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

1. Why Use Renewable Identification Numbers?
Once renewable fuels are produced or imported, there is very high confidence they
will in fact be blended into gasoline or otherwise used as motor vehicle fuels, except for
exports. Renewable fuels are not used for food, chemicals, or as feedstocks to other
production processes. In fact the denaturant that must be added to ethanol is designed
specifically to ensure that the ethanol can be used only as motor vehicle fuel. In discussions
with stakeholders, it has become clear that other renewable fuels, including biodiesel and
renewable fuels used in their neat (unblended) form, likewise are not used for anything other
than fuel. Therefore if a refiner ensures that a certain volume of renewable fuel has been
produced, in effect they have also ensured that this volume will be blended into gasoline or
otherwise used as a motor vehicle fuel. It is therefore appropriate for EPA to establish the
obligation for refiners and importers as an obligation to ensure that a certain volume of
renewable fuel has been produced. This will ensure that the total required volume of
renewable fuels will be used in the U.S., and as discussed below has many benefits as far as
streamlining the program and minimizing disruptions to the current marketplace for
production, distribution, and use of renewable fuels.
Implementing a program that is based on ensuring production of a certain volume of
renewable fuels requires a system of volume accounting and tracking of renewable fuels. We
propose that this system be based on the assignment of unique numbers to each batch of
renewable fuel. These numbers would be called Renewable Identification Numbers or RINs,
and would be assigned to each batch by the renewable fuel producer or importer.
The use of RINs would allow the Agency to measure and track renewable fuel
volumes starting at the point of their production rather than at the point when they are
blended into conventional fuels. Although an alternative approach would be to measure
renewable fuel volumes as they are blended into conventional gasoline or diesel,
measuring renewable fuel volumes at the point of production provides more accurate
measurements that can be easily verified as described in Section III.D.1.b below. For
instance, ethanol producers are already required to report their production volumes to
EIA through Monthly Oxygenate Reports. This data would provide an independent
source for verifying volumes. The total number of batches and parties involved is also
minimized in this approach. The total number of batches is smallest at the point of
production, since batches are commonly split into smaller ones as they proceed through
the distribution system to the place where they are blended into conventional fuel. The
number of renewable fuel producers is also far smaller than the number of blenders.
Currently there are approximately 100 ethanol plants and 40 biodiesel plants in the U.S.,
compared with approximately 1200 blenders 27 .
The assignment of RINs to batches of renewable fuel at the point of their production
also allows those batches to be identified according to various categories important for
compliance purposes. For instance, the RIN will contain a component that specifies whether
a batch of ethanol was made from cellulosic feedstocks. This RIN component will be of
27
Those blenders who add ethanol to RBOB are already regulated under our reformulated gasoline
regulations.
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