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

III.B provides more details on the renewable fuels that would be allowed to be used for
compliance with the standard under our proposal.
4. Equivalence Values Of Different Renewable Fuels
One question that EPA faced in developing the program was what value to place
on different renewable fuels and on what basis should that value be determined. The Act
specifies that each gallon of cellulosic ethanol be treated as if it were 2.5 gallons of
renewable fuel, but does not specify the values for other renewable fuels. As discussed in
Section III.B.4., we considered and are seeking comment on a range of options including
straight volume, energy content, and life cycle energy or greenhouse gas emissions.
However, we are proposing that the “Equivalence Values” for the different renewable
fuels be based on their energy content in comparison to the energy content of ethanol, and
adjusted as necessary for their renewable content. The result is an Equivalence Value for
corn ethanol of 1.0, for biobutanol of 1.3, for biodiesel (mono alkyl ester) of 1.5, for nonester
renewable diesel of 1.7, and for cellulosic ethanol of 2.5. The proposed
methodology can be used to determine the appropriate Equivalence Value for any other
potential renewable fuel as well.
5. How Will Compliance Be Determined?
Under our proposed program, every gallon of renewable fuel produced or
imported into the U.S. would be assigned a unique renewable identification number
(RIN). A block of RINs could be assigned to any batch of renewable fuel that is valid for
compliance purposes under the RFS program. These RINs would be placed on product
transfer documents (PTD) as a batch of renewable fuel is transferred through the
distribution system. Once the renewable fuel is obtained by an obligated party or actually
blended into a motor vehicle fuel, the RIN could be separated from the batch of
renewable fuel to which it had been assigned, and then either used for compliance
purposes or traded. For excess RINs resulting from the production of renewable fuels
with Equivalence Values greater than 1.0, the producer of the renewable fuel could retain
them for marketing separately (they need not be assigned to a batch of renewable fuel and
placed on PTDs).
RINs would represent proof of production which is then taken as proof of
consumption as well, since all renewable fuel produced or imported will be either
consumed as fuel or exported. For instance, ethanol produced for use as motor vehicle
fuel is denatured specifically so that it can only be used as fuel. Similarly, biodiesel is
produced only for use as fuel and has no other potential uses. An obligated party would
demonstrate compliance with the renewable fuel standard by accumulating sufficient
RINs to cover their individual renewable fuel volume obligation. It would not matter
whether the obligated party used the renewable fuel themselves. A party's obligation
would be to ensure that a certain amount of renewable fuel was used, whether by
themselves or by someone else, and the RIN would be evidence that this occurred for a
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