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

particular importance for 2013 and beyond when the Act specifies a national volume
requirement for cellulosic biomass ethanol. The RIN can also identify the Equivalence Value
of the renewable fuel which will often only be known at the point of its production. Finally,
the RIN can identify the year in which the batch was produced, a critical element of
determining the applicable time period within which RINs are valid for compliance purposes.
Production volumes of renewable fuels intended for blending into gasoline are an
accurate surrogate for volumes actually blended into gasoline. In addition, production
volumes of renewable fuels capture those renewable fuels used as motor vehicle fuel in
their neat (unblended) form. Thus we believe that this approach would allow us to
account for all renewable fuels consumed in the U.S. because renewable fuels always end
up being used as fuel in the U.S. or exported.
There are also changes that can occur at various times throughout the year in the
volumes of renewable fuel that are in storage. These stock changes involve the
temporary storage of renewable fuel during times of excess. However, these stock
changes always have a net change of zero over the long term since there is no economic
benefit to stockpiling renewable fuels.
Exports of renewable fuel represent the only distribution pathway that could
impair the use of production as a surrogate for renewable fuel blending into gasoline or
other use as a motor vehicle fuel. However, we believe that our proposed approach can
account for exports through an explicit requirement placed upon exporters (discussed in
Section III.D.4 below). As a result, we are confident that our proposed approach satisfies
the statutory obligation that our regulations impose obligations on refiners and importers
that will ensure that gasoline sold or introduced into commerce in the U.S. each year will
contain the volumes of renewable fuel specified in the Act. By tracking the amount of
renewable fuel produced or imported, and subtracting the amount exported, we will have
an accurate accounting of the renewable fuel actually consumed as motor vehicle fuel in
the U.S. Exports of renewable fuel are discussed in more detail in Section III.D.4.
a. RINs Serve The Purpose Of A Credit Trading Program
According to the Act, we must promulgate regulations that include provisions for a
credit trading program. A credit trading program would allow a refiner that overcomplied
with its annual RVO to generate credits representing the excess renewable fuel. The Act
stipulates that those credits could then be used within the ensuing 12 month period, or
transferred to another refiner that had not blended sufficient renewable fuel into its gasoline
to satisfy its RVO. In this way the credit trading program would permit current blending
practices to continue wherein some refiners purchase a significant amount of renewable fuel
for blending into their gasoline while others do little or none, thus providing a means for all
refiners to comply with the standard.
Our proposed RIN-based program would fulfill all the functions of a credit trading
program, and thus would meet the Act's requirements. If at the end of a compliance period, a
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