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

Previous-year RINs: RINs that came into existence in the calendar year
preceding the year for which the report is demonstrating compliance.
The report would also indicate which RINs were used for compliance with the RVO
including any potential deficit, which current-year RINs were not used for compliance and
would therefore be valid for compliance the next year, and which previous-year RINs were
not used for compliance and therefore expired. The report would also include a
demonstration that the 20 percent cap to address RIN rollover had been met, as described in
Section III.D.3.c.
In order to verify compliance for each obligated party, the primary Agency activity
would involve the validation of RINs. There are four basic elements of RIN validation:
1) RINs used by an obligated party to comply with its RVO would be
checked to ensure that they are within their two-year valid life. The RIN
itself will contain the year of generation, so this check involves only an
examination of the listed RINs.
2) All RINs owned by an obligated party would be cross-checked with
annual reports from renewable fuel producers to verify that each RIN had
in fact been generated.
3) All RINs used by an obligated party for compliance purposes would be
cross-checked with annual reports from other obligated parties to ensure
that no two parties used the same RIN to comply.
4) Previous-year RINs used for compliance purposes would be checked to
ensure that they do not exceed 20 percent of the obligated party's RVO.
In cases where a RIN was highlighted under suspicion of being invalid, the Agency
would then need to take additional steps to resolve the issue. In general this would involve a
review of RIN transfer records submitted to the Agency by all parties in the distribution
system that held the RINs. RIN transfers would be recorded through EPA's Central Data
Exchange as described in Section IV. These RIN transfer records would permit the Agency
to identify all transaction(s) involving the RINs in question. Liable parties could then be
contacted and appropriate steps taken to formally invalidate a RIN improperly claimed by a
particular party. Additional details of the liabilities and prohibitions attributed to parties in
the distribution system are discussed in Section V.
E. How Are RINs Distributed And Traded?
Under our proposed program structure, a Renewable Identification Number (RIN)
would be generated for every gallon of renewable fuel produced or imported into the
U.S., and would be acquired by obligated parties for use in demonstrating compliance
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