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

another, in electronic or paper form, when ownership of the batch is transferred. In many
cases a bill-of-lading could serve this purpose. The RIN must be displayed prominently
on the document when the batch leaves the originating facility, so that parties taking
ownership of the batch could make a record of this fact with specific reference to the
RIN. The RIN must be included on a PTD whenever ownership or custody of the batch
is transferred, until such time as the RIN may be separated from the batch as described in
Section III.E.2. As in other fuels programs, we believe the PTD requirement can be met
by including the required information generated and transferred in the normal course of
business.
RINs would be transferable in the context of the RFS program, and except as
discussed above, must be transferred along with ownership or custody of the batch. The
approach that a producer or importer takes to the transfer or sale of RINs and batches
would be at their discretion, under the condition that the two be transferred or sold
simultaneously and to the same party.
b. Responsibilities Of Parties That Buy, Sell, Or Handle Renewable Fuels
Batches of renewable fuel can be transferred between many different types of
parties as they make their way from the production or import facilities where they
originated to the places where they are blended into conventional gasoline or diesel.
Some of these parties take custody but not ownership of these batches, storing and
transmitting them on behalf of those who retain ownership. Other parties take ownership
but not custody, such as a refiner who purchases ethanol and has it delivered directly to a
blending facility. Thus prior to blending, each batch of renewable fuel can be owned or
held by any number of parties including marketers, distributors, terminal operators, and
refiners. Under our proposed program, when any party takes ownership of a batch of
renewable fuel prior to ownership of the batch of fuel by an obligated party or blender,
the RINs associated with that batch must be transferred as well. The RINs would be
included on PTDs that the party procures when taking ownership of a batch.
We propose that in general all parties that assume ownership of any batch of
renewable fuel be required to transfer all RINs assigned to that batch to another party to
whom ownership of the batch is being transferred. Batch splits and batch mergers
represent special cases of RIN transfers, and are described in more detail below. As
described in Section III.E.2, the only exception to the requirement that RINs be
transferred with batches would be parties who are obligated to meet the renewable fuel
standard, and parties who convert the renewable fuel into motor vehicle fuel. Since our
proposed program is designed to allow RIN transfer and documentation to occur as part
of normal business practices in the context of renewable fuel distribution, the incremental
costs of transferring RINs with batches should be minimal. Marketers and distributors
would simply be adding the batch-RIN to transfer documents such as bills-of-lading, and
recording the batch-RINs in their records of batch purchases and sales.
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