Regulation of Fuels and Fuel Additives: Renewable Fuel Standard ...
Regulation of Fuels and Fuel Additives: Renewable Fuel Standard ...
Regulation of Fuels and Fuel Additives: Renewable Fuel Standard ...
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certain volume <strong>of</strong> renewable fuel. Exporters <strong>of</strong> renewable fuel would also be required to<br />
retire RINs in sufficient quantities to cover the volume <strong>of</strong> renewable fuel exported. RINs<br />
claimed for compliance purposes would thus represent renewable fuel actually consumed<br />
as motor vehicle fuel in the U.S.<br />
RINs would be valid for compliance purposes for the calendar year in which they<br />
were generated, or the following calendar year. This approach to RIN life would be<br />
consistent with the Act's prescription that credits be valid for compliance purposes for 12<br />
months as <strong>of</strong> the date <strong>of</strong> generation. An obligated party could either use RINs to<br />
demonstrate compliance, or could transfer RINs to any other party. If an obligated party<br />
was not able to accumulate sufficient RINs for compliance in a given year, it could carry<br />
a deficit over to the next year so long as the full deficit <strong>and</strong> obligation were covered in the<br />
next year.<br />
In order to ensure that previous year RINs are not used preferentially for<br />
compliance purposes in a manner that would effectively circumvent the limitation that<br />
RINs be valid for only 12 months after the year generated, we are proposing to place a<br />
cap on the use <strong>of</strong> RINs generated the previous year when demonstrating compliance with<br />
the renewable volume obligation for the current year. The cap would mean that no more<br />
than 20% <strong>of</strong> the current year obligation could be satisfied using RINs from the previous<br />
year. In this manner there is no ability for excess renewable fuel use in successive years<br />
to cause an accumulation <strong>of</strong> RINs from excess compliance in prior years to significantly<br />
depress renewable fuel dem<strong>and</strong> in any future year. In keeping with the Act, excess RINs<br />
not used would expire.<br />
Section III.D provides more details on how obligated parties would use RINs for<br />
compliance purposes.<br />
6. How Would The Trading Program Work?<br />
<strong>Renewable</strong> fuel producers <strong>and</strong> importers would be required to generate RINs<br />
when they produce or import a batch <strong>of</strong> renewable fuel. They would then be required to<br />
transfer those RINs along with the renewable fuel batches that they represent whenever<br />
they transfer the batch to another person. Likewise any other party that takes ownership<br />
or custody <strong>of</strong> the batch would be required to transfer the RIN with the batch. The RIN<br />
could be separated from the batch only by obligated parties (at the point when they take<br />
ownership <strong>of</strong> the batch) or a party that converts the renewable fuel into motor vehicle fuel<br />
(such as through blending with conventional gasoline or diesel).<br />
Once a RIN is separated from the batch <strong>of</strong> renewable fuel that it represents, it can<br />
be used for compliance purposes, banked, or traded to another party. Separated RINs<br />
could be transferred to any party any number <strong>of</strong> times. Recordkeeping <strong>and</strong> reporting<br />
requirements would apply to any party that holds RINs, whether through the ownership<br />
or custody <strong>of</strong> a batch <strong>of</strong> renewable fuel or through the transfer <strong>of</strong> separated RINs.<br />
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