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 ...
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should also have the right to separate the RIN from the batch if he actually blends the<br />
ethanol into gasoline. This would only apply to batches where the RIN had not already<br />
been separated by an obligated party. Since blenders would in general not be obligated<br />
parties under our proposed program, blenders who separate RINs from batches would<br />
have no need to hold onto those RINs <strong>and</strong> thus could transfer them to an obligated party<br />
for compliance purposes, or to any other party.<br />
There may be occasions in which a downstream customer actually owns the batch<br />
<strong>of</strong> ethanol when it is blended into gasoline. In such cases the blender will have custody<br />
but not ownership <strong>of</strong> the batch. We propose that the RIN can be separated from the batch<br />
<strong>of</strong> ethanol when the batch is blended into gasoline, but the RIN could only be separated<br />
by the party that owns that batch <strong>of</strong> renewable fuel at the time <strong>of</strong> blending.<br />
Once a RIN is separated from a batch <strong>of</strong> renewable fuel, the PTDs associated with<br />
that batch could no longer list the RIN. Parties who subsequently take ownership <strong>of</strong> the<br />
batch may not know if the RIN had been separated, or if a RIN had never been assigned<br />
to the batch in the first place, contrary to regulatory requirements. To avoid concerns<br />
about whether RINs assigned to batches have not been appropriately transferred with the<br />
batch, we request comment on whether PTDs should include some notation indicating<br />
that the assigned RIN has been removed.<br />
As described in Section III.B, many different types <strong>of</strong> renewable fuel can be used<br />
to meet the RFS volume obligations placed upon refineries <strong>and</strong> importers. Currently,<br />
ethanol is the most prominent renewable fuel, <strong>and</strong> is most commonly used as a low level<br />
blend in gasoline at concentrations <strong>of</strong> 10 volume percent or less. However, some<br />
renewable fuels can be used in neat form (i.e. not blended with conventional gasoline or<br />
diesel). The two RIN separation situations described above would capture any renewable<br />
fuel for which ownership is assumed by an obligated party or a party that blends the<br />
renewable fuel into gasoline or diesel. However, renewable fuels which are used in their<br />
neat (unblended) form as motor vehicle fuel may not be captured. This would include<br />
such renewable fuels as neat biodiesel (B100), methanol for use in a dedicated methanol<br />
vehicle, biogas for use in a CNG vehicle, or renewable diesel used in its neat form.<br />
As for ethanol <strong>and</strong> biodiesel, neat renewable fuels would be assigned a RIN by<br />
the producer. However, in cases where the neat renewable fuel is never owned by an<br />
obligated party or blended into gasoline or diesel before being used as a motor vehicle<br />
fuel, no party would have the right to separate the RIN from the batch. The RIN would<br />
therefore never become available to an obligated party for RFS compliance purposes.<br />
Although the current use <strong>of</strong> these neat renewable fuels is minor in comparison to the<br />
volumes <strong>of</strong> ethanol <strong>and</strong> lower blend levels <strong>of</strong> biodiesel, we nevertheless believe that they<br />
should be allowed to help meet the volume requirements <strong>of</strong> the RFS program.<br />
To address this issue, we propose to more broadly define the right to separate a<br />
RIN from a batch. In addition to obligated parties <strong>and</strong> blenders, we believe that any party<br />
holding a batch <strong>of</strong> renewable fuel for which the RIN has not been separated could<br />
separate the RIN from the batch if the party designates it for use only as a motor vehicle<br />
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