Regulation of Fuels and Fuel Additives: Renewable Fuel Standard ...

The refiner or importer would be liable for violating the standard if the remaining number
of valid RINs was insufficient to meet its RVO, and the obligated party might be subject
to monetary penalties if it used invalid RINs in its compliance demonstration. In
determining what penalty is appropriate, if any, we would consider a number of factors,
including whether the obligated party did in fact procure sufficient valid RINs to cover
the deficit created by the invalid RINs, and whether the purchaser was indeed a good
faith purchaser based on an investigation of the RIN transfer. A penalty might include
both the economic benefit of using invalid RINs and/or a gravity component.
Although an obligated party would be liable under our proposed program for a
violation if it used invalid RINs for compliance purposes, we would normally look first to
the generator or seller of the invalid RINs both for payment of penalty and to procure
sufficient valid RINs to offset the invalid RINs. However, if, for example, that party was
out of business, then attention would turn to the obligated party who would have to obtain
sufficient valid RINs to offset the invalid RINs.
Because there are no standards under the RFS rule that may be measured
downstream, we believe that a presumptive liability scheme, i.e., a scheme in which
parties upstream from the facility where the violation is found are presumed liable for the
violation, would not be applicable under the RFS program. We request comment on
whether a presumptive liability scheme may have application under the RFS rule. We
also request comment on the need for additional prohibition and liability provisions
specific to the proposed RFS program.
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