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 ...
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
particular importance for 2013 <strong>and</strong> beyond when the Act specifies a national volume<br />
requirement for cellulosic biomass ethanol. The RIN can also identify the Equivalence Value<br />
<strong>of</strong> the renewable fuel which will <strong>of</strong>ten only be known at the point <strong>of</strong> its production. Finally,<br />
the RIN can identify the year in which the batch was produced, a critical element <strong>of</strong><br />
determining the applicable time period within which RINs are valid for compliance purposes.<br />
Production volumes <strong>of</strong> renewable fuels intended for blending into gasoline are an<br />
accurate surrogate for volumes actually blended into gasoline. In addition, production<br />
volumes <strong>of</strong> renewable fuels capture those renewable fuels used as motor vehicle fuel in<br />
their neat (unblended) form. Thus we believe that this approach would allow us to<br />
account for all renewable fuels consumed in the U.S. because renewable fuels always end<br />
up being used as fuel in the U.S. or exported.<br />
There are also changes that can occur at various times throughout the year in the<br />
volumes <strong>of</strong> renewable fuel that are in storage. These stock changes involve the<br />
temporary storage <strong>of</strong> renewable fuel during times <strong>of</strong> excess. However, these stock<br />
changes always have a net change <strong>of</strong> zero over the long term since there is no economic<br />
benefit to stockpiling renewable fuels.<br />
Exports <strong>of</strong> renewable fuel represent the only distribution pathway that could<br />
impair the use <strong>of</strong> production as a surrogate for renewable fuel blending into gasoline or<br />
other use as a motor vehicle fuel. However, we believe that our proposed approach can<br />
account for exports through an explicit requirement placed upon exporters (discussed in<br />
Section III.D.4 below). As a result, we are confident that our proposed approach satisfies<br />
the statutory obligation that our regulations impose obligations on refiners <strong>and</strong> importers<br />
that will ensure that gasoline sold or introduced into commerce in the U.S. each year will<br />
contain the volumes <strong>of</strong> renewable fuel specified in the Act. By tracking the amount <strong>of</strong><br />
renewable fuel produced or imported, <strong>and</strong> subtracting the amount exported, we will have<br />
an accurate accounting <strong>of</strong> the renewable fuel actually consumed as motor vehicle fuel in<br />
the U.S. Exports <strong>of</strong> renewable fuel are discussed in more detail in Section III.D.4.<br />
a. RINs Serve The Purpose Of A Credit Trading Program<br />
According to the Act, we must promulgate regulations that include provisions for a<br />
credit trading program. A credit trading program would allow a refiner that overcomplied<br />
with its annual RVO to generate credits representing the excess renewable fuel. The Act<br />
stipulates that those credits could then be used within the ensuing 12 month period, or<br />
transferred to another refiner that had not blended sufficient renewable fuel into its gasoline<br />
to satisfy its RVO. In this way the credit trading program would permit current blending<br />
practices to continue wherein some refiners purchase a significant amount <strong>of</strong> renewable fuel<br />
for blending into their gasoline while others do little or none, thus providing a means for all<br />
refiners to comply with the st<strong>and</strong>ard.<br />
Our proposed RIN-based program would fulfill all the functions <strong>of</strong> a credit trading<br />
program, <strong>and</strong> thus would meet the Act's requirements. If at the end <strong>of</strong> a compliance period, a<br />
- 63 -