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

. Generating Extra-Value RINs
In general, there is a one-to-one correspondence between gallon-RINs and physical
gallons of renewable fuel in a batch. For instance, a 10,000 gallon batch of renewable fuel
would be assigned 10,000 gallon-RINs, and the batch-RIN would contain volume block start
and volume block end values summarizing the 10,000 gallon-RINs. However, under certain
circumstances RINs may be generated in addition to those that represent the volume of
renewable fuel actually produced. This would occur in cases where the Equivalence Value
of the renewable fuel in question is greater than 1.0. Renewable fuel Equivalence Values are
discussed in Section III.B.4.
If a renewable fuel has an Equivalence Value greater than 1.0, the incremental value
above 1.0 can be used to generate "extra-value" RINs. For instance, the Equivalence Value
for biodiesel shown in Table III.B.4-1 is 1.5. If a biodiesel producer made a 1000 gallon
batch of biodiesel, 1000 standard-value gallon-RINs would be assigned to the batch and an
additional 500 extra-value gallon-RINs could also be generated.
All the RINs generated to represent a batch of renewable fuel would contain the same
RR code representing the Equivalence Value of the renewable fuel. However, extra-value
RINs would be treated differently from standard-value RINs in two ways. First, the extravalue
RINs would include a K code that identifies them as extra-value RINs, distinguishing
them from standard-value RINs that represent actual gallons of renewable fuel. Second,
extra-value RINs would not be required to be transferred along with the batch of renewable
fuel as it moves through the distribution system 30 . Rather, an extra-value RINs could be
transferred as an independent commodity by the producer. This approach would provide an
incentive for producers to make renewable fuels that have a comparatively greater value in
terms of meeting the volume requirements of the RFS program. Also, by not requiring extravalue
RINs to be assigned to the batches of renewable fuel that they represent, batches of
renewable fuel can continue to have a one-to-one correspondence between gallon-RINs
assigned to the batch and the number of physical gallons in that batch. This approach can
greatly simplify the transfer of RINs with batches particularly when batch splits occur.
c. Cases In Which RINs Are Not Generated
Although in general every (temperature-standardized) gallon of renewable fuel
produced or imported would be assigned a gallon-RIN, there are several cases in which a
RIN may not be assigned. For instance, if a renewable fuel producer also operated as an
exporter, any renewable fuel that it produced and exported would not need to be assigned a
RIN. Since the gasoline that is blended with renewable fuels under the RFS program must be
"sold or introduced into commerce" within the U.S., renewable fuels that are exported cannot
be claimed by an obligated party for compliance purposes, and therefore would not need to
be assigned a RIN. Exports of renewable fuel are discussed further in Section III.D.4.
30 As described in Section III.E below, we are proposing that standard-value RINs would be assigned to
the batch of renewable fuel they represent and would be required to be transferred with the batch.
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