xii) Any additional information that the Administrator may require.
(2) The quarterly RIN transaction reports required under paragraph (c)(1) of this section.
(3) The quarterly gallon-RIN activity reports required under paragraph (c)(2) of this section.
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(4) Reports required under this paragraph (a) must be signed and certified as meeting all the applicable requirements of this subpart by the owner or a responsible corporate officer of the obligated party.


(b) Any producer or importer of a renewable fuel must, beginning November 30, 2007, submit to EPA reports according to the schedule, and containing the information, that is set forth in this paragraph (b).
(1) A quarterly RIN-generation report for each facility owned by the renewable fuel producer, and each importer, shall be submitted according to the schedule specified in paragraph (d) of this section, and shall include for the reporting period all of the following information for each batch of renewable fuel produced or imported, where “batch” means a discreet quantity of renewable fuel produced or imported and assigned a unique RIN:
(i) The renewable fuel producer’s or importer’s name.
(ii) The EPA company registration number.
(iii) The EPA facility registration number.
(iv) The applicable quarterly reporting period.
(v) The RINs generated for each batch according to §80.1126.
(vi) The production date of each batch.
(vii) The type of renewable fuel of each batch, as defined in §80.1101(d).
(viii) Information related to the volume of denaturant and applicable equivalence value of each batch.
(ix) The volume of each batch produced or imported.
(x) Any additional information the Administrator may require.
(2) The RIN transaction reports required under paragraph (c)(1) of this section.
(3) The quarterly gallon-RIN activity report required under paragraph (c)(2) of this section.
(4) Reports required under this paragraph (b) must be signed and certified as meeting all the applicable requirements of this subpart by the owner or a responsible corporate officer of the renewable fuel producer.


(c) Any party, including any party specified in paragraphs (a) and (b) of this section, that owns RINs during a reporting period must, beginning November 30, 2007, submit reports to EPA according to the schedule, and containing the information, that is set forth in this paragraph (c).
(1) A RIN transaction report for each RIN transaction shall be submitted by the end of the quarter in which the transaction occurred, according to the schedule specified in paragraph (d) of this section. Each report shall include all of the following:
(i) The submitting party’s name.
(ii) The party’s EPA company registration number.
(iii) The party’s facility registration number, if the report required under paragraph (c)(2) of this section is submitted on a facility-by-facility basis.
(iv) The applicable quarterly reporting period.
(v) Transaction type (RIN purchase, RIN sale, expired RIN, retired RIN).
(vi) Transaction date.
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(vii) For a RIN purchase or sale, the trading partner’s name.
(viii) For a RIN purchase or sale, the trading partner’s EPA company registration number. For all other transactions, the submitting party’s EPA company registration number.
(ix) RIN subject to the transaction.
(x) For a retired RIN, the reason for retiring the RIN (e.g., reportable spill under §80.1132, import volume correction under §80.1166(k), renewable fuel used in boiler or heater under §80.1129(e), enforcement obligation).
(xi) Any additional information that the Administrator may require.
(2) A quarterly gallon-RIN activity report shall be submitted to EPA according to the schedule specified in paragraph (d) of this section. Each report shall summarize gallon-RIN activities for the reporting period, separately for RINs separated from a renewable fuel volume and RINs assigned to a renewable fuel volume. A RIN owner with more than one facility may submit the report required under this paragraph for each of its facilities individually, or for all of its facilities in the aggregate. The quarterly gallon-RIN activity report shall include all of the following information:
(i) The submitting party’s name.
(ii) The party’s EPA company registration number.
(iii) Whether the party is submitting the report required under this paragraph on a corporate (aggregate) or facility-by-facility basis.
(iv) The party’s EPA facility registration number, if the report required under this paragraph is submitted on a facility-by-facility basis.
(v) Number of current-year gallon-RINs owned at the start of the quarter.
(vi) Number of prior-years gallon-RINs owned at the start of the quarter.
(vii) The total current-year gallon-RINs purchased.
(viii) The total prior-years gallon-RINs purchased.
(ix) The total current-year gallon-RINs sold.
(x) The total prior-years gallon-RINs sold.
(xi) The total current-year gallon-RINs retired.
(xii) The total prior-years gallon-RINs retired.
(xiii) The total current-year gallon-RINs expired (fourth quarter only).
(xiv) The total prior-years gallon-RINs expired (fourth quarter only).
(xv) Number of current-year gallon-RINs owned at the end of the quarter.
(xvi) Number of prior-years gallon-RINs owned at the end of the quarter.
(xvii) For parties reporting gallon-RIN activity under this paragraph for RINs assigned to a volume of renewable fuel, the volume of renewable fuel (in gallons) owned at the end of the quarter.
(xviii) Any additional information that the Administrator may require.
(3) All reports required under this paragraph (c) must be signed and certified as meeting all the applicable requirements of this subpart by the RIN owner or a responsible corporate officer of the RIN owner.


(d) Quarterly reports shall be submitted to EPA by: May 31st for the first calendar quarter of January through March; August 31st for the second calendar quarter of April through June; November 30th for the third calendar quarter of July through September; and February 28th for the fourth calendar quarter of October through December. For 2007, quarterly reports shall commence on November 30, 2007.


(e) Reports required under this section shall be submitted on forms and following procedures as prescribed by EPA.

 

 

Who is liable for violations under the RFS program?

 


(a) Persons liable for violations of prohibited acts.
(1) Any person who violates a prohibition under §80.1160(a) through (d) is liable for the violation of that prohibition.
(2) Any person who causes another person to violate a prohibition under §80.1160(a) through (d) is liable for a violation of §80.1160(e).


(b) Persons liable for failure to meet other provisions of this subpart
.
(1) Any person who fails to meet a requirement of any provision of this subpart is liable for a violation of that provision.
(2) Any person who causes another person to fail to meet a requirement of any provision of this subpart is liable for causing a violation of that provision.


(c) Parent corporation liability. Any parent corporation is liable for any violation of this subpart that is committed by any of its subsidiaries.


(d) Joint venture liability. Each partner to a joint venture is jointly and severally liable for any violation

 

 

What penalties apply under the RFS program?


(a) Any person who is liable for a violation under §80.1161 is subject a to civil penalty of up to $32,500, as specified in sections 205 and 211(d) of the Clean Air Act, for every day of each such violation and the amount of economic benefit or savings resulting from each violation.


(b) Any person liable under §80.1161(a) for a violation of §80.1160(c) for failure to meet a renewable volume obligation, or §80.1160(e) for causing another party to fail to meet a renewable volume obligation, during any averaging period, is subject to a separate day of violation for each day in the averaging period.


(c) Any person liable under §80.1161(b) for failure to meet, or causing a failure to meet, a requirement of any provision of this subpart is liable for a separate day of violation for each day such a requirement remains unfulfilled.

 

 

 

 

 

Ethanol RINS
 
 
 


Ethanol

 

RINS - EPA (PDF)

EPA - Final RIN Regulations (PDF)